James Cartledge talks with Jason Crown of Canadian firm The Messengers International about how a regional courier company is finding growth opportunities in a challenging market.
The Messengers International was founded more than 25 years ago as a sameday rush courier business in downtown Toronto, specialising in particular in the finance sector within Canada’s largest city.
The company has seen the sameday courier business slow down over the past decade, particularly the envelope side of the business, with what once accounted for the majority of the firm’s activity now representing about 30% of its business.
The Messengers offers courier services as rapid as a 15-minute service within downtown Toronto, but on the whole that side of the business has been in decline.
Major growth areas at the moment have been seen in overnight delivery and parcels.
In parcels, the company tends to specialise more in business-to-business shipments, meaning that rather than ecommerce, growth has come from a general shift in businesses preferring not to keep large inventories of stock on hand, but ordering more frequently in smaller batches.
Jason Crown, the general manager at The Messengers, says his company has been able to succeed in the market place even up against major multinational heavyweights by being flexible to customer needs, specialising for individual clients, and ensuring a very high quality of service.
Through its history, the company has been early with technological innovations like its tracking systems, for example providing tracking in real time before rivals like Purolator or DHL were able to match. Rivals may have now caught up on real time tracking, but new service innovations continue to add value to The Messenger’s offerings.
As with many in the courier business, The Messengers had a tough 2008 and 2009, but while there was some downsizing to weather the storm, the company did acquire two small courier companies that had originally been part of the Australian Fastway business.
As its rush courier volumes have slowed, The Messengers International have found strong niche parts of the business in which to drive growth
While Fastway’s business model did not appear to work in the Canadian market, The Messengers gained an important innovation from its acquisition – prepaid shipping.
Crown says this particular offering has now been blended into the rest of the business and has helped the company to grow.
“It’s given us something new,” he says. “Traditionally a FedEx or a UPS bills you for your shipping, but with the Fastway system it was all based on being prepaid, and that opened up some new doors for us to offer a little better price. Being paid upfront it lowers your overheads – you don’t have to have the billing department and collections department.”
The model does take customers some getting used to, but Crown says the savings possible has been attractive, particularly during the difficult economic times over the last few years.
The wine business
Crown says one of the big successes for his company in competing in a market against major international players has been in finding a particular niche to specialise within.
The Ontario wine industry has proven a “blessing” for The Messengers over the past few years, he says. The Messengers delivers cases of wine within the Province of Ontario, to restaurants and homes, for as many as 80% of the Province’s wineries.
The market now accounts for as much as 20% of the company’s sales, handling around 1,600 orders in a quiet month, a figure that could triple in the run-up to peak times around November and December.
“It’s a very reasonable volume for a smaller courier company like us,” says Crown.
Crown says the wine sector has the kind of demands that actually favour the smaller courier business compared to its larger rivals.
“One reason I was able to secure the vast majority of the wineries in our region was that the big guys break the bottles. They have conveyor belts whereas we manage shipments hand to hand,” he says.
The company took a dedicated approach to the wine industry segment by creating two full-time positions to provide specific support for customers in that area, Crown explains.
“The dedicated staff give the wine industry direct contacts rather than going through the call centre. This is particularly helpful for pricing, estimated arrival times and special requests,” he says. “The special staff also proactively track 100% of the sector’s deliveries and report back any delays or issues immediately to the client.”
The wine industry team within The Messengers is also good for handling the more tailored demands of the business-to-consumer wine deliveries, for example wine of the month clubs, calling to set up deliveries by appointment. This eliminates missed deliveries and ensures that adult signatures are obtained for the shipments, Crown explains.
The Messengers general manager believes that with the success seen in the wine segment, more potential growth for his company could now come by either funding another niche of a similar specialist area, or perhaps by expanding into other areas associated with their wine customers.
“Right now we’ve been focusing on delivering wine physically, we haven’t had the opportunity for anything else related to the industry yet, such as equipment or paperwork,” he says.
“I recently developed a Facebook page for our business, and a lot of our customers have Facebook pages as well, and looking at those there is clearly a lot of related industries, so that’s probably a logical next step.”
Crown is also looking further afield for growth opportunities with The Messengers.
A large part of the company’s business is in providing last mile delivery for other courier companies, and this has included partnering with international companies like Aramex. Internationally, The Messengers also works with companies like Miami-based IBC to import shipments into Canada, and Tokyo-based OCS shipping items in from Japan via Vancouver.
Crown says a specialist company like his also offers the kind of capabilities to import shipments into Canada itself in a way larger companies may not be able to manage.
“The big guys can’t really do the type of importing that we can do,” he says, explaining that his company partnered with FB Canada Express to have a Canada customs bond on site at its highly secure Mississauga site, which means if a consignment was held by customs, it would not be the whole shipment that would face delay.
“I would really like to expand the traffic coming into Canada,” says Crown. “I’m currently trying to solicit more of this kind of business – it gives Canada more of a presence internationally.”
Crown believes Canada’s economy is now beginning to pick up again after a rocky recessional period, and with his company’s strong niche positions and continuing innovation, he is confident 2012 will see improvements continuing from the recovery seen in 2011.
Ultimately, his central philosophy for competing in a challenging market against some real heavyweights on the global stage is to keep his business lean and dynamic to the needs of customers andx the marketplace.
“They key is in just trying to be flexible – and treating our customers fantastically,” he says.
Source: James Cartledge, Post&Parcel