FYI: Canadian Postal Rates
Why does it cost so much to ship from Canada?
Since everything I make is shipped from my location here in Canada to various parts of the globe, it has come to my attention that Canada Post's rates of service are ridiculously high compared to typical American rates. Here's an analysis and a bit of a rant:
Note: This article was originally written February of 2009. I have updated it for May 2011. Quite a bit has changed on both sides since then, including pricing and services available. Canada has lowered some of their pricing and the USA has raised some of theirs (I'm thinking as a result of dollar value changes over the last few years), but there is still a massive difference.
First, it is important to note that from what I have been able to find out, both Canada Post and the US postal service do NOT receive government money to fund their operations, despite the fact that they are owned/run by their respective federal governmnents. We all know that governments do a really crappy job of running things and cost the taxpayer insane amounts of money, but in this case, unlike most government operations, the postal services are supposedly self sustaining, although the US postal service is reportedly in heavy debt as I write this. Canada post turns a tidy profit. More on that later.
However, what puzzles the heck out of me is the incredible gap in costs to ship stuff overseas (where many of my customers and would-be customers are) FROM Canada versus shipping FROM the USA using the postal services. Here in Canada we pay many times the price to ship overseas than Americans do.
Try it yourself. You can prove this from anywhere in the world. Make up a package, say, something that measures about 15" square and weighs 5 pounds. Go the the Canada Post web site (http://www.canadapost.ca/cpotools/apps/far/personal/findARate?execution=e1s1) and find a rate to send that package to Australia. Find out the price. Now go to the US postal web site (http://www.usps.com/tools/calculatepostage/welcome.htm?from=home_header&page=calculatepostage) and do the same thing. The difference is shocking! Here are the figures for the above example if you don't want to do the work yourself. These rates were calculated in February 2011. All examples below use the same package and originating location from Postal Code R7B 0H1, central Canada, to be fair.
USPS from post office rate: Priority Mail International 6-10 day delivery time costs $48.15 sent from anywhere in the USA to Australia.
Canada Post rate for the same package to Australia as well: $208.91 for 8 day service!
Let's see, that same package from central Canada to:
UK: surface (takes up to two months) $100
UK: 5 day air: $194.94
US Postal Service charges about $42.to the UK for our 5 pound, 15" square package.
Japan is slightly higher at $110.56 for surface and $207.87 for 7 day service from Canada. The US postal service charges just under $45. Again, 6-10 days.
How much to send that 15" sq. 5 lb pound package to locations in the USA from here in Canada? Let's try Texas, a state that is about as far away from Canada as you can get.....
6 to 7 business days is $50.87 mailed from Central Canada.
What about North Dakota, which is bordered only about sixty miles or so south of the Canadian postal code I used for the "from" destination... my previous Central Canadian home town of Brandon, MB...
It's $37.13 for one week service.
Waitasec.... What was that again? Canada post charges only about $5 less to send a package only 60 miles south than the USA postal service does (approx. same time frame, 6-10 day service) to send the same package from the USA to the UK, which is all the way across the Atlantic!!
Read that again and let it sink in! Is that not outrageous?
Here's an actual scenario I was just confronted with last week as I write this in late May 2011. I built a model for a UK customer and packed it in a box measuring: 106 x 26 x 15.5 cm or 41.5" x 10.5" x 6" Weight: 2.90 Kg or 6.5 LBS
B6L 5G6 (my postal code in Nova Scotia) to U.K. via Canada
Going via the USA, first shipping it to a friend in the US who would then ship it overseas. Takes a bit longer but costs less.
Parcel to USA (5 day) B6L 5G6 Canada to New York: $40.49
Total about $88.00 going via the USA. That means it costs less to mail it to the USA and then have it continue to the overseas destination from there than mailing it directly to the UK. WTF?????
Look, I could sit here and play this all day but I think by now you get the point!
Canucks in the Mail Order business are getting seriously hosed by our own country's government run postal system! We just can't afford to ship stuff overseas in many cases! Most people who want to buy some of my products can't afford the insane rates Canada Post charges!
By the way, in the USA, the postal service continues to deliver even on Saturdays. Canada post delivers only Monday through Friday.
So, will someone (without a bias) please tell me why Canada Post charges so much compared to the US postal system? Hmmm?
Here are some answers I will likely get but I can discount them too. So don't bother using them:
Some will say, "Well, the USA has ten times the population so there's more of a market to absorb the costs".
That's not a valid point. You'd also have to have ten times the infrastructure to serve that larger population. Also, it doesn't explain the massive differences when shipping from Canada to OUTSIDE Canada, like to the UK or Australia!
"Well, Canada is a bigger country!"
I can blow that one out of the water too. Canada's not THAT much bigger. Besides, the example above shows that to mail something HALFWAY across Canada is more expensive than mailing it ALL THE WAY across the USA. So that one is moot. Again, it doesn't explain the massive differences when shipping from Canada to overseas!
"Well, Canada doesn't have the population density!"
About 90% of Canada's population live within a strip only about 100 miles wide along the US border. Population density in Canada and the USA is therefore roughly the same overall. Most of Canada to the north is uninhabited wilderness and worthless tundra. The USA's population is spread relatively evenly across the entire country, east to west, north to south as most of the land mass there is more habitable. That also means the US postal service has to cover a much greater land mass, relatively speaking. There's that larger infrastructure thing once more.
Now, I have no problems with anyone making a large profit. Business needs to make a profit to stay in business. However....
Canada post finished 2005 with 200 million dollars in profits. In 2007, according to their own union's web site, Canada post also:
They still continue to raise the rates. (BTW, Note that tax amount! They paid twice the amount in taxes than they made in profits!)
So, I ask again: Why does Canada Post charge three to ten times the rate for postal service than the US postal service?
I won't hold my breath for the answer.