Canada Post strike enters fourth week as small businesses face skyrocketing costs, courier backlogs

Small businesses are facing skyrocketing delivery costs as the Canada Post strike enters its fourth week, causing backlogs at competing couriers.

On Friday, Purolator paused shipments from some third-party couriers because of a significant increase in the volume of deliveries in the wake of the postal workers’ strike. Third-party couriers are middlemen used by consumers and small businesses to reach bigger delivery companies. In a statement to The Globe and Mail, Purolator said the pause was temporary and that the company will “make all attempts to remove the service suspension as soon as possible.”

More than 55,000 Canada Post workers have been on a nationwide strike since Nov. 15, coinciding with the holiday season shopping period. Talks between the Canadian Union of Postal Workers and Canada Post are still going slowly, more than a week after a mediator appointed by the federal government suspended negotiations, saying the two sides remained too far apart on a myriad of issues.

But as the strike continues, some small business owners who relied on Canada Post and attempted to switch couriers have found they are being charged noticeably higher rates.

Stephanie Howarth, the president of Montreal-based Kanel Spices, a specialty spice store, said UPS charged her double what she usually pays for Canada Post delivery. She was also told by UPS that her shipments would not be picked up unless she was willing to commit to a three-year contract.

“This has eased since Black Friday weekend, and they have resumed picking up, but we are being charged their highest rates because we’re not willing to commit to switching to UPS,” Ms. Howarth said.

Kanel Spices offers free shipping on orders over $60, and most of its customers meet this threshold, resulting in the business fully absorbing shipping costs. “At the beginning of the strike, when UPS did not pick up orders, we loaded our cars with hundreds of orders and drove them to UPS stores, doing our best to charm their employees into taking our business,” Ms. Howarth said.

Joshua Seraj, the owner of Tools420, a vaporizer store in Burlington, Ont., had a similar experience trying to use UPS as an alternative to Canada Post. He said its shipping rates were more than double Canada Post’s.

To mitigate those high rates, he signed a volume-based contract with UPS that was 15 per cent cheaper than its usual rate. The contract required a one-year commitment, with a cancellation penalty of $500.

Still, even with the contract, Mr. Seraj’s shipping costs were substantially higher: A small parcel delivery of one vape pen (with a product price of $95) cost him $30.49, compared with $13.96 with Canada Post.

FedEx, another alternative courier, quoted Mr. Seraj a price of $25.12 for that same delivery, but he said that in the early days of the strike, FedEx’s shipping charges were the highest of all the couriers, which is why he did not opt to sign a contract with them.

UPS did not respond to questions about its shipping prices after the strike began. In a statement, a FedEx spokesperson told The Globe the company had not implemented any new charges or fees since Nov. 15. The spokesperson added that FedEx had developed a contingency plan earlier this year in the event of a Canada Post strike and had the capacity to handle a surge in parcel volume.

A Canada Post strike in 2018 lasted four weeks before the federal government imposed back-to-work legislation. Federal Labour Minister Steve MacKinnon has repeatedly said he will not intervene in the strike and expects it to be settled at the bargaining table.

On Wednesday, the union responded to a new proposal from Canada Post and said it was ready to return to the mediation process. “We know people want a settlement and fatigue is setting in,” Jan Simpson, the national president of CUPW, said in a statement.

But both sides have been tight-lipped about outstanding issues that remain sticking points. The union is vehemently opposed to Canada Post’s push to hire more part-time employees for weekend parcel delivery. The two sides are also far apart on wages: Canada Post has offered an 11.5-per-cent wage increase over four years, while CUPW is asking for 24 per cent, compounded.

This week, CUPW hinted the two sides had resolved an issue related to offering defined-benefit pensions to new part-time workers. Canada Post had initially suggested hiring part-time workers with defined-contribution pensions to staff weekend delivery, a proposal the union opposed.

Larry Savage, a professor of labour studies at Brock University, noted that as strikes wear on, they often become more difficult to sustain. “There’s no doubt increased pressure on the union to reach a settlement in short order,” he said.

Prof. Savage also said that as the holidays approach, the federal government might decide to intervene to end the strike, as they have done in multiple labour disputes this year. “The Minister of Labour may decide he has no choice but to get his hands dirty. Politically, the government is stuck between a rock and a hard place.”

Editor’s note: A previous version of this article incorrectly identified Stephanie Howarth as owner of Kanel Spices. She is president of Kanel Spices. This version has been updated.