13 part 1: Cross-Border Chaos: The 2024 Canada Post Work Stoppage and Its Ripple Effect on e-Commerce

Host: 00:00:00

This is Outside the Box with Asendia USA, a podcast educating US based brands, marketplaces and E tailors on international shipping topics and how they can expand their global e commerce footprint.

Nick Agnetti: 00:00:13

Happy New Year everybody and welcome back to Outside the Box podcast with Asendia USA. I am one of the co hosts, Nick Agnetti and we've got our new co host which you've already met once, Jason Rowland.

And you may remember he joined us in episode 10 this past October where we discussed the impact of AI. We had John Walsh with us. We talked about how it's going to impact global e commerce, shipping and all things related to AI compliance.

And that's also where the coined nickname Senor Jason came from. So I'd like to welcome everybody or I'd like to welcome Jason to the podcast on top of that.

Jason Rowland: 00:00:48

Yeah, thanks Nick.

Nick Agnetti: 00:00:48

Oh yeah, go ahead, Jason. No, please.

Jason Rowland: 00:00:50

Yeah, no, I'm excited to be here and kick off this second year of these episodes with you guys and just continue bringing the information to, you know, our customers and our shippers and help them expand their, you know, global footprint by discussing topics that are important to them and kind of how they influence the market and how different, different products of ours are out there to help them in the marketplace and, and be a source of good information for them to keep them, to keep them up on current compliance topics and, and different products that Asendia offers and uh, and how we can help them achie goals. So yeah, I'm excited to be here. Thanks for, thanks a lot for having me.

Nick Agnetti: 00:01:34

Perfect. All right. I love it.

So, okay, so, so for the viewers and listeners today, we're very excited to have you back and again I just want to really highlight, you know, our focus is to help all of you that are listening and watching really navigate the cross border direct consumer logistics landscape.

So today we're going to get things started with a very special episode, or special edition if you will, of Canada and everything that happened related to the Canada work stoppage, Canada post strike, if you will. And we're going to really just drill down on this.

,: 2024

Jason, do you want to get started maybe introducing Dave? Sure.

Jason Rowland: 00:02:24

Yeah. Like you mentioned, we have two great guests joining us today.

We have Dave Mays, the CEO of Broadreach, which is also an Asendia company, who you may remember was one of the very first guests on the Outside the Box podcast back in February last year when, when we got off the ground. And then we also have with us today Tom Foley.

Tom is the Vice President of Government affairs and Client retention with Ascendi USA and they're here with us today to discuss the events that led up to the breakdown with cupw as well as the impact to the Canadian economy overall and then discuss some alternative shipping opt for Canadians and wherever the conversation takes us from there. So yeah, really looking forward to it. I think it's going to be a great talk.

Nick Agnetti: 00:03:09

Yeah. And thank you guys very much for joining. So why don't we start.

Dave, if you can give a little, I know that you were on previously as Jason mentioned, if you could give a little background to yourself again, just kind of refresher for everybody, that'd be very helpful.

Dave Mays: 00:03:23

Yeah, good to be on again different circumstances. Important topic I've been doing. We'll call it US to Canada, US outbound parcel logistics cross border.

For about 25 years I've worked for integrated couriers consolidators, built and sold my own company have rebooted with this joint venture with Asendia Post Covid. Really taking a devolving market during that disruption and bringing it back to where it should be in terms of service quality, costs and the like.

It's been a fantastic two and a half years, three years here with Asendia building out from a very good starting point with the infrastructure in the global network that Asendia has.

My goal effectively is to sell into and build the northbound network that we have developed to us merchants looking to improve their customers experience to Canada. And again, I can go into as much detail as you want during the podcast, but we're building and we're growing.

We have seven facilities in Canada, two in the states to complement the five or six that Asendia has Middle Mile Trucking Network. And we're moving millions and millions of parcels a year.

Nick Agnetti: 00:04:44

Perfect. Sounds like there's gonna be a lot to talk about there. Okay, Tom Foley, Tomahawk. Can you give us a little, little background please?

Tom Foley: 00:04:56

Well, on the nickname Tomahawk, that was when we were playing golf and I hit the ball straight into the woods. So somebody said hey Tomahawk and it's stuck. So but hi everybody, my name is Tom Foley.

I really appreciate you inviting me onto it and also being the. This is the first one of the year. It's a great thing.

I think it's a good topic, a very good topic considering what went through and still kind of going through. We'll chat about that later. But my role at Asendia, I've been here for about 11 years with GlobeGistics, Asendia.

