The holidays are a time of anticipation and joy, especially for teenagers eagerly awaiting their gifts. For weeks now, my teenage daughter has been asking daily about the hoodie I ordered for her in mid-November. Every time she sees an unmarked van or hears the knock of a delivery, her eyes light up—only to dim when it’s not what she’s been waiting for. This isn’t just a personal anecdote; it’s emblematic of the profound disruption caused by the ongoing Canada Post strike.

As Christmas approaches, the stakes are rising for millions of Canadians. The holiday season amplifies the importance of timely deliveries, yet the strike has thrown a wrench into the country’s logistics system. With an estimated 13.6 million undelivered packages sitting in warehouses, the scale of disruption is staggering. Beyond the frustration of individuals, businesses are losing revenue, promotional campaigns are failing to land, and Canada Post’s reputation is taking a severe hit. But beyond the immediate chaos, this crisis reveals deeper strategic flaws that need addressing.

The Scale of Disruption

The Canada Post strike, which began on November 15, 2024, has created a massive backlog of undelivered items. Initial estimates of 10 million delayed packages have swelled to over 13.6 million as of mid-December. For businesses, this means lost revenue during the year’s most critical sales period. For individuals, it’s a season marked by uncertainty and unmet expectations. And for Canada Post, it’s a reputational disaster.

Adding to this disruption are the 55,000 striking workers who face their own unfortunate uncertainty. These workers, essential to Canada Post’s operations, are locked in a dispute over wages, working conditions, and job security—highlighting the tension between maintaining financial sustainability and fair treatment of employees.

Financially, the impact ripples through the economy. Retailers relying on Canada Post to deliver e-commerce orders are scrambling to find alternatives, often at higher costs. Meanwhile, the delays are eroding consumer confidence, pushing more businesses to consider private carriers like UPS and FedEx, further threatening Canada Post’s long-term market position. Compounding these issues are Canada Post’s dismal financial statements over the past five years, which show cumulative losses of over $3 billion. These losses reflect deeper challenges in maintaining profitability while fulfilling its mandate of daily delivery to every household—an obligation that may no longer be financially practical.

To understand the current state of Canada Post’s challenges, we need a structured analysis—and that’s where Porter’s Five Forces comes in.

Canada Post Through the Lens of Porter’s Five Forces

Michael Porter’s Five Forces framework is a valuable tool for examining the competitive dynamics that shape an industry. Applying it to Canada Post reveals the structural pressures undermining its position.

1. Threat of New Entrants

The rise of small, agile logistics providers has intensified competition. These new players focus on urban markets and last-mile delivery, leveraging technology and lower-cost models. While Canada Post’s universal service mandate protects its rural dominance, it also shackles its ability to compete profitably in high-density areas where margins are better.

2. Bargaining Power of Suppliers

Canada Post’s unionised workforce adds significant fixed costs and limits operational flexibility. Strikes like the current one exacerbate this tension, underscoring the challenges of maintaining labour relations while competing with non-unionised or gig-economy-based carriers.

3. Bargaining Power of Buyers

Large e-commerce platforms like Amazon wield enormous influence. With in-house logistics networks, Amazon and others can bypass Canada Post entirely. Smaller businesses, while dependent on Canada Post for affordable rates, may begin seeking alternatives as reliability becomes an issue.

4. Threat of Substitutes

The growth of private carriers and gig-based delivery services provides viable alternatives. Companies like UPS, FedEx, and even Uber have carved out niches in urban logistics, offering faster and more customer-centric options. These substitutes erode Canada Post’s value proposition in its most profitable markets.

5. Industry Rivalry

Competition in the parcel delivery market is fierce. Private carriers focus on high-margin, urban areas, leaving Canada Post with lower-margin, high-cost rural routes. While Canada Post has invested in automation and infrastructure, such as the Albert Jackson Processing Centre, the returns on these investments are undercut by a shifting market landscape and aggressive competitors.

Strategic Bets: Time for Better Choices

Setting aside the immediate issues of the strike, Canada Post must confront a more pressing question: Is it making the right strategic bets? Investments like the Albert Jackson Processing Centre were intended to position Canada Post for e-commerce growth, but they may represent an outdated, centralised approach in an era that favours decentralised, regional fulfilment. Moreover, Canada Post’s core challenges stem from structural issues—union costs, a universal service obligation, and slow adaptability—that demand a rethinking of its operating model.

To remain competitive, Canada Post needs to:

• Focus on Core Competencies: Leverage its unparalleled rural network while finding ways to partner or collaborate in urban areas.
• Invest in Technology and Agility: Improve tracking, customer communication, and operational flexibility to compete with private carriers.
• Redefine Its Value Proposition: Explore new services that differentiate it from competitors, such as sustainable delivery options or community-based logistics hubs.

Conclusion

The hoodie my daughter eagerly awaits is more than just a delayed delivery; it’s a reminder of the broader stakes at play for Canada Post. The strike may end, but the underlying challenges won’t disappear. For Canada Post to secure its future, it must adapt—not just to e-commerce growth, but to an evolving industry landscape that demands smarter, bolder, and more forward-thinking strategies. Only then can it deliver on its promise to Canadians, not just during the holidays but year-round.