Inside Logistics

Riding the wave

Couriers scrambling to meet e-commerce demand


(IStock image)

December 28, 2020
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Against a backdrop of unprecedented demand for e-commerce, courier companies have experienced a very good year in 2020. Far from experiencing a slowdown thanks to the Covid-19 pandemic, last mile and express delivery services were often hard-pressed to keep up with demand.

As they go into the final mile of their year, many are predicting their best-ever holiday season. More than 80 percent of Canadians will do at least some of their holiday shopping online, according to a Fedex Express survey. Purolator said it expects a 20 percent jump in the number of packages it will handle this season.

To keep the expected 46 million packages moving, Purolator said it has brought more pick-up and drop-off points online and hired 2,500 new staff. Its “year-round process for managing periods of significant volume fluctuations…has enabled our team to adapt quickly during the pandemic to meet the needs of businesses and consumers,” said John Ferguson, Purolator president and CEO.

New hires

FedEx Express Canada has increased its workforce from 7,500 to over 10,000, representing the single largest hiring increase in one quarter in the company’s history in Canada. It also fast-tracked the opening of a new package-sorting hub in the Greater Toronto Area.

UPS also opened its Caledon, Ontario, hub early and has said it will hire 5,000 new staff to manage demand. “We anticipate a record-breaking holiday season, but this new hub – our flagship facility – and the dedicated people that operate it, are ready to serve,” said Dominic Porporino, president of UPS Canada.

At DHL Express Canada CEO Andrew Williams expects year-over-year growth in the 40 percent range in terms of volume for peak season. DHL Express Canada has added 26 percent more people this year, hiring 454 new staff.

Like its competitors, the company has also opened a new hub. Based at the Hamilton International Airport, the DHL Express facility will comprise an inbound clearance gateway and a service centre for Hamilton and Southwestern Ontario delivery routes. The service centre portion opened in early November, supplying 70 driver routes.

Williams said the rest of the building, a 240,000-square-foot automated sorting facility, is a first for the company in Canada. “It represents the largest single investment that we’ve made in the country to date, and backing that up, we are doubling number of network flights that we have coming into the country,” he said. It is slated to open in May 2021.

Williams added that the hub was planned for 20-to-40 year growth projections, meaning there is plenty of capacity coming online to handle the continuing e-commerce surge. However, DHL also anticipated that in 10 years it would have four flights a day arriving in Hamilton, and that’s how many are landing today.

“It has brought forward some of our projections, but we built enough of a buffer into our volume projections as it is,” Williams said. The facility is modular, and with the 16-acre plot of land it sits on, there is room to add space on the pickup and delivery side.

Trends

In an interview, Williams shared DHL Canada’s 2021 outlook. He sees three trends shaping the courier market into the next year. First is the continuing adoption of e-commerce shopping habits. “We’ve probably seen something in the range of five to 10 years’ worth of growth in the last five months, and we anticipate that to continue,” Williams said. He expects the trend will persist even when a vaccine becomes available because consumers have gained “a strong level of comfort in purchasing online and purchasing online from anywhere in the world.”

The second trend is accelerating globalization. The pandemic really highlighted that “companies that trade internationally have access to markets that can give them some protection when perhaps their own home market isn’t doing quite so well,” he noted.

Digitization is the third trend. DHL is introducing digital initiatives that allow recipients of shipments to customize the delivery, as well as automation of many customs clearance tools, and route optimization.

Finally, on the future of vaccine distribution in Canada, Williams noted that DHL Express is taking part in the industry’s conversations with the federal government. “We have expertise in that space,” he said. “We’re also realistic. This will be the largest logistics undertaking in the history of Canada and the world. We really need to understand the full picture of expectations from the federal government, and then we will participate in a way that we can deliver the type of service that any customer would expect from us.”