Prior to that, I was with the federal government and the U.S. postal Service for 30 years, 32 actually, and we're about the last 12 of it is where I worked at USPS headquarters in Washington, D.C.

where I managed all their products and their sales teams. So very, very active in the international space for Accendia.

I manage postal relations and government relations, but I also manage a team of seven account managers that manage some very large accounts for us. And I also manage some very large accounts myself personally.

IMAG. We've been around since: 1997

I guess nobody wants to kick me out. But we provide some really good information to the mailing industry.

We have consolidators, we have marketers, we have vendors, all international mailing organizations. We have the PC postage vendors. They're all members of the iMed Group. We have weekly calls. We provide a lot of information.

And one of our members is the U.S. postal Service. So we have the direct line to the top folks at the usps, plus, of course, with contact. So. So it's a, it's a good.

It's a good organization and it's a great way to get information ourselves and then get it out to the community. So that's, that's kind of what my role is here.

Nick Agnetti: 00:07:00

So just, just that, Tom. Huh? Just that little bit there.

Tom Foley: 00:07:04

That's it. Just a little bit.

Nick Agnetti: 00:07:05

Just a little bit here and there.

Tom Foley: 00:07:07

No big deal.

Nick Agnetti: 00:07:09

All right, well, I think without. Let's just knock the rust off the brakes here and get right into it.

So I have, you know, we, especially for the viewers and listeners, we have some talking points to go over, but we really want today to be focused on being educational. It was the period of the Canada Post work stoppage, so it lasted, you know, approximately 32 calendar days. But it goes beyond that, too.

We're going to talk today about, you know, where did that kind of come from, how did it come to fruition, the day that it happened and things that happened in between during the work stoppage, as well as some of the backlog issues.

We're Going to talk a little bit about service interruption, service experiences and then we're going to talk about, we will be talking about some of the things Asendia has done to really get ahead of that, as well as talk about our own Canadian delivery network, as Dave mentioned, and how we were able to really help circumvent some of these delays and get rid of some of that hurt and pain that was caused by this strike and work stoppage. And then there's, you know, there's going to be a whole bunch of op ed in between.

Hopefully our lovely producers will do a bunch of wonderful editing to make this make sense for everybody. But buckle up, we're going to get started. So, okay, I'm going to start with. I love facts, statistics, hard numbers.

It's great talking points to get us started. So here we go. So we'll start this way and then we'll break in.

And Jason, after I get done with my little three cursive paragraph here spiel, if you want to jump in before we. We hand it off to anybody, that'd be perfectly fine.

Tom Foley: 00:08:40

So.

Nick Agnetti: 00:08:41

,: 2024

The work stoppage is what they're calling it in the news and such came after it was Canada Post Field to reach new contract agreements with the cupw, which is the Canadian Union of Postal Workers, represents more than 55,000 of the carrier's employees. So those negotiations, I guess from what I read, and this is all I'm going off of and maybe Tom can talk more about this. I'm not sure.

ted supposedly in November of: 2023

Outside of speculation, negotiations and mediation did not progress to what we call mutually acceptable position.

,: 2024

So, Jason, do you have anything that you want to add in terms of just those facts, that timeline.

Jason Rowland: 00:09:53

No, just, just. I think it's a really important detail for, for people to understand is that this is not over. We haven't seen the end of this yet.

This is like they call starting out bad news.

Nick Agnetti: 00:10:02

Jason, we're going right to bad news right here.

Jason Rowland: 00:10:04

Right too. Right.

Nick Agnetti: 00:10:05

Okay. Okay. Yeah.

Jason Rowland: 00:10:06

They. This is a timeout, right? This is A get everyone back in the, in into work.

Let's get the peak period, which is the most important time for a lot of retailers.

Let's get this stuff moving and then, you know, after a certain amount of time we'll come back to the table and start these negotiations up again and maybe come to a long term. This is not something that we've seen the end of yet. And, and, and I do.

That's why I believe it's so important for us to talk about it now because there are things that we are able to do to help people get through that if it were to happen again that maybe they didn't know about the first time, but they can take advantage of now.

And yeah, there are definitely more to come on this and that's why we're, we're so, you know, blessed on our side to have Dave and Tom here to, to help guide us through what, uh, what surely will be another round of hurt on E Retailers if, if they haven't figured this stuff out the first time.

Nick Agnetti: 00:10:59

I'm with you.

Tom Foley: 00:10:59

Yeah, yeah, go ahead. Let's hope they do. Let's hope they do. I mean, you know, they talked about this for, like you said, over a year.

