2023 Annual Report

competitive landscape

The COVID-19 pandemic upended the ecommerce landscape. Fuelled by people working from home and lockdowns to keep Canadians safe, online shopping exploded – transforming the parcel delivery market.

The surge in online shopping attracted an influx of smaller, agile parcel delivery companies. Designed for digital commerce, these low-cost, disruptive new entrants have changed the market. They operate without legacy regulatory measures and typically rely on lower-cost, contracted labour.

Their low-cost business model allows them to deliver six or seven days a week, offering faster, cheaper and more convenient services, raising customer expectations in the process. Our competitors are:

  • Offering weekend and evening delivery. We are the only major carrier that does not offer regular six-day-a-week delivery in major urban centres; some competitors offer seven-day-a-week delivery nationally.
  • Offering lower prices largely due to their use of low-cost, contracted labour. These disruptive delivery companies have increased their market share five-fold since 2019.
  • Innovating with flexible parcel return solutions. The new entrants’ agility, flexible delivery model and low-cost structure is eroding our historically leading market position in ecommerce returns, putting pressure on another core revenue stream.
  • Dominating delivery in lucrative, high-density urban areas in Canada’s largest cities.

While Canada Post is innovating its Parcels business, the company’s cost pressures and lack of flexibility in its delivery model have challenged its ability to compete with agile, low-cost delivery providers.

Market share decline

Prior to the pandemic ecommerce boom, Canada Post maintained a strong leadership position in the parcel delivery market. But we quickly lost market share as the pandemic continued and disruptive new entrants capitalized on the growth in ecommerce.

Today, in the post-pandemic competitive landscape, we continue to lose ground to these low-cost new entrants. Our parcel delivery market share eroded to 29 per cent in 2023, from 62 per cent in 2019.

The Canadian ecommerce market is expected to double over the next decade. To capture some of this growth, Canada Post must be able to compete in this hyper-competitive environment. But it needs greater flexibility to change and evolve from an operating model that was largely built for the days of peak letter mail that ended almost 20 years ago.

Canada Post’s market share in parcel delivery
has eroded by more than half since 2019

Canada Post's market share in parcel delivery has eroded by more than half since 2019, from 62% in 2019 to 29% in 2023.