Summary:
- Canada Post workers are currently on strike, majorly impacting last mile peak season in Canada.
- The Canadian market on-time performance is 8% lower than the overall market and has dropped by 14% throughout the past month.
- Carrier diversification is 60% lower in Canada compared to the overall market, meaning Canadian shippers have more limited shipping networks and fewer options during disruptions like strikes.
- Other last mile shipping companies like UPS can cost 40% more than the Canada Post charges for the same service.
Last mile peak season
The last mile peak season, spanning from November to January, marks the highest annual volumes driven by holiday shopping, returns, and sales events like Black Friday and Cyber Monday. This surge in demand for gifts and décor can lead to bottlenecks, making it essential to monitor and prepare for shipment delays to ensure timely deliveries during this critical period.
November’s last mile peak season performance started strong, characterized by quick deliveries and a solid 84% on-time delivery rate. However, in Canada, Canada Post workers have been on strike since November 15, causing delays and setbacks during their peak season.
Strike impact on peak season
On-time performance represents the service level that the last mile market is operating by showing what percentage of shipments arrived on time, compared to their original delivery estimation. The chart below highlights weekly average delivery times for parcel shipments in Canada compared to the overall market.
While there are dips in the overall market due to increased volumes from sales such as Black Friday and Cyber Monday, Canadian shipments are performing 8% lower than the overall market for the week beginning November 25th. During the week of October 28th, the Canadian market exceeded the overall service level of the market by 2%, but has since dropped by 14%, resulting in a 73% on-time rate. This means that nearly 1 in every 3 packages is being delivered late.
Taking a closer look at the on-time performance rates within Canada, both inbound and outbound shipments have been impacted by the strike. Since the week of October 28th, inbound on-time performance has dropped by 12%, while outbound performance has fallen by 13%.
One reason the strike is affecting Canada so significantly is that Canada Post is the top parcel shipper in the country and Canada has below-average carrier diversification, as shown in the chart below.
On average, shippers use a total of around 6 carriers in their last mile networks. For shipments inbound or outbound to Canada, this average is less than 3, meaning they are working with nearly 60% fewer carriers than the overall market. Because of this lack of carrier diversity, when an event like the postal strike occurs, the Canadian market becomes highly vulnerable to disruptions. Shippers are now scrambling to find capacity and must make tough decisions between cost and delivery time. While alternatives such as UPS are available to shippers, their costs are higher than Canada Post’s rates.
Ecomcrew conducted an analysis of the costs to ship a 22lb package from Vancouver to Toronto in 2024, as shown in the table below:
| Shipper | Service | Price | Delivery Time |
| UPS | UPS Ground | $ 28.97 | 5 Business Days |
| UPS 3-Day Select | $ 73.79 | 3 Business Days | |
| UPS 2nd Day Air | $ 99.81 | 2 Business Days | |
| UPS Next Day Saver | $ 146.60 | Next Business Day be 3PM | |
| UPS Next Dat Air Early AM | $ 213.95 | Next Business Day be 8AM | |
| Canada Post | Regular Parcel | $ 21.61 | 5-9 Business Days |
| Xpresspost | $ 52.62 | 2-3 Business Days | |
| Priority | $ 104.89 | Next Business Day |
Generally, shipping via UPS domestically in Canada costs ~40% more than Canada Post rates.
Summary
Shippers are facing significant peak season challenges in Canada, where the ongoing Canada Post strike is causing delays and impacting on-time delivery performance. While the overall market is experiencing a typical surge in demand, Canadian shipments have been especially affected due to limited carrier options and the dominance of Canada Post in the parcel shipping market. Shippers now face tough decisions between cost and delivery time, as alternatives like UPS come with higher costs. To navigate these disruptions, companies must stay vigilant and adjust their strategies to ensure timely deliveries during this critical period.
