Canada Post Strike Delivers Holiday Headache for Retailers

Authored by TARA CONWAY

Tara Conway is an Advisor, Digital Pioneer, Speaker, Ecommerce, and Logistics Expert. Tara offers a retailer's perspective on logistics, shipping, and customer experience. She speaks at top conferences like eTail Canada and DX3 and mentors female founders in logistics and tech.

The holiday season, responsible for a big portion of annual revenue for many Canadian retailers, is facing a major disruption:

A nationwide Canada Post strike.

With over 50,000 workers off the job, deliveries have ground to a halt. The timing coincides with the lead-up to major shopping events like Black Friday and Cyber Monday.

It only amplifying the pressure on businesses already grappling with supply chain issues and the aftermath of recent port shutdowns in British Columbia and Quebec. This confluence of events is creating a perfect storm for retailers across Canada, forcing them to navigate logistical nightmares, manage frustrated customer expectations, and find creative solutions to salvage their holiday sales.

Background

This isn't the first time Canada Post workers negotiations have disrupted retail operations. In October 2018, Canada Post workers initiated rolling strikes, culminating in a nationwide halt of mail and package deliveries. This disruption had a particularly severe impact on the Gateway postal facility in Mississauga, one of the largest sorting facilities serving central Canada.

The strike lasted for almost a month, causing significant challenges for retailers, especially in managing customer expectations and ensuring timely package delivery.

It ultimately ended with the government implementing back-to-work legislation. However, the legislation came into effect several days after Black Friday and the Black Friday weekend, a period marked by extremely high demand for retailers.

By that time, many retailers had already resorted to using alternative carriers to ship packages that had been prepared in advance, adding to the logistical complexity and cost of the situation.

Impact of the Canada Post Strike on Retailers

The Canada Post strike, unfolding during the peak holiday shopping season, has created significant challenges for retailers across Canada.

Immediate Consequences

The most immediate fallout is the halt of all mail and parcel deliveries, leaving countless shipments “stuck in limbo.” This has led to uncertainty and frustration for both retailers and customers, with customer service teams bearing the brunt of increased inquiries about delayed orders. Retailers are taking different approaches to manage the disruption:

• Sticking to existing processes: Some businesses have opted to wait out the strike, informing customers that deliveries will resume once Canada Post operations return to normal.
• Prioritizing customer satisfaction: Others are reshipping orders at no extra cost through alternative carriers, hoping to maintain customer loyalty despite the added expense. Many retailers in this camp request that customers return the original shipment once Canada Post resumes deliveries.

Both strategies involve additional costs, whether in lost time or shipping expenses, leaving retailers to weigh short-term solutions against long-term customer retention.

Lost Revenue and Customer Trust

Beyond delayed shipments, the strike has disrupted new sales. Many shoppers are hesitant to place orders without delivery guarantees, particularly during the holiday season when timely gift-giving is crucial.

This uncertainty has driven some consumers to seek alternative retailers who can promise reliable shipping, further impacting revenue and customer trust.

Operational Challenges and Financial Strain

The strike has forced retailers to pivot quickly to other shipping carriers, a shift that comes with its own set of hurdles:

• Systems Integration: Retailers must reconfigure IT systems to work seamlessly with new carriers, ensuring order tracking and communication are unaffected.
• Logistics Overhaul: Adjusting to new carriers’ shipping processes can strain logistics teams already stretched thin by the holiday rush.
• Customer Service Overload: With alternative carriers and potential delays, customer service teams face a surge in inquiries, adding operational stress.

Using alternative carriers is also far from cheap. Shipping costs with these carriers can run 30% to 40% higher than Canada Post, creating a financial squeeze for businesses operating on thin margins.

This has left some retailers with tough choices: absorb the costs, raise product prices, or pass on the higher shipping fees to customers, risking further sales declines.

A Compounding Crisis for Supply Chains

The strike comes on the heels of other supply chain disruptions, including port shutdowns in British Columbia and Quebec. Retailers already grappling with inventory challenges now face another layer of complexity as delayed shipments, higher costs, and logistical hurdles converge during the busiest time of year.

Strategies for Retailers: Adapting to the Canada Post Strike

Amid the challenges of the Canada Post strike, retailers are showcasing resilience and adaptability by implementing proactive strategies to minimize disruption and maintain customer satisfaction.

Leveraging Alternative Carriers

To keep goods moving, many retailers have turned to alternative shipping providers. Major players like FedEx, Purolator, and UPS offer robust networks and reliable service, while smaller local couriers, such as Envoi, specializing in same-day delivery, are also gaining popularity for their cost-effective, flexible solutions.

