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Labor turmoil at Canada Post forces small businesses to

turn to

private carriers

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Canada Post's market share drops to 27% in 2024 from 62%

in 2019

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Co's share could drop into teens by December 2026 -

analyst

By Abhinav Parmar

July 7 (Reuters) - UPS, FedEx ( FDX ) and other private parcel

carriers are busy cornering a bigger share of the nearly $17

billion Canadian delivery market, while government-owned Canada

Post copes with labor turmoil.

Canada Post, the country's primary postal service, has been

plagued by labor disruptions since last year, including during

the peak holiday season as workers went on strike over pay.

The Canadian Union of Postal Workers (CUPW), representing

delivery personnel at Canada Post, initiated a nationwide

overtime ban in May after contract negotiations failed.

The repeated disruptions have prompted small businesses to

turn to rivals and private carriers for timely deliveries, even

if they are more expensive.

"For retailers who can't afford to roll the dice on labor

peace, their T-shirts and iPhone cases hop over to brown or

purple vans (UPS/FedEx ( FDX )) at the first whiff of trouble," said

Michael Ashley Schulman, chief investment officer at wealth

management company Running Point Capital.

Parcel giant FedEx ( FDX ) told Reuters it expects "the

circumstances at Canada Post may trigger an increase in demand

for FedEx ( FDX ) services."

The company may offer special rates, add delivery vehicles,

re-work routes, reallocate resources and open temporary sorting

centers to handle the additional demand.

UPS declined to divulge its plans to boost capacity.

Calgary-based Lisa Graham, who runs a small e-commerce based

business called YYC Beeswax, told Reuters her business relied

heavily on Canada Post's affordable small-package rates for

domestic shipments.

But after the business suffered some losses during last

year's holiday season strikes, Graham turned to UPS and FedEx ( FDX ) to

keep deliveries running, and enlisted local courier services to

supply domestic customers, who make up 70% of her sales.

"Anything that's going to take over two days, we are

spending extra to ship with them (private courier services)."

Last year's strikes cost small and medium-sized businesses

over $1 billion in lost sales, the Canadian Federation of

Independent Business said.

Michael Cox, who imports Irish sweaters, textiles, jewelry,

and other goods from the UK to his Ottawa-based shop, said he

had to halt business during last year's strikes, as Canada Post

was its sole logistics provider - causing significant losses.

The Canadian courier, express, and parcel market is valued

at $16.74 billion and could hit $21.55 billion by 2030,

according to Mordor Intelligence.

The impact of the ongoing uncertainty, including last year's

strikes, has been significant on our business, a Canada Post

spokesperson said.

"Since the union restarted their strike action in May 2025

once the collective agreements expired, we have lost almost 60%

of our business."

Canada Post's market share plunged to 26.7% in 2024 from

62% in 2019, according to the company's annual report, despite a

post-pandemic e-commerce boom in deliveries.

It lost $208 million due to last year's 32-day strike.

"If CUPW's contract slug-fest drags on, Canada Post's share

could drop into the teens by December 2026," Schulman added.