Purolator, UPS pause shipments from couriers amid delivery backlog

By: Christopher Reynolds, The Canadian Press Posted: 3:00 AM CST Friday, Dec. 6, 2024 Last Modified: 2:17 PM CST Friday, Dec. 6, 2024

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Purolator and UPS have paused shipments from some courier companies as they try to work through a deluge of deliveries brought on by the Canada Post strike, creating even bigger backlogs at the height of the holiday shipping season.

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Hey there, time traveller!
This article was published 06/12/2024 (361 days ago), so information in it may no longer be current.

“The Purolator network is currently experiencing service disruptions due to severe weather and a significant increase in volume,” the company said in an email.

It froze service for some partners this week, citing the need to ensure employee safety and “prioritize critical shipments.”

Purolator and UPS have paused shipments from some courier companies as they try to work through a deluge of deliveries brought on by the Canada Post strike. The main Purolator sort plant is seen in Calgary, Alta., Saturday, May 9, 2020. THE CANADIAN PRESS/Jeff McIntosh

Alternative couriers such as eShipper and ShipTime act as middlemen between smaller e-commerce companies and large carriers including Purolator and UPS. The couriers bundle packages sent by small businesses to secure lower rates than the mom-and-pop shops could get through individual orders with the big players.

Now, eShipper is among the outfits temporarily barred from sending packages through UPS and the Canada Post-owned Purolator.

A notice sent from eShipper to clients and obtained by The Canadian Press says “no shipments will be processed or moved by these carriers” for 48 hours, starting Wednesday.

UPS did not respond to requests for comment.

The temporary bans speak to a shipping network strained to the breaking point, with implications for customers and shippers — including eShipper’s 22,000-plus clients.

One of them, Montreal-based Félix & Norton, which ships gourmet cookies across the country, says the cargo halt and broader postal strike fallout could cost the company its “whole holiday season.”

“This is absolutely insane and infuriating for everybody that doesn’t even use Canada Post,” chief operating officer Simon Paquin said, stressing the ripple effects of the work stoppage.

Most of Félix & Norton’s business relies on shipped cookies rather than baked goods bought in-store, putting it among the retailers frantically searching for workarounds.

Big carriers such as Purolator, UPS, FedEx, Canpar and DHL are “not equipped” to pick up all the slack left by the Canada Post shutdown, said Paquin.

“They’re overloaded, I’m hearing, until after the holidays … we can’t even process orders anymore because there’s no shipping available.”

The bakery is scrambling to arrange alternate deliveries in Montreal and Toronto by last-mile carriers, which typically deliver packages from a shipping hub to the buyer’s doorstep.

“But let’s say you’ve got to deliver something in the north of Quebec, you just can’t anymore. I will lose a lot of business for sure,” he said.

Canada Post said Thursday it was reviewing new counter-proposals submitted by the union representing more than 55,000 postal employees, who walked off the job three weeks ago.

The sticking points include wages and a push to expand into weekend delivery, with the two sides in disagreement over how to staff the expansion.

Calls for federal intervention have been mounting from the business community, but so far the government has said it’s not stepping in.

Canada Post handled 296 million parcels last year, or nearly 811,000 per day. That’s a big hole for private operators to plug, even if it represents just 29 per cent of the parcel market, according to the Crown corporation.

Alternative shippers and last-mile couriers are among the few companies poised to benefit from the gap in the market left by Canada Post’s absence — territory it may have trouble reclaiming once the labour dispute is resolved.

“We’re just trying to keep up,” said Kevin Ham, CEO of Chit Chats. The e-commerce shipping platform has acquired “record numbers” of clients over the past three weeks, he said.

And when delivery capacity shrinks, shipping prices rise — all the more so during peak holiday demand.

Montreal-based pantyhose maker Sheertex has said alternative carriers, overloaded with orders, have implemented “significant surge pricing” on shipments.

“This is where nimble startups with a van are going to try and step in wherever possible,” said Ulrich Paschen, an instructor at the Melville School of Business at Kwantlen Polytechnic University in Surrey, B.C.

