A system that delivers the goods
Packaging and courier services have seen an uptick in demand thanks to new consumer habits
Retailers might be struggling to lure shoppers through their doors because consumers are too busy ordering online. But shippers aren’t complaining.
Demand for parcel delivery keeps rising. Even companies such as DHL Express Canada, which specializes in overseas deliveries, are seeing an increase in shipments.
“The business is growing dramatically in Canada. We are quite bullish on Canada,” said DHL Express Canada president Andrew Williams, who declined to share detailed sales figures but said company revenues here have grown at about15 per cent a year in the past two years.
Williams cited the weak loonie as a factor, which has helped increase the export market. There’s also surging e-commerce demand, whether it’s single items being sold on Amazon or eBay, or Canadian retailers selling overseas.
The company, which is owned by Deutsche Post DHL, will open a retail store at the Scarborough Town Centre in July. In Toronto this fall, the company is also looking to add Pack stations, giant yellow lockers where consumers can collect parcels at any time — a common sight in Europe.
In Germany, 90 per cent of residents live within a 10-minute walk of these type of lockers. Williams said the company is still negotiating locations, which could include retail stores, gas stations or transit stops. A one-time pin code is given to customers to release their shipments. Initially, the lockers will be used only to retrieve items, though DHL may consider adding outgoing shipping down the road, as it does in Europe.
Williams said the key is flexibility, so consumers have the option to have an item delivered to their home, office, a neighbour or to a Pack station.
Consumers have different behaviour patterns — some want to wait for their delivery at home and sign for it, but others might be prepared to waive a signature. Others want to go to a retail store to collect the item on their schedule, he said.
Craig Calvert, director of customer solutions at UPS Canada, agrees that consumers want choice, with control over delivery including dates and times.
“Maybe you ordered an item online and you notice it’s going to be delivered on Friday, and you’re planning a getaway for the long weekend. You can change the date for delivery from your phone, computer or tablet,” Calvert said.
Consumers can also request items be delivered and held at one of 900 UPS store or affiliated access points such as drug or convenience stores, and get discounts on shipping costs as a result.
Even Canada Post, which is grappling with a steep decline in letters and bills, credits the parcel business for helping to generate profits in the first quarter.
The crown corporation opened a “post office of the future” concept in Richmond Hill last October, which will roll out in other cities soon including Edmonton and Vancouver. It includes drive-thru parcel pickup and a fitting room to try on items purchased online.
“If it fits, wonderful, you take it home,” said Danielle Doiron, Canada Post’s director of parcels market development. “If it doesn’t, you return it right away.”
Like other shipping companies, Canada Post has also set up Flex Delivery, alternate addresses where items can be delivered. As well, it has offered Delivered Tonight, a premium service in Toronto, Vancouver and Montreal; if purchases are made before 1 p.m., they will be delivered that night for certain retailers including Indigo, Sephora, Best Buy and Frank + Oak.
In some cases, the retailer may cover the delivery costs as a way to surprise consumers with a quick turnaround on a purchase.
But Doiron concedes that most times, “It’s a motivated buyer who is willing to absorb the cost because there is an urgent need.”
Canada Post says it is seeing increased online consumer shopping go beyond traditional peaks such as Christmas or Black Friday. It raises the question about whether delivery should extend beyond the usual five weekdays.
While Doiron expects to see a surge in August for back-to-school shopping, she said Canada Post won’t do weekend and evening deliveries this summer, though it’s planning to extend deliveries in November, as it did last winter.
For all shippers, one of the biggest challenges is undelivered items, with the added cost of making multiple trips to try to deliver a parcel.
Canada Post has begun to install parcel lockers in apartment and condominium buildings where there are high volumes of parcel shipments and high rates of recipients who are not at home to receive the items.
It expects to have 2,700 of these six-unit lockers installed by year’s end, and Doiron says the units spur even more business for Canada Post.
“In buildings where lockers are installed, there is a 25-per-cent increase in online shopping,” she said.