I think everybody was kind of hoping, I know, Dave, you. And I told.

I really thought that they were going to have some kind of sporadic strikes and rolling strikes and rolling work action like they did the last time. I don't remember what year it was. Dave, you might remember what year that was, but we thought, assumed and I think.

Okay, yeah, and I think everybody kind of assumed that that was what was going to happen.

And then all the, all the, all the calls I was on, even, even what was told to the universe, the upu, the Universal Postal Unit, they were kind of told the same thing, kind of led in that direction and then boom, it just went nationwide and it was, it was horrible. I mean, it was really tough.

Dave Mays: 00:11:46

So Canada is the second largest country by land mass and the second.

Jason Rowland: 00:11:56

I.

Dave Mays: 00:11:56

Guess, least densely populated country. I think it's Russia on land mass and I think it's Australia by, by density, population density.

We're talking about a lot of area, not a great time of year to go on strike.

People, businesses, small, medium and large, depend on the postal service to cover some very difficult terrain and geographies, some really important functions in the Canadian economy. And I pretty much fell off my chair when they actually went on strike.

I would have lost a lot of money if I were betting that this would not have happened this way. As Tom said, A rolling strike, a variety of other ways to have semi work stoppage without complete work work stoppage.

So the impact that we felt was unprecedented in my 25 years doing this in that literally they were not accepting mail and parcels, they were not moving, they were not obviously transporting or processing.

And our commitment to our customers were to get everything delivered that was humanly possible to be delivered in this extremely important time of the year. The most important time of the year. And it was challenging to say the least.

Jason Rowland: 00:13:13

Yeah.

Nick Agnetti: 00:13:14

Now you were talking about impact. So one of. I've said it a bunch of times. I'm going to continue to say it on episodes. We have talking points. Right. That's how we end.

But we keep things conversational. So one of the primary talking points we want to talk about today, just impact. Right. So impact to. We are as a US Based entity. Right.

We have facilities, of course, like Dave mentioned in Canada too.

But we're talking from our perspective and from hopefully and most likely your perspective as a shipper or brand or somebody that's in the United States, that's shipping goods outside of the United States. How did this, how did the Canada Post work stoppage impact you? Right. Or the viewer. Listener. So let's talk about impact.

And again, I love sharing some numbers.

So according according to the Canadian Federation of Independent Business, the daily cost of the strike on small and medium businesses set at approximately $100 million per day, per day. Total financial hit to small firms reached nearly $1.6 billion since the strike started.

And the CFIB reported nearly 73% of small business owners say they will be using less Canada posts in the future because of the strike. I mean, I, I understand.

And just for clarification for viewers and listeners too, we're talking November 15th hits, zero mail, zero parcels are being processed or delivered during the active strike. So as Dave mentioned, we're talking. One of the things I wrote down here and I have a whole bunch of things I wrote down here.

But in terms of backlog and we'll get to backlog is almost a separate issue here.

But just as soon as they released and started processing come, I think it was December 19th, what I mentioned, approximately 250,000 printed passports, 215,000 printed passports started getting released to then be delivered to Canadians. So I mean, that's just one small area of impact, considering different things that people depend on the mail post for on a daily basis.

Jason, what are your thoughts on that?

Jason Rowland: 00:15:04

Yeah, I think if you start going down the list of ways that the impact of this you know, affected people and could be anything, right? It could be, you know, public assistance checks, it could be paychecks, it could be anything. Any.

You know, the number of things that people rely on, on mail service to do for their daily lives is, Is, you know, probably in the thousands.

So, yeah, I think there's no shortage of ways that we could, we could talk about how people were impacted by this and, and how they stand to be impacted, you know, again, in the future.

Nick Agnetti: 00:15:39

Okay. And so with that, Tom, if we talk a little bit, if we can shift a little bit to service. Right.

So we're looking at, through our DDU or an Asendia's World, our EPAC plus product. Okay. If we look at that and what we were doing when it came to lightweight parcel shipping to Canada, those weren't moving at all. Right?

That's correct.

Tom Foley: 00:15:57

Right, that's correct.

And I also wanted to add to what Jason was saying first, is that we also work with a lot of government institutions like Social Security and some of these other government agencies that are required by law to have certain mail pieces delivered by a certain date outside of the U.S. so we were working very closely with them to try to figure out how to do this, and a lot of them got stuck.

They had to get waivers and all this other. Because it affected government mailings. It affected a lot of, A lot of mailings that were done, obviously the holiday shipping.

