Canadian Occupational Projection System (COPS)

NAICS 4911, 4921-4922, 4931

This industry comprises establishments primarily engaged in operating postal services; providing courier and delivery services; and operating general merchandise, refrigerated and other warehousing and storage facilities. Couriers and messengers are the largest of the three segments, accounting for 38% of production and 47% of employment in 2021. In comparison, warehousing and storage accounted for 36% of production and 23% of employment, versus 27% and 30% respectively for postal services. Overall, the industry employed 245,300 workers in 2021, mostly concentrated in Ontario (42%), Quebec (21%), British Columbia (14%) and Alberta (12%), with a workforce primarily composed of men (70%). Key occupations (4-digit NOC) include:

• Letter carriers (1512)
• Delivery and courier service drivers (7514)
• Material handlers (7452)
• Mail, postal and related workers (1511)
• Shippers and receivers (1521)
• Couriers, messengers, door-to-door distributors (1513)
• Supervisors, mail and message distribution occupations (NOC 1214)
• Supervisors, supply chain, tracking and scheduling co-ordination occupations (1215)
• Postal and courier services managers (0132)

Over the past ten years, real GDP in the industry showed two distinct trends. The output was on a downward trajectory until 2016, primarily reflecting the growing use of e-mail, electronic billing, online advertising, and direct deposit services by households, businesses and governments, which displaced large portions of the traditional mail market. The output begun to straighten around 2017 and continued to expand at a solid pace in subsequent years, driven by a large increase in warehousing and storage activity and a significant recovery in postal, courier and delivery services. This situation reflected rising demand for warehousing services and parcel delivery resulting from the growing adoption of e-commerce by households and businesses. Canada Post, the largest company in the industry, responded to these trends by shifting their focus from letter mail to parcel delivery, while big players like Amazon opened many new warehouses and fulfillment centers in the country.

In contrast with many other industries, growth in output accelerated during the pandemic years of 2020-2021, as online shopping and demand for door-to-door deliveries surged in response to public health restrictions, such as the proscription of in-person shopping for non-essential items. This led to a jump in courier and messenger’s output and additional growth in the other two segments of the industry. The resulting pace of growth in real GDP averaged 1.5% annually for the entire period 2012-2021. After stagnating from 2012 to 2016, employment increased markedly from 2017 to 2021 in response to renewed growth in output, resulting in job creation averaging a strong 3.2% per year over the past decade. Despite attempts to reduce per-piece processing costs and restructure delivery routes, productivity in the industry declined at an annual average pace of 1.7%, with a large part of the decline occurring in recent years, primarily reflecting the fact that parcel delivery is a more labour-intensive line of business than mail delivery.

Renewed growth observed in the industry’s output in the past several years is expected to persist over the projection period, as retail transactions continue to move online and feed demand for parcel delivery and warehousing services. However, the pace of growth in real GDP is projected to slow significantly relative to the past decade, as much of the growth that was expected to occur gradually over the forecast horizon took place during the pandemic. In fact, the output is expected to contract marginally in the short term, in line with lower activity in retail trade, as consumer spending moves away from goods in response to the significant amount of pent-up demand accumulated for some services during the pandemic. In the longer term, the weaker pace of growth projected in disposable income in Canada (resulting from the gradual slowdown anticipated in employment growth and massive retirements of baby-boomers) is also expected to restrain growth in consumer spending and retail trade, limiting growth opportunities in the industry. Nevertheless, as the traditional mail market continues to decline, postal and courier services firms will face increasing pressures to make parcel delivery their key business line. This trend will be amplified by the fact that direct marketing, such as promotional brochures and catalog distribution, will simply not be able to compete with online marketing, which is more environmentally friendly and enables businesses to better personalize offers to customers by building a profile of their purchasing history and preferences. That said, the industry will benefit from the fact that retailers are increasingly relying on warehousing services, rather than store space, to decrease their turnaround time and deliver their products as fast as possible.

On average, real GDP in postal, courier and warehousing services is projected to increase by 0.9% annually over the period 2022-2031. The weaker pace of growth in output relative to the previous decade is expected to result in slower growth in employment, with gains averaging 1.8% per year. Productivity is expected to keep declining, albeit at a more moderate pace than in the past, with declines averaging 0.9% annually. As a result, employment growth will continue to be the sole contributor to output growth over the projection period. Further declines in productivity can be explained by the fact that the highly labour-intensive segments of postal and courier services require travel through increasingly congested traffic and rural areas. The productivity outlook is better for warehousing and storage, alleviating some of the weakness in delivery services. Advanced robotics, self-driving shelving carts, body sensors and artificial intelligence-powered management systems are examples of technologies expected to increase productivity in warehousing. Delivery firms also face threats from large e-commerce companies developing their own parcel delivery capabilities. For example, Amazon is currently experimenting the use of drones to deliver parcels to the customer’s door and Canada Post is also looking at the potential benefits from this technology. However, if the use of drones become a reality, it is unlikely to occur until the latter part of the projection period due to huge logistical and regulatory challenges.

Real GDP and Employment Growth Rates in Postal, Courier, Warehousing and Storage Services

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.

Sources: Statistics Canada (historical) and ESDC 2022 COPS industrial projections.