Many cross-border e-commerce businesses, hoping to ship packages before the strike ends, are actively searching for better logistics alternatives.

1. Canada Post Proposes New Offer, but Negotiations Remain Deadlocked

On December 2, the national Canada Post strike entered its third week. On December 1, Canada Post submitted a proposal to the Canadian Union of Postal Workers (CUPW), known as the "comprehensive framework," in an attempt to restart negotiations and reach a new agreement. This proposal includes suggestions to make Canada Post’s delivery model more flexible and highlights progress on "other key issues" in the ongoing labor dispute during the holiday season.

The union had announced the nationwide strike plan on November 15, leading to a suspension of all mail and parcel processing and deliveries, further intensifying supply chain pressures during the holiday shopping season. While the Canadian government appointed a special mediator shortly after the strike began, negotiations broke down last Wednesday. Both sides blamed each other for delaying the process. On November 28, over 55,000 Canada Post workers continued their strike across the country, with strikers rallying outside the company’s headquarters in Ottawa.

One of the key issues in the negotiations is the push to extend parcel delivery times to include weekends. However, there are disagreements between the union and Canada Post on how to implement this. Both sides have adjusted their demands, hoping the mediator can restart talks.

The impasse is severely impacting mail and parcel fulfillment across North America. Last Friday, the United States Postal Service (USPS) announced the suspension of services to Canada. This service disruption affects multiple mail and parcel categories, including Priority Mail Express International, First-Class Mail International, and various other international shipping services.

Canada Post has also warned that, in addition to the current delays, it may take a significant amount of time to restore normal processing and delivery after the strike ends. Since the start of the strike, Canada Post has accumulated a backlog of 11 million parcels.

The strike has nearly paralyzed Canada Post’s logistics services, with many parcels unable to be delivered as scheduled. This means that order processing times will be significantly extended, and there is a risk of failing to meet delivery deadlines. The Canadian Chamber of Commerce has stated that this strike is another blow to the supply chain, especially for Canadian businesses and small enterprises engaged in e-commerce, which heavily rely on the holiday season for business.

Currently, more than three-quarters of Canadian small businesses depend on Canada Post for key logistics deliveries. During the holiday shopping season, many businesses earn up to 40% of their sales during this period. Shopify VP Alexandra Clark warned that if the strike lasts until Black Friday, it could have a devastating impact on 67,000 small merchants, especially those relying on online business.

2. The North American E-commerce Delivery Market is Undergoing a Transformation

As the Canada Post strike continues and enters its third week, the situation is becoming more critical with the breakdown of negotiations, the growing backlog of parcels, and the approaching shopping peak season. Many cross-border e-commerce businesses hoping to ship parcels before the strike ends are turning to other logistics channels, seeking better alternatives.

For a long time, the North American logistics market has been dominated by four major companies: UPS, FedEx, DHL, and USPS. Many businesses focus on these commercial express companies. However, with the growth of e-commerce, consumer demands for faster delivery times and better service quality are placing new challenges on traditional logistics models.

For example, the shipping costs of UPS, FedEx, and DHL may vary and are often more expensive than Canada Post’s fees. These traditional express companies also charge additional fees for residential deliveries, which does not align with the needs of the e-commerce industry. Most consumers expect their purchased goods to be delivered directly to their homes.

Additionally, traditional express companies are not flexible enough with their delivery times, typically only delivering on weekdays, with weekends entirely off. During peak seasons with explosive order growth, these companies often lack the flexibility to meet the demand.

Traditional express networks are more suited for B2B logistics, while postal networks primarily serve B2C delivery needs. Given the global expansion of e-commerce, the North American delivery market urgently requires a logistics network that is better suited to e-commerce, one that can quickly respond to e-commerce orders, provide enough capacity flexibility to handle seasonal order fluctuations, and restructure traditional express models to achieve more cost-effective operations.

For instance, companies like Canada-based JiaPost International, which focuses on cross-border logistics between China and Canada, are increasingly expanding their logistics network. JiaPost has been emphasizing "more stable and faster" delivery experiences, gradually increasing its airlift capacity for China-Canada routes. In 2020, JiaPost launched its first chartered freighter flight. By 2022, they had operated over 1,000 flights with a total annual capacity exceeding 20,000 tons. In March 2023, JiaPost signed a strategic cooperation agreement with Southern Airlines Logistics, launching the Boeing 777 freighter with 3+1 weekly flights and nearly 400 tons of capacity, setting a new record for China-Canada direct freighter flights. In May 2024, JiaPost also partnered with the first YVR freighter route for deep cooperation, marking China’s first full-freighter route from Hangzhou to Vancouver, Canada.

With a focus on e-commerce clients, JiaPost has built a comprehensive supply chain service system. In 2019, they partnered with express service provider UniUni to develop a last-mile delivery network, covering over 70% of Canada. UniUni uses a crowdsourced model similar to Uber, relying on a large team of part-time drivers to provide efficient delivery services. This model not only reduces costs but also increases service flexibility. Through continued investment in automation and digitalization, they have created a competitive advantage for the company.

On the one hand, UniUni’s crowdsourced logistics model has quickly established a dense delivery network across regions, leveraging large amounts of data to build a robust SOP and data system. The integration of robot sorting technologies into their sorting centers has been deployed in key regions across North America, leading to rapid growth in daily parcel volumes.

On the other hand, UniUni has developed proprietary delivery path algorithms and an innovative door-opening technology for e-commerce deliveries, providing solutions for correcting order entry errors in over 5 million North American e-commerce customer addresses. These innovations have significantly improved delivery success rates. According to UniUni co-founder and Canada president Wang Junyao, these technologies have increased delivery efficiency by 30% to 50%.

Since its establishment, UniUni has frequently attracted capital investment. Over the past year, the company completed four rounds of financing from top venture capital firms in the U.S., Canada, and China, including Bessemer Venture Partners (BVP), DCM, Celtic Asia, BlueRun Ventures, Yuanjing Capital, and Fosun, raising over $100 million and tripling its valuation.

In November, UniUni completed a $30 million Series C2 financing, oversubscribed, led by Bessemer Venture Partners, with follow-up investments from Celtic Ventures, LFX Venture Partners, Joy Capital, and BlueRun Ventures.

JiaPost has also formed strategic partnerships with Canada Post, FedEx, UPS, and Purolator. Their flexible product mix, such as UniUni + express delivery, covers postal code delivery areas affected by the Canada Post strike, effectively alleviating the backlog of parcels caused by the strike.

JiaPost can provide customers with a one-stop service, including parcel collection, warehousing, customs clearance, cross-border transport, delivery, and e-commerce after-sales support, ensuring the safe transportation of goods.

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Official WeChat Account: Cross-Border E-commerce Logistics Baixiaosheng