Part I of a series
EDITOR’S NOTE:Manitoulin Island businesses and consumers have often raised concerns over the relatively high cost of shipping goods to the Island, especially when compared to farther distances on mainland routes. The Expositor will use this series to better understand why this is the case and what can be done to manage the situation.
MANITOULIN – Businesses based on Manitoulin Island and others who ship their products to Island locations have to face a barrier that exists to a higher degree in this area than most surrounding parts of Ontario—shipping costs.
“People want to shop local and always come in and say, ‘I can get this cheaper elsewhere.’ We try to compete with those prices the best we can, but where we’re located and because of our smaller store, it’s harder,” said Sara McDonald, sales manager at Redbow Floor and Wall Fashions in Little Current.
Ms. McDonald has been working at the store since 2011 and has seen “pretty steady increases” in shipping costs ever year.
“I don’t want to bash the shipping companies because I can understand why it’s gone up, but I think it’s important to get it out there that we as a business can’t compete with Sudbury, and Espanola even.”
For major Canadian carriers such as Purolator, FedEx and TransForce International (the parent company that owns many courier services such as Canpar and Muskoka Delivery Service), Manitoulin Island addresses are considered remote destinations, likely due to the Island’s nature being that of a dead end as opposed to along a major trans-Canada route.
FedEx considers all postal codes on Manitoulin Island within its ‘Fedex Ground® Remote Rural Surcharge’ for domestic packages, as well as being subject to out-of-delivery-area and out-of-pickup-area surcharges for international packages.
The domestic package surcharge for the P0P forward sorting address (the first half of a postal code) is $12.50. This also applies to the communities along Highway 17 that share the P0P prefix such as Cutler and McKerrow.
In Espanola, however, the remote rural surcharge is still $6 despite its relatively high population and close proximity to Highway 17.
“While I cannot get into details regarding our pricing strategy, like any business, we make pricing decisions based on economic conditions, market conditions and the value of the service we provide,” said FedEx Express Canada communications specialist James Anderson in a statement to The Expositor.
The owner of a Sudbury-based company that ships its products across Canada, including Manitoulin Island, said they noticed shipping prices jumping much higher in the recent past than ever before. They wished to remain anonymous due to possible implications on their company’s shipping services.
“I see it as a trend in places, especially the places we send to that are fairly remote like northern Newfoundland or BC, the prices for shipping have gotten to be whacky. In 2018 especially, we had to discontinue working with some places because of what we’d have to pay for shipping,” they said.
The business owner expressed their frustration that, despite Purolator and FedEx having shipping depots on Kelly Lake Road in the southwest area of Sudbury, it is significantly less expensive to ship goods hundreds of kilometres farther than Manitoulin (which is less than 120 kilometres from these depots) than it is to get those same items to the Island.
In a comparison of shipping costs from Sudbury to various points in Ontario conducted this past summer, shipping prices to Little Current were close to $40 through FedEx and $27 through Purolator. On FedEx, those goods could reach St. Thomas for half the cost. Through Purolator, a shipment to St. Thomas would be roughly $10 less expensive than Little Current.
In one price quote obtained by The Expositor, the ‘beyond destination’ charge from Purolator on a hypothetical Little Current shipment amounted to an additional 30 percent of the regular shipping fee.
The Expositor asked Purolator spokesperson Courtney Reistetter about why Manitoulin Island faces higher shipping charges than other area destinations.
“Manitoulin Island covers many municipalities, and specific transit times and rates are dynamic based on origin/destination of shipment postal codes,” stated Ms. Reistetter in an email. “In some cases of our services, an additional charge will be applied when the origin or destination point is deemed by Purolator to be remote or is not serviced directly by Purolator.”
The number of kilometres between stops is the factor Purolator uses to determine whether beyond charges apply.
The Sudbury business owner lamented the loss and mergers of businesses with a more localized focus such as Muskoka Delivery Service, which has since been absorbed into Canpar. The business owner said prices increased considerably across all companies since that merger took place.
TransForce International spokesperson Rick Leckner declined to comment on Manitoulin Island shipping rates.
Delray McCarthy of Eenvoudig Simply Unique, based in Mindemoya, has been using Canada Post to ship her lightweight products that she sells in her online store.
“As a seller who has a store on the Island and online, it is very frustrating that we don’t have access to other means of shipping services,” she said. “I receive supplies from all over the world and the biggest hurdle is extreme shipping charges. The more expensive it is to bring something here, the more expensive the product becomes. Which has a totally negative impact for business.”
Although shipping costs to Manitoulin Island are quite high, they are still more economical for most individual businesses than asking an employee to make a trip to Sudbury and back. The costs of fuel, vehicle maintenance and staffing add up in a hurry. Commercial shipping companies also face higher costs in carrying out their operations, which may lead them to pass along the increased costs to their clients in varying degrees.
Island businesses and smaller delivery companies have explored their own strategies to help lower their shipping costs, some of which will be detailed in a future edition of The Expositor.