Sendle: Canada Post strike is a cautionary tale for Australia

With everything that has been happening in the world right now, it’s easy to overlook the events that have been unfolding in Canada. After a four week standoff between Canada Post and its 55,000 postal workers, the Canadian Government has been forced to intervene in December to end a labour dispute that brought its entire country’s delivery service to an absolute standstill. Laura Hill, the Managing Director Australia at Sendle shares her thoughts.

“Millions of Canadian residents and businesses have been affected, after nearly a month without deliveries. The peak holiday season is traditionally the busiest time of the year for Canada Post, with two million parcels shipped every day. Even with services partially restored this week, the backlog of undelivered parcels is huge, casting doubt on the arrival of Christmas gifts.

In northern communities where Canada Post is the sole mail delivery provider, the effects of the strike are more serious than empty spaces under Christmas trees. In a statement, The Assembly of First Nations, the country’s largest association of Indigenous groups, cited a potential health threat on those who rely on the postal service for the delivery of essentials, like medicine and cheque payments. Service Canada has reportedly withheld the delivery of 185,000 passports.

Small businesses have also been dealt a crushing blow in what should be their biggest sales period of the year. The Canadian Federation of Independent Business has estimated the postal strike has cost Canada’s small and medium businesses more than $1 billion. The hardest hit have been those in regional and remote communities where Canada Post is the only delivery option.

To alleviate the strain on the national and international delivery system, other carriers have been forced to step in to try to save Canada Post. Sendle is experiencing an unprecedented surge in parcel volume, with December figures expected to be seven times its 2024 monthly average.

If this is starting to ring alarm bells, then it should. The ability for a single carrier to wreak havoc on people’s livelihoods, businesses and communities serves as a cautionary tale for Australia.

Let’s just imagine for one moment that this postal strike happened in Australia. Australia Post dominates a staggering 75 per cent of Australia’s parcel delivery market. In regional and rural areas, this dominance is even more pronounced, with Australia Post controlling a remarkable 95 per cent of the parcel market. This monopoly exposes the vulnerability of our nation’s delivery infrastructure. A service disruption of that scale would have far more severe consequences.

Australia’s economic backbone, its 2.3 million small businesses, is heavily reliant on reliable delivery services. A staggering 1.6 million of these businesses reside in greater capital city areas, while over 700,000 are scattered across regional and rural areas of Australia. Should Australia Post falter, the ripple effect on the nation’s small business economy could be catastrophic.

A monopolistic parcel industry is a ticking time bomb. It not only inflates prices, degrades service quality, and stifles innovation but also poses a severe threat to entire industries and economies. In a digital economy, shipping is an essential service for people and businesses, and a single point of failure, such as a strike, severe weather event or cyber attack, puts livelihoods at risk.

We don’t want a country with a single large airline, a single large telco or a single large bank. So why do we want a single large parcel delivery provider?

Australia needs a world-class delivery system, not a government-sponsored chokehold.

A resilient delivery system requires a fair and competitive market. Which is why Sendle and many in the industry have been calling for Australia Post’s tax-payer funded infrastructure to be opened to private enterprises, to level the playing field and let the market innovate. This would create cheaper and more reliable shipping services and help Australia Post compete fairly and, for its sake, profitably.

We can’t afford to wait for a national crisis like Canada Post’s to act. If the Australian Government is serious about competition, it should look at the parcel industry as part of its sweeping competition reforms, and whether continuing to prop up a 150 year old postal service leaves Australians vulnerable.”