But there's a lot of expatriates up in Canada, obviously, that just affected across the board. I mean, we could just go on forever, but. Yeah, Nick. So when Canada Post struck back on the 29th.

Excuse me, on the 15th of November, the USPS didn't suspend for another few weeks. So the USPS was still kind of accepting that mail, but they couldn't get it out of their buildings. They asked us not to accept it.

So we kind of did that. But at the same point, we didn't want to put any kind of a bind on our customers.

Obviously, we wanted our customers to continue to fulfill the orders. Nobody knew when we were going to actually be able to bring that mail back up to Canada. So we opted to hold it. And we did a very good job.

We processed it, we scanned it, we let our clients know, okay, we got it, it's safe. But the USPS was not sending anything up to, to Canada until, you know, back until January. So you're right. Nothing. Nothing moved. You're right, Nick.

Nothing moved.

Nick Agnetti: 00:17:33

So a number that I read, I.

I've read a slightly varying number, but I've read that in the backlog of just the parcels, not mail parcels in Canada that once the strike ended was somewhere around 10 million pieces. Is that.

Tom Foley: 00:17:47

Well, yeah, yeah.

And I can tell you just from the usps, just their trailers that were sent up there during this strike because Canada Post still allowed the USPS to send trailers of stuff that they already had. You know, it's radically, especially from JFK. So they had 53 trailers on hold just of the Canadian, just of what the USPS said.

But then it blossomed very quickly to over 90 trailer loads of mail just sitting in a secure spot somewhere and nothing was being processed anywhere.

So that's when the USPS said okay, wait a minute, we have to kind of suspend acceptance ourselves and, and let Canada Post clear what they got, which took up until like a couple of days ago and it's still not particular, you know, completely cleared out right now.

Nick Agnetti: 00:18:34

So yeah, and how did that. Dave, how did. Okay, so yeah, think about pivot real quick. So we talked about. Okay, so EPAC plus is shut down, right?

So, so there's EPAC plus to Canada just specifically for everybody listening. That's what we're focused on here. So what about the impact to our DDP network, our Canada Direct access network? What did that look like?

Dave Mays: 00:18:56

It was compounding because our commitment to related parties, our parent company merchants in the in the US was to get everything delivered, even if via an alternative delivery network. So we range somewhere between 15 and 25% of our deliveries go via postal Canada Post.

During the strike period, 2% were held, 2% were candidate post delivery only points. Maybe it's a PO box or a community box or a extremely rural point that is only handled by Canada post up north, etc.

So two weeks prior to the possible strike period, we began alternatively routing all the direct entry product from the States into ALT delivery networks, except for the 2% we were working with the SENDIA to do. Similarly for some of the usps, only shippers anticipating this could go to strike. So then when it actually did, we moved all that over.

So we had a buildup of Canada Post parcels in the warehouses building slowly over the 32 days or whatever the period was. And then we had all of the parcels that we had to deliver via ALT methods generally set up to do that.

But those carriers were feeling the impact of additional volume, especially after the strike. We were doing this two weeks in advance. So we felt it with our current vendor partners, with our current northbound trucking network.

Because again, we were moving USPS stuff into the Directed network. And then our facilities and staff were having to deal with building parcels that weren't able to be delivered.

And it was, it was touch and go there for a while. You know, does a merchant want to return them to the States?

Does a merchant want to find some alt delivery address, a retail shop to meet the parcel there and get delivery for the recipient? And we can't take each individual parcel and understand the economics and the urgency. So it was, it was very, very tough.

I can't, I can't understate how that 32, 32 days, really 32 plus the two weeks prior, plus all the planning impacted our business. It was significant.

Nick Agnetti: 00:21:10

I gotta say though, just sales perspective and I'm sure Tom could echo and I mean Dave, in the heart of things, you're in sales yourself, right?

Is that I'm so thankful that we have the network that you built, right, that we had that to lean on because you know, for the customers that no matter how many times, you know, you can lead a horse to water, can't make them drink, right? But how many times you, you prep people for, hey, this is very real. This is a real possibility.

I think we should really look at transitioning some of this volume.

The ones that did take advantage of that, we're so thankful that they did because they were able to keep things moving and keep things moving very well, I mean, very well in terms of hardly a blip in transit difference than what they were experiencing, let's say two months prior when, when this wasn't even a topic of discussion. Thank you everybody for listening and watching episode one of our Canada Special edition. Join us for part two. Coming soon.

Host: 00:22:04

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