Canada Post parcel volumes decline 17.2% in Q1

Canada Post parcel volumes fell more than 17% during the first quarter, contributing to a US$147. 5 million pre-tax loss.

The news came days before letter carriers on Monday ratified a new contract following more than two-and-a-half years of chaotic and painful negotiations that further undermined user confidence in the public postal service, resulting in lower revenue.

The Canadian Union of Postal Workers announced Monday that its urban and rural bargaining units had approved tentative contracts initially agreed to in December, with about 87. % of the more than 50,000 membership voting in favor. The contract, which is retroactive to last year, will remain in place until Jan. 31, 2029.

“We are pleased that CUPW-represented employees have voted to ratify these new collective agreements.

With the stability of new agreements in place, we look forward to working with our employees and bargaining agents to rebuild the business, restore confidence in the postal system and better serve the country,” said Canada Post CEO Doug Ettinger in a statement.

The new collective bargaining agreement ends a protracted labor dispute that included two strikes and other work slowdowns, and major disagreements over how to restructure the financially troubled national post.

In March, the Canadian government approved sweeping changes sought by Canada Post, including ending door-to-door delivery for 4 million addresses and converting to community mailboxes, closing post offices, and reducing service standards.

Management will now heavily focus on growing package delivery, which has performed better than lettermail, with the goal of ending the need for taxpayer bailouts. One of the short-term goals is to convert about 136,000 addresses to community mailboxes in late 2026 and early 2027. Businesses heralded the arrival of labor peace.

“After years of strikes and uncertainty, it is good that Canada Post will have some labor market certainty in the months ahead.

Many small firms still depend on Canada Post as a low-cost way to send marketing material, move money between businesses and send packages to consumers in every community across the country,” the Canadian Federation of Independent Businesses said in a statement. The trade group has endorsed the planned reforms.

Financial struggles continue Revenue and volume declines hit all business lines. The corporation’s $147. 5 million loss was more than four times greater than the $29. 5 million loss in the first quarter of 2025. Revenue fell 14. 3% year over year. The operating loss increased 147% to $196. 4 million. Canada Post had a pre-tax loss of $1.

15 billion in 2025 and has lost $4. 5 billion since 2018. With the tentative contract still not finalized, shippers continued to divert parcel shipments to alternative carriers as a hedge against potential service delays. Parcel revenue fell 17% to $380. 5 million on a 17. 2% drop in volume.

Regular mail and direct marketing mail revenue and volume also fell by double digit amounts. Revenue loss was partly offset by a 6. 9% reduction in operating cost, partly due to a decline in outbound parcel volume that resulted in lower fees paid to foreign postal administrations for delivering mail and parcels.

Parcel volume will be slow to win back, reinforcing the need to overhaul the business plan in the competitive market, Canada Post said. The national post will prepare this year to expand to weekend delivery, improve e-commerce parcel return services, enhance local next-day delivery, modernize its pricing strategy and improve small business services.

Canada Post will likely have to offer discounts to businesses to attract shippers, which will hurt margins, one observer said online. Letter mail volumes are expected to continue to erode as consumers and mailers continue to migrate to digital channels.

Canada Post is pushing the legislature for more freedom to raise postal rates, which lag those in other countries. Canada Post’s express delivery subsidiary, Purolator, recorded a pre-tax profit of $16. 5 million, up from $13. 6 million in the prior year. Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

RECOMMENDED READING: Canada Post, letter carriers hammer out details on final contract Canada Post pre-tax loss nearly doubles to $1. 1 billion The post Canada Post parcel volumes decline 17. 2% in Q1 appeared first on FreightWaves.