“Obviously, the network that Canada Post has is not that easily replicated. But I know that in a number of areas, Canada Post will have to struggle to regain what they’ve lost.”

In the meantime, the strike may deter customers from shipping due to the backlogs and the cost, hurting small businesses further.

“We’ll charge $80 to ship a $50 gift. And they’re like, ‘That costs more than my gift,’” said Timothy Byrnes, director of Jet Worldwide, a parcel delivery firm.

Byrnes said some carriers are narrowing their profit margins in a bid to accommodate small shippers, but that the rates still can’t match the low fees charged by Canada Post.

“Even if they wanted to pay double the rate, UPS and Purolator are just saying, ‘Sorry, we’re backed up.'”

— With files from Rosa Saba in Toronto

This report by The Canadian Press was first published Dec. 6, 2024.

Key Issues

Here’s a snapshot of the issues underpinning the standoff between the Crown corporation and union.

Wage increases

The Canadian Union of Postal Workers said at the start of the strike that wage increases must be kept in line with inflation, with cost-of-living adjustment payments rolled into the basic wage rate.

The union initially called for a cumulative wage hike of 24 per cent over four years. CUPW negotiator Jim Gallant said that figure has moved since the start of negotiations, but declined to comment on the union’s latest proposal.

Canada Post says it has offered what it calls “competitive” wage increases totalling 11.5 per cent over four years and more paid leave. It notes labour costs rose by $242 million in 2023, or about 6.5 per cent, compared with 2022.

Weekend delivery

One of the main snags in negotiations has been a push to expand delivery to the weekend, but the two sides are at odds over how to staff the expansion.

Canada Post has pitched seven-day-a-week delivery as a way to boost revenue and “secure the future of the company” as it struggles to compete with other delivery companies.

The Crown corporation says it would staff weekend delivery shifts with a mix of new permanent part-time positions and some full-time, which would “create flexibility while not adding significant long-term fixed costs.”

But the union characterizes Canada Post’s proposals as “attacks on full-time work,” accusing the Crown corporation of wanting to increase the part-time mix to more than 50 per cent of the workforce. It says it is concerned some part-timers could be scheduled for as few as eight hours per week and wouldn’t be eligible for benefits until they reach 1,000 hours.

Job security and retirement

The union has highlighted a number of its demands for better job security, including a request for “improved protections against technological change.” Gallant said Canada Post is “always looking for new technology” that could threaten workers’ duties, such as loading and unloading robots and self-driving forklifts.

When it comes to retirement, CUPW says Canada Post wants new workers to accept a defined contribution pension plan, even though its defined benefit pension plan is overfunded by 140 per cent.

Canada Post says its proposals are “focused on protecting and enhancing what’s important to current employees … while protecting the defined benefit pension and their job security.”

Rural service

The union has said it wants job security rights for rural and suburban mail carriers in line with those granted to urban postal workers. It has outlined a number of issues affecting its Rural Suburban Mail Carrier bargaining unit, saying it wants an hourly rate system with appropriate time values, union involvement and “safeguards against (Canada Post’s) unilateral change.”

The union says Canada Post must maximize and maintain eight-hour routes for rural workers, grant improved rights for on-call relief employees, and uphold paid meal and rest period rights.

It says the Crown corporation must also ensure the bargaining unit’s involvement in service expansion projects. Earlier this week, Simpson called on Canada Post to commit to working with the union “to expand services at the post office including postal banking and electric vehicle charging stations.”

Safer working conditions

The union has demanded the full elimination of Canada Post’s “separate sort from delivery” system, which entails certain employees spending the entirety of their shifts sorting mail for letter carriers to go out and deliver — as opposed to carriers performing both tasks.

It says this system overburdens carriers, who as a result spend more time outdoors and potentially exposed to extreme weather events.

The union has also proposed increases to short-term disability program payments and injury on duty payments, along with more paid medical days.

-The Canadian Press