Metro Vancouver small business owners fed up over Canada Post costs

"The losses from that kind of scenario per year were several thousand [dollars] for sure”

Vancouver small businesses are losing money and potentially sales because of Canada Post shipping costs | Photo: Canada Post

Fed up. Frustrated. Concerned.

That's the sentiment from small business owners in Vancouver dealing with Canada Post even while a spokesperson for the postal operator says, "parcel rates are fully competitive within the industry."

When the Canada Post Corporation Act came into effect in 1981, the Post Office Department of the federal government was abolished and Canada Post became a Crown corporation that has the "exclusive privilege" to deliver mail within Canada.

The intention was to secure financial security and independence for the postal service, but as of late many small businesses are feeling the effects of this arrangement with high shipping rates, lost packages, and poor customer service with no other alternative to turn to.

How do prices affect small businesses?

“The prices are so high and the service so terrible that it impacted my businesses in a noticeably positive way when I moved across the border,” says Eleanor Lecocq, an attorney and the owner of the formerly Vancouver-based jewelry and cashmere scarf business Elle Florence.

It moved to Seattle in 2019.

“If you shipped regular Canada to the U.S. until at least 2019 you got no tracking. I remember it being about $13 per bubble mailer—so, not cheap," she explains.

"It took about 2 weeks but if [it got] delayed there was no way to tell and I often had to refund customers who didn’t understand the problem coming from the US where it takes 3 business days on average. The losses from that kind of scenario per year were several thousand [dollars] for sure.”

Lecocq is not alone in experiencing product losses, and some people have reported damage as well.

Shoubi Wu owns Vancouver-based tableware company Lineage Ceramics and has experienced reports of breakage when using Canada Post as a courier. The rising cost of shipping rates forced the company to lay off staff, she adds, and raise the prices of their products for both retail and wholesale which has also caused their sales to drop.

Similar issues are reported by Randa Salloum, owner of the preloved luxury store Collective Will. 

“It stops a lot of people from checking out on my online shop. Shopify & Canada Post charges $13-$15 within Vancouver and upwards of $40 to Toronto. It's really f****ed up!”

She says she tried offering free shipping on orders of $75 or more but it cost her too much money, and even when she changed it to $120 she was having to fork over $25 out of pocket to ship something to Burnaby.

Imogen O’Neal, better known on the Internet as the Hazel Witch, runs an online crystal business and has offered free shipping on orders over $100 since she started her business despite being a one-woman operation.

"Honestly, I know that the free shipping option is important to my customers," she shares. "I often thought I might have to remove it. Ultimately I always decide to pay out of pocket instead, because I don't want to disappoint my customers. There is definitely no magic way that I'm able to offer free shipping, it really does just come out of my own money now more than ever."

Like Lecocq and Wu, O'Neal has also experienced lost packages and breakage but says thankfully it is easy to file a claim on domestic parcels and get reimbursed by Canada Post.

"However, tracked shipping to the US is so expensive through Canada Post, and untracked shipping means that I have basically no guarantee that my orders are getting delivered," she adds. "If I was to use Canada Post and use an untracked method of shipping to the US, there would be basically no insurance or protection should that parcel get lost."

Finding workarounds and solutions

There are also other private shipping services, like DHL, small businesses could use, but Salloum says that they are largely inaccessible to customers because there are fewer locations. Canada Post is in Shoppers Drug Mart, London Drugs, and everyone has one nearby.

For shipping to the U.S., O'Neal and many other businesses have turned to third-party services to work around Canada Post's U.S. shipping policies.

Rachel “Tuna” Petrovicz, runs an illustrative business under the name Art By Tuna and started out by selling everything from stickers and enamel pins, to short-run designer toys and graphic novels but due to rising costs shifted their mainstay offerings to paper goods to avoid shipping above lettermail rates.

They’ve also employed several tools to help with shipping costs such as a slotbox, which is a box specifically designed to ensure the shipment can fit in the lettermail slots.

Petrovicz and O’Neal also use ChitChats, a middleman shipping service that transports and hands packages off directly to USPS for U.S. and international shipments, so parcels are shipped “domestically” in the U.S. Petrovicz doesn’t know how they are able to offer such reduced rates but says, “there are a number of services that can do this nowadays.”

Canada Post told V.I.A over email that they "determine shipping rates based on several factors, including the origin and destination, which also consider population densities. The parcel weight and size, costs of processing and transportation and delivery are factored into the rate."

"Given our dual mandates to remain financially self-sustaining and to provide affordable postal service for Canadians, we work hard to maintain reasonable, competitive prices and to provide options to meet a range of needs."

They also offer small business accounts which provide entrepreneurs with a pick-up service and a discount of up to 34 per cent on shipments within Canada and up to 58 per cent internationally. 

Do Small Business accounts really help?

Petrovicz says even with their Small Business Canada Post account services like ChitChats offer better rates.

O'Neal also explains that since 2019 the usefulness of the Small Business account has decreased significantly.

"At first it was super helpful in cutting my shipping costs down. I was able to get a few dollars off each parcel which was particularly useful when I was just starting out and didn't have much money to spend out of pocket. Shipping costs have been steadily going up since then, to the point that my Small Business discount really doesn't supplement much of the cost," she says.

"This is largely because of the fuel surcharges that Canada Post charges, which have just exploded in the last few months. For example, last week I sent a small parcel to Newfoundland, and the shipping itself cost me $19. I was able to get a $2.50 discount from my business account, but then the fuel surcharge was a further $6.50 on top of that."

"Keep in mind, prior to last month I hadn't seen fuel charges ever pass $3 maximum."

The fuel surcharge also contributes to domestic rates being more expensive than international rates because according to Canada Post "international shipping rates are set by the Universal Postal Union and its 192 members, as well as through bilateral agreements."

O’Neal hopes to hold on to her free shipping policy but says “since the recent price hikes this year, it makes me more nervous about having a small business than I ever have been."

"Owning a business is already fairly stressful and the possibility that Canada Post could keep raising prices and mean that I would have to hike my shipping prices up is worrying.”

Petrovicz is frustrated on behalf of their customers who were once evenly split between Canada and the U.S., but are now largely south of the border.

“It is easier to make sales with better shipping rates,” they say. “Thankfully they seem at least understanding of the situation for small businesses and I don’t receive any complaints."

"I cannot be sure how many sales I lose due to these high shipping costs, but as a supporter of other small businesses, I know I myself have been turned away by those costs in the past."

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