It’s a problem that doesn’t seem to be going away any time soon, and some Canadian producers are fed up.
Parcel shipping costs have drastically jumped over the last few years and it’s eating into business profit margins.
Calgary clothing company Local Laundry is rethinking its shipping model thanks to what its owner calls “exorbitant” fees.
“It costs between $16 and $24 to ship within the country,” Dustin Paisley told CTV News. “But I can ship a package to New York or somewhere in the States for almost half that price.”
The costs are especially problematic for the small local business, which has been promising its customers $10 shipping for years. That promise is currently being rethought.
“What that increase in shipping cost does is just eats more into our margin, which is already not the highest,” Paisley said.
The Calgarian recently went viral on social media app TikTok for a video in which he complains about the rates. He says the thousands of comments he has gotten from people agreeing with his statements show many Canadians are also upset with the current shipping model.
“Unfortunately, there are not a ton of options out there, so you’re stuck with the rates and options you’re given,” Paisley said.
Canada Post turned down a CTV News interview request.
A statement from spokesperson Phil Legault reads, in part “Parcel rates are non-regulated and fully competitive within the industry. Canada Post determines shipping rates based on several factors, including the origin and destination, which also consider population densities.”
The statement didn’t address recent upticks in price, but shipping expert and Jori Logistics worker Sam Woods says there’s a reason why it’s been costing Canadians more to send parcels.
“The trucking fee costs and all those inland fees are going up significantly,” he said. “We’ve seen that fuel surcharge percentage go up three, four times what it was in this period last year.”
Woods suggests smaller businesses look to larger volume shippers inside Canada to facilitate orders. He believes using air shipping — not land — could save some money.
He also pointed out most companies, like Canada Post, are driven by profit. A lack of competitiveness in the Canadian market leaves consumers and small producers with few options.
“To the average shipper, that doesn’t have much buying power to negotiate many rates, they are really at the whim of the market,” Woods said.
“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,” the Canada Post statement reads.
Paisley believes it’s not sustainable.
“I’m looking for other options,” he said. “It’s ridiculous right now.”
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