While businesses are bracing for impact with the news of a looming Canada Post strike, one Ottawa company is revving up to fill the gap and keep packages moving for retailers.
The Canadian Union of Postal Workers’ urban and rural mail carrier bargaining units issued 72-hour strike notices to Canada Post on Tuesday. The union also said its workers had received notice from Canada Post that they could be locked out Friday morning if a deal isn’t reached.
The potential disruption to postal service has Alok Ahuja, CEO and founder of Ottawa-based last-mile delivery platform Trexity, on high alert.
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He says his firm has seen a considerable increase in merchant signups for his courier service over the past couple of weeks as the likelihood of a strike or lockout intensified.
“We’ve had a massive uptick of people reaching out to our merchant success team to ask like, ‘What do I do? Can you guys be there and stick with us through the next eight weeks so that we can successfully close out 2024?’ and we’re there to support them. We help them create an account and minutes later, you could be making deliveries,” Ahuja told OBJ this week.
Jasmin Guénette, vice-president of national affairs at the Canadian Federation of Independent Business, says more than half the small businesses the organization has spoken to said they were negatively impacted by the last Canada Post strike in 2018.
“I remember that 61 per cent of small businesses said they were negatively impacted in regards to cash flow, because of delayed invoices and cheques,” Guénette said in an interview on Wednesday. “Another impact was the higher cost of delivery alternatives. Canada Post is still the cheapest service. If you go to a private provider like UPS, it’s more expensive.”
Sensing there was demand for cheaper and more effective local delivery alternatives, Ahuja and his business partners launched Trexity in 2019 as a competitor to services such as Canada Post and UPS.
“We have a flat fee, which is, in almost every case, about 70 per cent cheaper than using Canada Post, FedEx, Puralator or any of those other legacy carriers,” Ahuja said.
Ahuja says if Canada Post workers are off the job starting Friday, small businesses will suffer, especially as we inch closer to the holiday season.
“A lot of small businesses thrive in Q4 (October-December),” he noted. “A lot of them will make the bulk of their profits and their gross revenue and sales in these last three months, and then they’ll live off of that for a lot of Q1 (January-March).”
Guénette said 25 to 40 per cent of a typical Canadian retailer’s annual sales are made in the six weeks leading up to the end of the year.
“It’s a very important shopping season. If businesses cannot count on Canada Post to send and ship goods, it’s gonna hurt their bottom line,” he said.
Guénette says work stoppages and strikes over the last 12 months have been disruptive to small businesses, and he hopes the federal government will intervene to help those affected.
“I think the federal government must look at ways to avoid these constant work stoppages. We need to look at all labour relations are going at the moment in Canada … If you talk to small business owners right now, they will tell you that it’s very difficult to operate in Canada. (Constant strikes and work stoppages) are going to force many small businesses out of the market,” Guénette said.
Ahuja says a potential strike is yet another blow to small businesses that have struggled to survive the pandemic, interest rate hikes and other obstacles over the past few years.
“A lot of these local merchants came back to us and said, ‘God, (Canada Post) have got us jumping through hoops to fit their model and to do the things that they want so that we can hit our targets, and now they’re just gonna leave us.’ So they’re feeling a little helpless,” Ahuja said.
But if a strike happens on Friday, Trexity will be ready to step up, he added.
“We don’t have warehouses or fleets of vehicles – we have technology,” Ahuja explained, noting the company uses freelance couriers who respond to demand as required in markets across Canada.
Guénette says lower-cost services such as Trexity would absolutely help fill gaps in the market. The only issue lies in how well-known they are.
“This is what’s so great with entrepreneurship, right? It’s that people find solutions to issues that are happening in the marketplace. Hopefully those smaller guys being able to provide affordable shipping service can make themselves known and hopefully more businesses would be able to use those services. That would be ideal,” he said.
While Ahuja says Trexity is trying to generate broader brand recognition, the company has partnered with the likes of Invest Ottawa and local BIAs to help build trust among merchants in the local economy.
“We’re a startup, so we’re still trying to make some noise here. It’s great for brand awareness. But then for us, it’s all about community, right? (The possible Canada Post strike) is just another way for us to say, ‘Hey, listen, we’ve been here and we’re not going anywhere.’ So it just builds a lot of trust amongst the local economy,” Ahuja said.
It remains to be seen if CUPW will decide in favour of strike action or will be locked out come Friday, but Ahuja says Trexity will be there for merchants that may need a helping hand.
“We built this platform to help local businesses and to help local economies, and we have to step up… We don’t know what the outcome of this potential strike might be, but let’s do the most Canadian thing and step up and be there to support our local merchants.”
