ETOBICOKE, Ont. - "The trend to fully integrated logistics will surely continue into the future. The use of the term 'courier' may at some point in time be only reserved for local, in-city type delive...
LEADERS OF INTEGRATION: No one is more adept at understanding the integrated relationship of today’s supply chains than large couriers like UPS.
ETOBICOKE, Ont. – “The trend to fully integrated logistics will surely continue into the future. The use of the term ‘courier’ may at some point in time be only reserved for local, in-city type deliveries,” – Peter Stroud, managing director of operations at Fedex’s giant hub at Pearson International.
I hated this job at first. Working as a city bulk driver for Canada’s largest courier fleet came with a barrel of frustrations. Some customers were perpetually late with their shipments. Another turned its clocks back to hold me in the docks a few extra minutes. Too often, my truck would get mired in Toronto rush hour traffic on Hwy. 401, (or 427, or 404, or 400) while I’d fret about meeting unrealistic window times in Markham, Mississauga or Vaughan.
Considering the fact the courier industry was virtually non-existent 25 years ago, it has shown an amazing growth rate, often in double figures. In 2004 Canadian couriers accounted for revenues of $5.6 billion. The business can be broken into two streams: overnight and deferred shipments. Messengers that provide same-day service have a smaller piece of the total pie, about $800 million.
Typically, my runs began in the early afternoon and usually involved four to six pickups in the GTA. Then I’d hustle back to the Ontario Hub in Rexdale, pick up an empty trailer at the skid-denuding dock, and continue making pickups and shuttles until about midnight.
The industry began with a bang in the ’70s when UPS started making inroads in the highly regulated Canadian market. Canpar was spun off from CP Express in 1976 and remains a major player on the domestic scene, especially with its recent acquisition by Transforce.
Today about 3,000 companies (many of them are small mom and pop operations) employ around 45,000 people working at 4,000 sortation centres, depots and hubs across the country. There are some 26,000 vehicles on the road. In Toronto, Purolator employs about 200 tractor drivers working out of a former Ontario Hydro yard in Etobicoke – and I’m one of them.
In many ways courier companies have blurred the lines between traditional types of road transport. Many have invested heavily in technology and provide customers with computers and scanners. Others act as parts bankers for manufacturers and some offer clients total transport packages including ocean and rail options.
With experience the runs got a little easier, and I stopped dreaming that I was driving a Sterling. Some of the window times were still bizarre but I could usually make up time in other places. Even the downing of an airliner at Pearson International didn’t slow me down much. I was able to sprint up Hwy. 27 and still get to the Hub on time.
Couriering in Canada could be called an oligopoly: control of the market by a few big players. According to Gary Breininger president of Infobase, a Toronto consulting firm specializing in transportation logistics, the big seven couriers (in alphabetical order) are Canada Post, Canpar, DHL, Fedex, Purolator, TNT and UPS. He also cites four up-and-comers: ATS, SamedayRightaway, Midland and ICS.
Purolator’s Ontario Hub in Rexdale is reggae music at 4 p.m. Before the afternoon trucks start pouring in, someone has cranked Bob Marley at a work station. In an hour, when the conveyors are running, you won’t be able to hear anything.
Courier companies are not only consolidating but working together. An example would be UPS Supply Chain Solutions which does all the shipping, picking and packing for Dell Computers. Trailer loads of computers are loaded by UPS in-house staff on behalf of Dell and delivered by Purolator. If the parts are going air freight to the U.S. they will be transferred to Airborne Express, a large U.S.-based air fleet that is a subsidiary of the German courier giant DHL.
Purolator’s Rexdale Hub handles upwards of 240 trailer loads and 160,000 pieces daily. A dozen hydraulic trucks shunt trailers between 112 doors.
The pace gets frenzied towards the 10 p.m. cut-off time. Shunt trucks and tractors crisscross at the doors dodging slower-moving Highlands, Yankes, Arnold Brothers and Challengers in the yard to pick up their nightly runs to Burnaby, Granby, Calgary or Moncton.
“Clearly this market is growing faster than the economy,” says Breininger.
His figures show compound growth for the last three years in the sector from 5.5 to six per cent and he expects it to continue. Globalization and customization are two of the spurring factors, he says.
“Couriers are moving beyond their traditional roles and companies like what they see. You can’t truck a shipment to Germany, but a courier can.”
Ironically, the same things that bothered me about this job at the beginning are what I like about it now: the sense of immediacy and precision, the daily puzzle solving. I particularly enjoy drawing the midnight run with U.S. freight to Hamilton Airport.
Couriers have some of the largest airline fleets in the world and Purolator keeps a handful of Boeing 727s at Mt. Hope Airport in Hamilton, Ont. It’s less than an hour from Toronto and it was probably a smart strategy to bypass Pearson International Airport. The U.S. overnight freight is loaded onto an Airborne Express jet that arrives every weeknight.
Backing onto the tarmac is a very cool thing. A mobile conveyor attaches to the back of the trailer and the air containers are hoisted directly onto the 727. On my very first trip to Mt. Hope, I got to hand the captain the DG papers and take a peak inside the cargo bay. Nothing fancy, just a shell of an aircraft lined with plywood.
A few minutes later I watched the plane arc into the sky headed for Ohio where the parcels will be split and placed on jets bound for other U.S. destinations.
If all goes well, businesses in New York and LA will get their deliveries first thing in the morning.
And sipping coffee in the airport Tim Horton’s, and watching the sky, I got to thinking maybe this job isn’t so bad after all.