Canada Post says it lost $315 million before tax in the third quarter compared with a loss before tax of $290 million a year earlier.Canada Post signage is seen during a national strike action in Ottawa, on Monday, Nov. 18, 2024. THE CANADIAN PRESS/Spencer Colby
MONTREAL – Canada Post saw hundreds of millions of dollars drain out of its coffers last quarter, due largely to its dwindling share of the parcels market – while an ongoing strike continues to batter its bottom line.
The Crown corporation said Friday it lost $315 million before tax in the third quarter, larger than its $290 million loss a year earlier.
“An increasingly crowded and highly competitive e-commerce delivery market continued to impact parcels results in the third quarter of 2024,” Canada Post said. The number of packages dropped by six million or nearly 10 per cent year-over-year.
Letter mail volumes also eroded further, though revenue nudged up due to a hike in stamp prices, it said.
The tough financial results put Canada Post on track for “another significant loss” in 2024, which would mark the seventh year in a row in the red.
They also come as Canada Post deals with a weeklong shutdown of its operations after more than 55,000 workers across the country walked off the job on Nov. 15.
The two sides have been wrangling over wages and contract work as well as job security, benefits and working conditions.
Amid the sudden halt of deliveries – government benefit cheques are among the few exceptions – business has increased at other shipping outfits.
“We have seen a double-digit increase in volumes week over week as we continue to meet the needs of Canadians at this busy time,” said Purolator – majority-owned by Canada Post – in an email Tuesday.
FedEx has implemented a “contingency plan” to manage higher volumes, said spokesman James Anderson earlier this week.
Alternative shipping platforms such as Chit Chats have also reported higher volumes because of the job action.
Profit margins for shippers may be widening too, at least temporarily.
Montreal-based pantyhose maker Sheertex said this week that alternative carriers, overloaded with orders, have implemented “significant surge pricing” on shipments.
Small businesses especially have felt the squeeze of the strike, as store owners and entrepreneurs frantically search for workarounds to get orders to customers quickly and affordably.
But even big corporations face hurdles.
“Customers shipping to PO boxes and more rural areas may see delays,” said Walmart Canada spokeswoman Stephanie Fusco in an email. However, she said most consumers making online purchases directly from the company would see “minimal impact.”
The last postal work stoppage took place starting in late October 2018, when employees carried out rotating strikes lasting 31 days.
That strike as well as one in 2011 ended when the federal government passed legislation sending employees back to work.
Canada Post has reported more than $3 billion in losses since 2018, as Canadians sent fewer letters while competitors gobbled up even more of the parcel market.
Households received seven letters a week on average in 2006, but only two per week last year, according to Canada Post’s latest annual report, which dubbed the trend “the Great Mail Decline.”
Both the union and the Crown corporation have pushed expanded parcel deliveries as a way to boost revenue, but they differ on how to go about it. The union says full-time employees should deliver package shipments on weekends at overtime wage rates, while Canada Post hopes to hire contract workers.
According to last year’s annual report, the postal service’s share of the parcel market eroded from 62 per cent before the COVID-19 pandemic to 29 per cent last year, as Amazon and other competitors seized on skyrocketing demand for next-day doorstep deliveries.
This report by The Canadian Press was first published Nov. 22, 2024.
– With files from Tara Deschamps in Toronto
