Canada Post losses top $300M as strike enters second week — and rivals step in

Canada Post has reported a substantial financial loss in the third quarter of 2024, posting a $315 million loss before tax, a larger decline compared to the $290 million loss during the same period last year. This marks a continuation of a troubling trend for the Crown corporation, which has now experienced significant losses for the seventh consecutive year.

The primary factors contributing to the ongoing losses include a shrinking share of the parcels market and declining volumes of letter mail. Canada Post noted a 10% drop in the number of parcels handled, amounting to six million fewer packages year-over-year. While revenue from letter mail increased slightly due to a rise in stamp prices, the overall decline in parcel volumes has been the key financial strain.

These results come as Canada Post is also grappling with the impact of a nationwide strike that began on November 15, involving over 55,000 workers. The strike, centered on issues related to wages, job security, benefits, and working conditions, has led to a weeklong shutdown of operations, further affecting the corporation’s bottom line.

With the disruption in Canada Post’s services, other shipping companies, such as Purolator (majority-owned by Canada Post), have seen a surge in business. E-commerce platforms like Chit Chats have reported record volumes as businesses seek alternative shipping options. However, this has led to significant surge pricing and delays, particularly affecting small businesses and consumers.

The ongoing strike and Canada Post’s challenges come amid a broader trend of declining letter mail volumes and heightened competition in the parcel delivery sector, where Canada Post’s market share has fallen from 62% before the pandemic to just 29% last year. This has been largely due to the rise of Amazon and other competitors capitalizing on the growing demand for fast, next-day deliveries.

Canada Post’s struggles also reflect a broader shift in consumer behavior, with fewer people sending letters, contributing to what the company has termed the "Great Mail Decline." Despite efforts to expand parcel delivery services, the postal service faces ongoing challenges in adapting to changing market dynamics and increasing competition.