Purolator pushes eco-friendly delivery with $1-billion outlay

Planned national hub in Toronto to help give companies easier access to U.S. cities

Electric courier bikes, geotagging tracking on packages and 1,000 vehicles with smart technology are just some of the eco-friendly investments being made by Purolator Inc. as part of its $1-billion capital outlay announced Tuesday.

“We’ve got everything from 24hour parcel lockers to e-bikes for Toronto’s downtown core,” John Ferguson, Purolator president and CEO, said in an interview. “We’re working on a new fleet that will be more electric. So, we’ll be getting after not only that technology but it’s going to be good for the environment and sustainability.”

Purolator has about 300 hybrid-electric vehicles and plans on adding more to the fleet by 2020.

“It’s almost like our couriers are operating with more of a smartphone device,” Ferguson said. “They can take pictures of packages, it’ll take geotags so customers know where packages are at all times.”

However, the Mississauga, Ont.based courier company is not mulling delivery via drones as Amazon and Drone Canada are but will be adding more hybrid vehicles like electric cargo bikes to drop off packages and self-serve parcel lockers in downtown Toronto.

“Delivering with drones is a really good idea but hard to make it economically viable with packages. It is expensive and requires more energy to fly something in the air,” Opher Baron, professor of operations management at the Rotman School of Management at the University of Toronto, said in an interview.

“One possibility is when people’s cars are autonomous you can send the car to pick up the package and drop it off at home.”

Purolator — a freight, package and logistics solutions firm primarily owned by Canada Post — hopes to create at least 2,500 jobs from the investment.

The focal point of the plan is a $330-million national hub that will handle about half of all parcels.

“This new hub will have almost triple the capacity (for deliveries),” Ferguson said. “You can imagine 50,000 packages processed going to 150,000 packages per hour. That’s a big deal and that’s where the automation allows us to be more flexible and handle peaks.”

The 60-acre plant is set to open in Toronto by 2021, but Purolator is also opening an $8.5-million terminal for the Greater Toronto Area in September. Ferguson said the plant will allow for up to 135 new delivery routes north of the city.

The firm will also expand its Mobile Quick Stop service, which it said acts as retail outlets on wheels and piloting last-mile pick-up.

“There’s very few transportation companies left that are Canadian-owned that will invest in Canada,” Ferguson said.

Rotman’s Baron thinks the investment is worthwhile as parcel delivery in Canada is tough with its largest cities spread apart, but operating in Toronto gives companies easier access to cities south of the border.

“New York, Chicago, Boston, Washington — they’re all closer to Toronto than Vancouver, especially for express delivery. It supports e-commerce with all of the international airports,” he said. “It could have the impact of making Toronto a logistics centre.”

Ferguson said Purolator is continuing to consolidate vendors in the U.S. and said the new deal will help make way for more exports to Europe and imports from Asia.

“The U.S. is our dominant trading partner. We have about 30 U.S. locations ... we move all that product through customs, clearance and run it through our network in Canada,” he said. “It’s really a cross border solution that includes all the links and supply chain.”

Before, Ferguson said Asia would import to the U.S. before packages ended up in Canada, because of America’s buying power, but now Asia ships directly to Canadian shorelines.

“We see ourselves as almost the catcher’s mitt of packages in Canada, capturing all this freight from international sources destined for the shelves and homes of Canada,” Ferguson said.

“There’s a lot coming direct into Canada now through our ports and that direct trade is where we’re well-positioned.”

This new hub will have almost triple the capacity (for deliveries). ... That’s a big deal.