While Canada Post remains on the job, it is important to remember the potential of a strike or lockout is not over. A cooling off period was suggested and seems to be in play, however all of the terms of that proposal were not agreed to and in our view the situation remains fluid. From what we see, a strike could occur after a 72 hour notice which would catch lots of mail en route.
While some companies have moved to electronic based payment systems, many members still rely on the mail service to deliver/receive payment. When payment is not received by the seller credit limits are reached and shipments slow. This is particularly true in cross border trade where currencies make Electronic Funds Transfers (EFT’s and ACH’s) more involved.
Should Canada Post shut down for any amount of time, we urge you to have a plan in place to ensure business continues uninterrupted. Options would include:
- Wire Transfers: Always an option but require firms to exchange bank information and while it can be more costly it is usually based on a flat rate and not a percentage of the amounts being transferred. Also, it may require a trip to the bank if you do not have online business banking.
- Electronic Transfers: These work well if you and your trading partner are in the same country. For cross border trade you can work with your bank to set up a “virtual account” in the other country. This may be a good option for you if you are going to use this method of payment regularly, but may not be efficient if you are only looking for a safeguard against a postal interruption.
- We anticipate the most common solution will be issuing cheques and using a courier service to deliver them. As there is usually no reason to use the expedited “overnight” courier option, “ground” fees will often be less than wire transfer fees and your accounting staff will process payments per normal.
Contrary to what some may believe, a postal strike is not an “Act of God” and therefore not a reason for payments and other important documents not to arrive on time. It may not be your fault, but it can quickly become your problem.
by Fred C. Webber, President & CEO