Canada Post Workers Vote in Favor of Strike – May Impact U.S. Sellers

Canada Post workers wrapped up a strike vote on Sunday and today the Canadian Union of Postal Workers (CUPW) announced that well over 90 percent of its members signaled their willingness to walk off the job.

93.8 percent of urban letter and parcel carriers and 95.9 percent of rural and suburban members approved the strike measure as both groups have been negotiating separate contracts since late last year without success.

Canada’s Labour minister called on both sides to continue negotiations with the help of a third party to avoid a possible strike or lockout by September 26.

“The minister has appointed federal mediators to assist the parties in their negotiations and encourages both parties to continue their discussions in an effort to reach an agreement and renew their collective agreements.”

Labour Minister Patty Hajdu’s press secretary Veronique Simard

Canada Post said that it made a new offer on Friday that reflected the growth in parcel volume and included wage and benefit improvements. The labor union described the proposals as “unacceptable.”

Before the strike vote was made public, the union prepared its members that they should stock up on prescription medications as during a strike, union members would be 100 percent responsible for any medications.

This appears to signal the union is willing to hold out for a longer period of time should a strike become necessary.

Holiday Season Impact

For U.S. eCommerce merchants a Canada Post strike could become a significant problem for early holiday sales.

While Canadian sellers may be able to utilize domestic carriers instead of the postal service to fulfill orders, many Canadian customers prefer the shipment from the U.S. origin by postal service as both FedEx and UPS charge huge brokerage fees to Canadian recipients on ground shipments.

While there is hope that this strike can be averted, U.S. sellers should monitor the situation and may need to consider if shipping to Canada will be worthwhile if Canada Post workers go on strike.

If using UPS or FedEx ground as an alternative, Canadian buyers generally have to pay a brokerage fee on ground shipments which can become a significant additional cost to the tax bill they will receive from either carrier.

  • UPS Brokerage Fees to Canada can be found here.
  • FedEx Brokerage Fees to Canada can be found here (Page 58).

This can result in some buyers refusing shipments, which then are returned to the U.S. shipper at the shipper’s cost.

In most cases, shipments by air do not incur additional brokerage fees from either UPS or FedEx and that could be a solution for some sellers.

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