How Amazon threatens Canada’s post office

Amazon touches so many industries it’s pointless to name them. Whenever it enters a new sector, and especially when it brings along a new labor model with lower wages and no unions (or at least less union power), it inevitably forces traditional companies in that sector to respond, lest they become uncompetitive and start seeing their market share erode. Often, that discussion is about private companies, but it can also afflict public institutions.

For a long time, Amazon was deeply reliant on Canada Post, a public institution, to deliver packages across the vastness of the country. It hasn’t completely abandoned the post office, but as it’s built out its own delivery network — one that makes use of non-union labor, if not precarious gig workers, the post office is facing yet another challenge to its attempts to remake itself as letter mail volumes continue to decline.

Amazon isn’t the only challenge facing Canada Post. It’s shackled by successive governments that don’t want to think about what a sustainable public post office looks like in the twenty-first century, but also by management that continues to make poor decisions for the institution and refuses to fight for a more expansive mandate. The post office has almost 5,900 offices across Canada — a unique infrastructure that reaches into every community and could be a perfect delivery mechanism for new services to improve Canadians’ lives.

If Amazon is able to transform delivery and fulfillment work into low-wage, non-union employment, it will not only be a bad development for workers, but will make it even more challenging for Canada Post to continue delivering an essential service without a public subsidy or trying to fight its own unionized workforce.

I wrote about all this in more detail for Canadian Dimension. They’ve allowed me to share the piece with Disconnect readers. I wonder if other countries’ post offices are facing a similar challenge from Amazon’s growing footprint.

If you’ve heard anything about Canada Post recently, it’s probably that it’s losing money. A lot of money. And there’s little sign that the hemorrhage will stop anytime soon.

Last year, the Crown corporation reported an annual loss of $748 million and warned it could run out of operating capital by early 2025, unless it came up with new borrowing or refinancing options. Canada Post’s operations aren’t actually subsidized by the federal government. It’s expected to serve every single address in the country and still break even, with limits on the prices it can charge and the services it can offer.

With the ascension of electronic communication, letter mail volumes have plunged, meaning there’s less revenue coming from Canada Post’s original vocation. It delivers packages too, but there it faces competition not just from traditional parcel-delivery services, but also from an even lower wage model pioneered by Amazon.

Canada Post has begun selling off parts of its business to try to close the gap, leading long-time critics of the post office like Carleton University business professor Ian Lee to declare it’s “disappearing before our eyes.” In recent years, Lee has been advancing a radical proposal to gut the number of post offices serving rural communities, slash the workforce by two-thirds, and significantly pull back on the delivery network. It’s not just a plan to cut costs, but to force the public service to become just another business in the marketplace.

That whole discussion of the question is deliberately circumscribed. There is an unwillingness to entertain a future in which Canada Post’s role can continuously evolve to serve the needs of Canadians. And the degradation of delivery work by Amazon is accepted as a fait accompli, instead of something we can reverse if the government is prepared to defend workers’ rights against a company whose business model is geared towards undermining them.

The workers’ response

The narrative we hear about Canada Post is one fashioned by the organization’s management and people like Lee who are biased against the notion that a public post office can survive and thrive into the 21st century. Media reporting echoes it uncritically, suggesting to the public that Canada Post is doomed and that there are few options for digging itself out of the hole it’s in, apart from heeding the calls for privatization and dismantling. But that’s not the way it has to be.

For several years now, the Canadian Union of Postal Workers (CUPW) has been promoting a much more hopeful vision for this institution that every single Canadian depends on. The Delivering Community Power plan envisions a future where Canada Post expands to offer banking services, provide check-ins for the elderly, and plays an even more essential role in the sustainable communities of the future. Unlike Lee’s project of closing post offices across the country, it’s a plan that recognizes the crucial role the institution plays and seeks to ensure it can continue providing essential services to Canadians even as their reliance on letter mail declines. But there are roadblocks to realizing that vision.

Expanding the post office is going to require funds, a tall order given how much money Canada Post is currently losing. Yet CUPW disputes the narrative embraced by corporate management and those that want to see the end of the post office as we know it. According to the union, Canada Post has seen its non-labour spending jump by over 56 percent between 2017 and 2023, which includes a five-year plan to spend $4 billion on infrastructure upgrades for a surge in parcel growth that hasn’t materialized. It maintains that those spending decisions go a long way to explaining the losses Canada Post is experiencing. Further, parcel volume has not actually fallen, rather the total market for package delivery has expanded and Canada Post hasn’t maintained its share of that growth, in part because management told Amazon it couldn’t keep up with its demands in 2022, driving away a major customer.

CUPW’s story paints a different picture of the troubles facing Canada Post. It’s not so much a business in terminal decline, but one with bad management that has been making poor decisions about the future of a public institution. The limited vision of management paired with the government’s lack of interest in reimagining Canada Post’s future is part of what has put it in this bind. Postal banking would bring in ample revenue that could help fund the delivery business, but the government would not just have to give the Crown corporation permission to expand its mandate; it would likely also have to invest in the infrastructure necessary to deliver it. And neither the Liberals nor the Conservatives have any interest in spending that money—and angering the big banks in the process.

But there’s one other threat facing Canada Post that may be far more existential than many people recognize. Amazon is not just a customer of Canada Post, relying on it to reach the destinations out of range of its own delivery network; it’s also a major competitor whose business model rests on cheaper pricing made possible in part by aggressive attacks on the power of workers. Unless that’s addressed, it will be hard for Canada Post’s unionized workforce to compete.

The threat of Amazon

There’s no denying Amazon has changed the way many people shop in the past few decades and played a significant role in swelling the number of parcels most people receive in the average year. It’s commonly seen as a successful e-commerce platform that has used its dominant position to expand into many other lines of business, like video streaming and health care. But that success is also dependent on vigorously opposing unions and suppressing the wages of its workers.

If you think of how a package gets from Amazon to a customer, it needs to pass through a warehouse and then sit in the truck of a delivery driver before getting to their door. Over time, Amazon has moved into those areas—and tried to transform how they work. Logistics is a traditionally unionized industry where workers tend to command good salaries, but that’s not the case with the Amazon model. The e-commerce giant fiercely combats any attempt by workers to form unions at its fulfillment centres because it has been trying to reframe warehouse work as non-skilled labour for which workers should expect little more than minimum wage—and far less than at unionized facilities.

Amazon’s been doing something similar in the delivery field. Unlike with its warehouses, Amazon doesn’t hire its own delivery drivers. Instead, it either uses independent contractors or “gig” workers through its Amazon Flex platform, or it contracts the service out to delivery service partners like Intelcom, who hire the workers themselves. In this model, Amazon can set aggressive delivery targets that force the workers into a stressful and precarious existence. It’s no wonder Amazon’s warehouse and delivery workers suffer high rates of injury.

Now consider the broader consequences of that. As Amazon’s warehousing and delivery models expand, they place pressure on competitors to follow suit: to speed up the pace of work, to adopt new forms of surveillance and algorithmic management, and to restrict worker pay, if not to attack their unions altogether. When Lee talks about the need to make Canada Post delivery more competitive with Amazon or FedEx, whose workers are also non-union, it’s pretty clear what he’s suggesting: not just mass layoffs, but an attack on the postal workers’ union too.

That leaves us with an important question to consider. Not just what we want the future of Canada Post to be, but also what kind of society we want to live in. We should want to take advantage of the post office’s unique, nationwide infrastructure to provide more and better services to Canadians instead of dismantling something that we may never be able to rebuild. But even more than, the government should see Amazon’s low-wage, non-union model as a threat not just to Canada Post, but to Canadian workers across the board, and intervene to rein it in.