However, these alternatives often come at a higher price—sometimes significantly more than Canada Post’s rates. Many retailers are choosing to absorb these additional costs to protect customer relationships, viewing it as an investment in loyalty and long-term business success.

By prioritizing customer retention over immediate profitability, retailers aim to reassure shoppers during a critical time when trust and reliability are paramount.

Prioritizing Transparency and Communication

Honest, proactive communication has become a cornerstone of retailers’ strategies during the strike. Retailers are taking extra steps to manage expectations and keep customers informed:

• Updating websites with visible notices about the strike’s impact.
• Adding signage in physical stores to inform in-person shoppers of potential delays.
• Adjusting checkout processes to provide accurate estimated delivery dates.

While transparency may lead to an initial increase in cart abandonment, retailers recognize that clear communication fosters trust and enhances customer loyalty in the long run. Customers appreciate being informed, even when the news isn’t ideal, and are more likely to remain loyal to retailers who prioritize honesty. It's a crucial part of a great shipping experience.

Strengthening Omnichannel Solutions

The strike has highlighted the value of omnichannel strategies, especially alternatives like in-store pickup. Retailers are encouraging customers to use options such as Buy Online, Pick Up In-Store (BOPIS) to sidestep delivery delays and maintain timely fulfillment.

Implementing this strategy requires retailers to adapt their operations:

• Inventory Management: Ensuring sufficient stock at stores to meet increased demand for in-person pickups.
• Customer Experience: Streamlining the in-store pickup process to make it quick, convenient, and hassle-free.

Promoting omnichannel solutions allows retailers to preserve sales while offering customers a reliable, flexible alternative. Additionally, this shift demonstrates the importance of integrating online and offline channels to respond to evolving customer needs during crises.

Preparing for the Future: Lessons from the Canada Post Strike

The Canada Post strike has been a wake-up call for Canadian retailers, exposing vulnerabilities and reinforcing the need for long-term strategies to navigate disruptions. Advocacy efforts by organizations like the Retail Council of Canada (RCC) and lessons from this strike provide a roadmap for building resilience in the industry.

Advocacy for Retailers

The Retail Council of Canada, representing retailers of all sizes, has been at the forefront of efforts to address the strike’s economic impact. By working closely with the Minister of Labor, the RCC has highlighted how the disruption jeopardizes Q4 sales—a critical period for the retail sector—and poses broader risks to the Canadian economy.

To minimize these consequences, the RCC is advocating for swift resolution through back-to-work legislation, backed by data and insights gathered from retailers nationwide.

Lessons Learned

The strike underscores the dangers of over-reliance on a single shipping provider and draws parallels with other challenges, such as those experienced during the pandemic. Moving forward, retailers must take proactive steps to strengthen their operations:

• Diversify Shipping Options: Partnering with multiple national and regional carriers can provide flexibility and ensure continuity when one service is disrupted.
• Develop Robust Contingency Plans: Comprehensive planning is key. Retailers need strategies that address alternative shipping arrangements, clear customer communication, and inventory management adjustments during disruptions.
• Strengthen Omnichannel Capabilities: The strike has reinforced the importance of omnichannel strategies like Buy Online, Pick Up In-Store (BOPIS). These options offer reliable alternatives for customers and reduce dependency on shipping services during crises.

Conclusion

The Canada Post strike has been a wake-up call for retailers across Canada, emphasizing the importance of swift adaptation and strategic planning. While immediate actions, like turning to alternative couriers or enhancing in-store pickup options, help mitigate short-term challenges, the disruption highlights the need for broader, long-term resilience.

Retailers should take this opportunity to evaluate their operations. Diversifying shipping options, building contingency plans, and strengthening omnichannel capabilities are not just strategies for navigating a strike—they are investments in the future.

Whether you’re a small business delivering locally or a larger retailer shipping nationwide, proactive measures now can reduce vulnerability to future disruptions.

Clear communication with customers is equally vital. Transparency about delivery times and fulfillment options reassures customers and reinforces trust, even in challenging times.

By keeping customers informed and offering reliable alternatives like “Buy Online, Pick Up In-Store,” businesses can turn potential setbacks into moments of loyalty-building.

The strike is a reminder that disruption is inevitable. However, with the right mix of adaptability, innovation, and preparedness, Canadian retailers can not only weather such storms but emerge stronger and more resilient for the future.