Paul TessySenior Vice President, Purolator International
I had the opportunity to speak on behalf of Purolator at Triangle’s World Mail & Express (WMX) Americas Conference. There in Miami, among our global peers, I shone a spotlight on a market that is gaining plenty of steam: shipping into Canada.
E-commerce is a massive and growing segment in Canada with seemingly unlimited potential. Sales surpassed $95 billion in 2021[1] and by 2022 over 75% of the country’s population were frequent e-commerce users. This number is expected to grow to nearly 78% in 2025.[2]
It is a prime opportunity for U.S. and global companies to unlock newfound growth and potential – many of whom are under-penetrating the Canadian shipping market, which at a healthy level represents 10 to 15 per cent of U.S. volumes.
Let’s outline some challenges and distinctions in Canada that may be influencing how companies make inroads into the market:
Geography: Canada is a vast landscape that includes, outside of urban centres, a highly dispersed population through rural and remote areas. As a result, many shippers use various agents to cover the territory, with the final-mile delivery experience out of their purview.
Cross-border hub and spoke models: While this model – with a central location and smaller distribution centres – works well for domestic shipping, it may not be the fastest or most cost-effective method to reach all end-consumers in Canada when shipping from the U.S.
Evolving consumer demands: Customers want speed, reliability, customer experience and cost effectiveness. All of this can boost cost pressures for carriers.
Specialized carriers: Most carriers are now specialized, limiting breadth and even speed. They may cater their offering to the top verticals, with customized products, or concentrate efforts in urban areas only. (Meanwhile, the lines between B2B and B2C blur more and more as each sector becomes less distinct.)
What companies must look for in a Canadian delivery partner
With all of this in mind, what should customers and consolidators be looking for when selecting a delivery partner inside Canada? Here are my top considerations that will help set any company up in a solid position over the long-term.
- Broad product portfolio
The more comprehensive an offering the better: 1- and 2-day express, group, postal delivery, LTL and FTL freight, fulfillment and returns. It is important that a partner not just offer these products but integrate them into their final-mile networks. It is similarly important that they have a high capability to respond quickly when critical needs are in play.
- Focus on solutions management
An advanced solutions management team should be in place, comprising cross-disciplinary experts that ensure shippers reach every customer and are experienced in solving obstacles. It’s ideal that such a team inherently possess deep partnerships with clients to be able to customize cross-border and domestic networks (avoiding the need to use a fixed network or asset).
- Innovate
Innovation is a broad buzz word of course, and every company claims this trait in one way or another. A forward-thinking delivery partner should exhibit tested and proven solutions that boost efficiency, reliability, and consumer convenience. There should be no hint of stasis when it comes to evolving operations.
- Deploy a broad coverage model
Outsourcing to third parties risks an inconsistent delivery experience. Instead, a strong delivery partner will cover Canada in as high a percentage as possible inside its own network – creating broad geographic coverage.
- A plug-and-play ability
This stems in part from the broad coverage model but goes further in ensuring that working with a delivery partner is as seamless as possible. Top of the list here is network flexibility, an example of which would be the ability to route rest-of-world (ROW) Canadian volumes via the U.S. to leverage economies of scale there, as well as on shipping lanes into Canada. Other considerations would be simple IT integration and customs brokerage and compliance.
- Commitment to sustainability
There is no escaping ESG in modern business, nor should there be. The marketplace has evolved in recent years, and global uncertainty and climate change is behind a rising demand that our industry engage in sustainable products and practices — by both consumers and customers. Environmental and social responsibility is a top priority today.
- Focus on customer service
Speed, reliability and responsiveness are certainly the baseline here, yet it’s worth investigating the depth of how a delivery partner tailors its customer service. Are its solutions designed specifically with customer service in mind? Does it have customer care teams specialized by region, industry and even product category? Is there a playbook on how it will maintain service when events such as labour disruptions or severe weather occur?
Looking ahead
To be successful moving forward, industry players must harness the right mix of network strength, innovation and culture. In future articles in this series, I’ll take a deeper dive into the important considerations I’ve mapped here, as there is plenty more to unpack.
Written by Paul Tessy, Senior Vice President, Purolator International