Canada Post, the Canadian national postal service, is undergoing one of the largest transformations in its history. The Canadian government has authorized the conversion of approximately 4 million addresses still served through door-to-door delivery into centralized systems based on community mailboxes.
Behind this decision lies a challenge affecting the entire logistics sector: home delivery is becoming increasingly expensive and difficult to sustain at scale.
However, the Canada Post case is particularly interesting because it shows what can happen when an operator reacts too late to the evolution of its distribution network. In recent years, a large share of parcel volumes has shifted toward more flexible operators and logistics models alternative to traditional door-to-door delivery.
For European eCommerce businesses and logistics operators, the message is clear: Out-Of-Home delivery is no longer just an additional service, but a strategic lever to optimize the last mile, improve operational efficiency, and reduce delivery costs.
In this article, we analyze what is happening in Canada, which data points are driving the market toward Lockers and Pick-Up Points, and why the Canada Post case represents an important signal for all operators looking to build a more sustainable, efficient, and competitive delivery strategy.
The data: home delivery costs 75% more
The discussion around Out-Of-Home delivery is often approached as a matter of customer experience or consumer preference. In reality, the core issue is economic.
According to the Industrial Inquiry Commission report commissioned by the Canadian government, the average annual cost of door-to-door delivery is 284 Canadian dollars per address, compared to 162 dollars for community mailboxes. In other words, the home delivery model costs approximately 75% more than the Out-Of-Home delivery model.
The same report also highlights that around 40% of delivery costs were associated with serving less than 25% of Canadian addresses. In practical terms, the door-to-door model loses efficiency in low-density areas or routes with higher logistical complexity.
The problem, however, is not limited to Canada. Every year, the number of delivery points increases, while costs related to fuel, urbanization, traffic congestion, and labor availability continue to rise. In this context, home delivery is progressively becoming more expensive and less scalable.
The Canada Post case: when rising costs meet collapsing volumes
Another key aspect of the Canada Post case concerns the loss of market share in the parcel segment.
According to data published by Canada Post itself, the operator handled 62% of the Canadian parcel market in 2019. By 2024, that share had fallen to 24%. Meanwhile, traditional mail volumes have also collapsed: while twenty years ago the Canadian government, through Canada Post, delivered approximately 5.5 billion letters per year, volumes have now dropped to around 2 billion.
The result is a business model that is becoming increasingly difficult to sustain, with lower high-margin volumes, more addresses to serve, and rising fixed costs. All of this is happening in a market where private operators have increasingly started selecting the most profitable routes, leaving Canada Post with the least efficient and most expensive areas to manage.
But perhaps the most interesting aspect is another one: eCommerce volumes did not simply disappear — they shifted toward operators and logistics models that are more economically and operationally efficient. In other words, while the parcel market continued to grow, Canada Post progressively lost competitiveness.
Canada Post’s response to the crisis: 4 million addresses moving toward centralized delivery
To address the structural crisis of the model, the Canadian government authorized Canada Post to resume and accelerate the conversion of door-to-door addresses to community mailboxes, with the goal of converting approximately 4 million addresses over five years and achieving estimated savings of nearly 400 million Canadian dollars per year.
Canada Post also announced an initial operational phase involving approximately 136,000 addresses across 13 communities.
However, one strategic point must be emphasized: community mailboxes primarily respond to the needs of traditional mail. eCommerce, on the other hand, requires different infrastructures designed to manage parcels, returns, and omnichannel flows. This is where PUDO networks and Lockers come into play.
Why Out-Of-Home delivery is becoming central to eCommerce
Today, the Out-Of-Home model is no longer just an alternative to home delivery — it is becoming a true logistics infrastructure for modern eCommerce.
Lockers and PUDO points (Pick-Up Drop-Off points) make it possible to consolidate multiple deliveries into a single logistics node, reducing traveled miles, failed delivery attempts, and operational costs.
For logistics operators, this means increasing delivery density, optimizing routes, reducing last-mile costs, and improving returns management.
For eCommerce businesses, it means offering greater flexibility to customers, especially in highly congested urban areas or in contexts where consumers are unavailable to receive parcels at home during the day.
It is no coincidence that many of the most advanced eCommerce markets have been investing in Out-Of-Home delivery for years. This is the case, for example, in Poland, Finland, and Estonia, which have developed highly widespread Locker networks, effectively turning out-of-home delivery into an operational standard.
Ultimately, the real issue is no longer choosing between home delivery and Out-Of-Home delivery, but rather building a sustainable and economically efficient delivery mix.
The role of technology: how to integrate Out-Of-Home networks in a simple and scalable way
For eCommerce businesses, carriers, and logistics operators, one of the main barriers to adopting Out-Of-Home delivery is often technological complexity. Integrating different networks, managing pick-up point maps, synchronizing availability, and orchestrating delivery flows all require robust and interoperable software infrastructures.
In this context, GEL Proximity provides a technology platform that enables access to more than 500,000 Pick-Up Points and Lockers through a single integration, allowing merchants, carriers, and logistics operators to rapidly integrate Out-Of-Home services into eCommerce checkouts, offer deliveries and returns across multi-operator networks, expand territorial coverage, and ultimately optimize both customer experience and logistics costs.
Would you like to immediately integrate Out-Of-Home deliveries and returns into your eCommerce platform or logistics systems?
Discover how we can help, or contact us for more information.
The future of delivery is hybrid
The Canada Post case clearly demonstrates a reality that the logistics sector is already experiencing: a model based exclusively on home delivery is becoming increasingly difficult to sustain economically.
The lesson is simple: continuing to base a distribution model almost entirely on home delivery is both risky and expensive, because every new address increases operational complexity — more kilometers traveled, more time per delivery, higher probabilities of failed delivery attempts, and greater pressure on last-mile costs.
By contrast, Out-Of-Home networks allow flows to be consolidated into centralized logistics nodes (PUDO points and Lockers), increasing delivery density and reducing operational inefficiencies. It is precisely this ability to optimize the last mile that is driving more and more operators to invest in delivery models alternative to traditional door-to-door systems.
Clearly, Out-Of-Home delivery will not completely replace home delivery, but today it undoubtedly represents a strategic complement.
For eCommerce businesses and logistics operators, the real competitive advantage will therefore lie in building more flexible, efficient, and sustainable distribution networks, because waiting until costs become unmanageable or volumes migrate toward alternative models could prove to be a strategic mistake that is difficult to recover from.
The Canada Post case is a very clear signal for the entire sector.
