‘COVID-19 has forever changed e-commerce’
The logistics and transportation sector had a turbulent year, with extreme weather, competitive upheavals and, of course, a pandemic-fuelled surge in ecommerce. While business volumes soared, profits dwindled as fewer deliveries to businesses and more to consumers increased costs. Global giant FedEx saw revenues jump 20 per cent in 2020, but the company had to go on a hiring binge to manage that spike. FedEx Express Canada increased its workforce by a third between the summer and fall, representing the single largest quarterly hiring increase in the Canadian unit’s history. We caught up with Lisa Lisson, president of FedEx Canada, to see what delivery shifts are here to stay.
How have consumer expectations of so-called last-mile delivery changed now that we’re getting so many more packages?
The rapid onset of COVID-19 has forever changed e-commerce. Shoppers were suddenly pushed online overnight. With that, one of the trends we’re seeing is that package theft is on the rise. In fact, one in three online shoppers say they have experienced package theft, up from one in four previously. One of our couriers, for example, noticed a car following him through a community so he waited until the driver realized the courier was onto him and drove away. Certainly, porch bandits existed before the pandemic, but there are more of them now. So we’ve been focusing on giving customers digital solutions to manage the safe delivery of shipments, like tracking alerts and delivery notifications, and they can redirect packages to secure authorized locations.
But the number one change is the sheer volume of online ordering. We do proprietary research every year and last fall, 91 per cent of Canadians indicated they’ve shopped online — up from 85 per cent the year before.
One of the big e-commerce winners has been Amazon, which used
to be a big FedEx customer but now does its own deliveries, essentially competing with you. Do you anticipate other large global retailers starting their own delivery fleets that leave FedEx out of the loop?
We’ve got more than 70 locations across Canada that sort packages, so if a company like Walmart were to do this, it would require a significant investment. Also, in business, it’s very important to focus on your core competency.
Yet FedEx recently bought ShopRunner, a U.S. e-commerce platform. It seems like Amazon got into your business and you got into theirs. What was the rationale, given what you just said about focusing on core competencies?
We’re transforming how we use data and technology to continue to drive value for businesses and customers. ShopRunner connects more than 100 brands and merchants, and their omnichannel enablement capabilities will help unlock potential for FedEx. OK … so is ShopRunner a similar platform to Shopify? Or is it an online marketplace?
Yeah. Basically, it connects online shoppers with brands and merchants they love and trust.
FedEx has been experimenting with AI-powered robots and autonomous vehicles for deliveries. When will we see them on the streets?
You’re talking about Roxo. It uses sensors and could do local deliveries. We’re doing pilots now in the U.S. The issue we obviously face in Canada is our severe weather. This unit can get through puddles, but when we get a massive snowstorm that dumps three or four feet and the sidewalks haven’t been shovelled, that’s a problem. We’ve been talking to some customers about using it seasonally, but we are not bringing it here now.
FedEx has made a commitment to achieving carbon neutrality. Many companies are making such announcements, but concrete steps are often lacking. What is your plan?
We’re designating more than $2 billion of investment in three key areas: vehicle electrification, sustainable energy and carbon sequestration. There are detailed plans behind each one.
For example, on vehicle electrification, by 2040 our entire parcel pickup and delivery fleet will be zero-emission electric vehicles, and that’s going to be accomplished in phases to replace existing vehicles, with smaller goals like 50 per cent of vehicles being electric by 2025. We’re also working with our customers to offer carbon-neutral shipping and we’re building on the FedEx Fuel Sense initiative designed to reduce fuel consumption in aircraft.
Climate change has a direct impact on your business. Last year brought floods, wildfires and violent storms in some unexpected geographies. It brings to mind the movie “Cast Away,” which famously featured a FedEx flight going down in a storm. How are you adapting?
Certainly weather plays a huge role in our operations, so we’ve become very well-versed in implementing contingency plans. When people visit our hub, they’re blown away by our in-house meteorology department. It’s called the Global Operations Control Center and it’s responsible for monitoring weather trends and events around the globe.
It’s very cool — it looks like you’re in a spaceship. They monitor every weather pattern where our planes travel so if we get a typhoon or a snowstorm, we can redirect that flight or tell our customers we’re doing early pickups so we can get our drivers off the roads. Flight dispatchers and crews can speak directly to a meteorologist 24/7 and get detailed hourly forecasts for any specific warehouse location.
You’ve spent three decades at FedEx, but transportation is an industry that has relatively few women. Would you agree?
Yeah. I’ve spent my entire career at FedEx in Canada but I would definitely agree with that. In fact, we just did a study on women in transportation. It’s one of Canada’s largest industries, but less than a quarter of workers in the sector are women.
What’s interesting is that 40 per cent of women said they would not be open to a career in transportation logistics and half stated that they didn’t have enough knowledge to know if there were professional opportunities that would appeal to them. There’s a perception among women that because it’s such a male-dominated industry, there are limited opportunities. I, for one, am very proud that my executive management team is 50/50 men and women.
We were originally supposed to speak on a day that turned out to be awful for your company because of the mass shooting at the Indianapolis facility. How did FedEx deal with such a traumatic event?
It certainly was one of the most devastating days in the history of the company. It rocked us all to our core. My inbox just exploded, with messages not only from employees but our customers, my family.
Obviously, we put together a full team on site. All FedEx employees around the world knew about this, so we made sure we had good lines of communication and shared news coming out of our central communications team.
Communication is absolutely critical during a big tragedy like this.