Courier services navigate evolving challenges

The last leg of a product’s journey to its final destination is as important as the first, and with recent ripples sent through the global trade landscape, courier and last-mile service providers must be able to respond to uncertainty and confusion.

Geoff Walsh, CEO of DHL Express Canada, said his main priority is to protect DHL’s core service commitment to its customers and minimize any disruptions stemming from continued tariff and trade policy changes — all while remaining compliant with customs rules and regulations.

“We have expected the shifts in tariff and trade policy to impact U.S. trade flows and prepared for different scenarios, while also ensuring that we stay responsive to new developments in this fast-changing environment,” said Walsh.

One of those recent developments occurred in their B2C (business-to-consumer) segment, when shipments from all countries with a value over US$800 required formal entry processing into the U.S.

“This regulatory change caused a significant increase in formal customs clearances, and DHL implemented the temporary suspension to ensure we could maintain our high service quality commitment for our customers,” said Walsh, adding that shipments valued under the threshold, as well as B2B (business-to-business) shipments, were not impacted by the suspension.

“Following constructive dialogue between the express industry in the U.S. and the government, the temporary suspension was withdrawn on April 28 and DHL Express resumed the transport of B2C shipments addressed to private individuals in the U.S. where the declared value exceeded US$800.”

Examples like this are why Canadian exporters should be ready for the new normal — the only certainty is uncertainty — particularly when it comes to the trade relationship between Canada and the U.S.

“A great number of Canadian exporters export exclusively to the U.S., and after many years of consistent and predictable trade activities, there is now a level of uncertainty and confusion about what to expect,” said Walsh. “This has resulted in SMEs evaluating what logistics model to leverage to maintain cost efficiency while maintaining their quality of service.”

But sometimes, as Walsh said, identifying a single prevailing strategy to deal with tariff and trade policies is difficult.

“A lot depends on the specific characteristics of individual retailers, their product range, sourcing and distribution networks,” he said.

Much of that resilience stems from a company’s ability to diversify its distribution channels and be familiar with how those channels operate.

“Last-mile delivery, whether automated or traditional, often involves utilizing various distribution channels and partners across a business’s supply chain ecosystem,” said Frank Kenney, director of industry solutions at Cleo. “It is also likely that the companies operating those various distribution channels have different delivery tracking and planning systems, capabilities and requirements.”

Kenney pointed to the importance of data and integrated technology to bring clear communication between partners and logistics companies.

“To have full visibility and control of final-mile deliveries, businesses must invest in an ecosystem integration platform that enables real-time sharing of data and updates across partner systems and workflows,” he said. “This enables enhanced tracking and communication across all distribution channels and stakeholders involved in the last mile.”

Integration software helps companies navigate hectic and changing supply chains, including during last-mile delivery.

“By connecting business systems between suppliers and partners that enable final-mile delivery, organizations can gain full visibility into what is happening in outsourced or partner-provided logistics operations,” said Kenney.

At DHL, a proprietary version of a global application allows the company’s couriers to be more efficient, productive and knowledgeable about customer needs during last-mile delivery.

“Our global courier application ‘learns’ alongside our couriers,” said Walsh. “With the benefits of AI, we will be able to improve our efficiencies on every route over time, which will result in our customers getting deliveries at more predictable times.”

Customers can also use the “Follow my Parcel” feature to get delivery time windows in real time.

Sustainable courier services

DHL currently has nearly 100 electric vehicles active across Canada — more than 25 per cent of its owned fleet — a step toward the company’s goal of at least 66 per cent electric by 2030.

“Deploying an electric fleet has various challenges, which includes the winter weather affecting the longevity of vehicles,” said Walsh. “However, recent developments in EV technology have vastly improved winter battery performance and because of this, we are now able to revisit our electrification plans for our fleet in the country with hopes of accelerating it.”

Also helping to balance the growing demand for faster delivery with the environmental costs associated with vehicle use and packaging waste is the addition of more efficient air transport, carbon-neutral buildings and sustainable fuels like biofuels, solar energy and sustainable aviation fuel.

DHL has also prioritized fostering partnerships with its customers to achieve greener, low-emission logistics through its GoGreen Plus service.

“It uses the ‘book and claim’ concept, allowing fuel to be used anywhere in the world,” Walsh explained. “Emission reduction credits related to the use of this fuel are transferred to investing customers, allowing them to report these emissions reductions as part of their own environmental goals.”

The GoGreen Plus service is available to customers who want to reduce emissions from the air transport portion of their shipments.

Adapting to change

With no certainty in the global courier industry, Canadian businesses will need to embrace the advice of former Oakland A’s general manager Billy Beane — adapt or die.

“Prior models typically fit a relatively predictable set-up: import from China, export to U.S.,” said Walsh. “As tariffs change and global economic situations develop, DHL Express will act as an ally to our customers to assist them in diversifying their supply chains and expanding their reach to new markets they may not have considered before.”