11: Rewind: Canada, eh? e-Commerce Strategies for Shipping in Canada

Voiceover: 00:00:00

Welcome to Outside the Box with Asendia usa, a podcast educating US based e tailers on international shipping topics and how they can expand their global e commerce footprint.

John Walsh: 00:00:10

This is John Walsh again here with my partner Nick Agnetti. We have a special guest joining us today, Dave Mays, CEO of Broad Reach and Asendia company.

For this part of our conversation, Dave has a wealth of knowledge about Canada. It's I think unsurpassed, right Nick and anybody else other than that quite frankly, by far right.

He has a special focus on market leading cross border with a special focus on U.S. canada.

Although Dave will talk about, he has also the ability with his product offering to do intra Canada, which I think is something that is important to remind all our customers about as well. Dave works with us closely on all our opportunities working on Canada.

Dave's background and knowledge has been paramount to our success of growing our business in Canada.

Nick Agnetti: 00:00:49

And so with Dave on, David is the best resource I've ever encountered when it comes to Canada.

So I'm very excited that he's on with us today not only to talk about, you know, CIA's northbound service option with our DDP network into Canada, but just the Canadian delivery market in general and what he's been doing, he and his team, the optimizations they've been doing and just really helping to improve delivery options into the nation of Canada.

John Walsh: 00:01:17

One of the topics we want to talk to you about was when you get on the phone or teams or whatever we're interacting with our client, you always talk about a lot of the challenges that you see of E commerce shipping into Canada and into Canada.

And is there any like the customer feedback that you've been with us that is standing out more than others that you're seeing as an issue like clearance, customs, cost, transits, visibility, anything in there that stands out more than others that you want to talk about with Star.

Dave Mays: 00:01:44

The reality is Canada's physically bolted on in the same continent right next to us here in the US and it is the first, best next international market for virtually every detailer that ships out of the US.

Once you learn how to identify, create demand, build out the supply chain with partners and ultimately get those packages delivered, then you start looking at other markets, other contents. The supply chains are very, very different.

We can effectively cover Canada over the road or through ground options anywhere between 1 and 7 business days to 90 plus percent of the country. And there is a similar divide east and west in Canada as there is in the US about 75%, sometimes 80% of the orders.

But about 75% of the population is east of Manitoba and Then the other 25 to 30% of the population is west E Commerce orders. Generally depending on the merchant, you're going to have a little bit lighter delivery profile to Quebec. Quebec is French speaking.

If you create French speaking site you can identify, generate demand and be highly successful. It's about 23% of the population we see about 10% of the orders go to Quebec for standard US cross border shippers.

effectively that's where that: 7030

You can see your dog run away for about a week and you'll still be able to see that's how flat it is and that's how far and it's and it's cold and you know there's lots of geographic challenges in serving Canada, but there are some pretty interesting profiles related to the population and where they're located. About 80% of the Canadian population is within 100 miles of the US border.

But again if you look at how long that border is, you're still talking about significant east to west mileage.

John Walsh: 00:03:34

So what from a consumer in Canada? Has anything changed in the last 20 some years? You've been doing this? For sure.

Dave Mays: 00:03:39

There's no doubt that the branded fully integrated B2B retail and B2C couriers in Canada, including the big integrated couriers here, FedEx, UPS Purelator is the largest integrated courier in Canada and there was a significant preference for a delivery with any of the large integrated couriers. I think that was a 20 year ago philosophy that has E Commerce has changed the expectation residential surcharges, delivery area surcharges.

There was lots of surcharges associated with the integrated couriers getting to bottom mile residential addresses. They have changed for the better and the market has also changed. Triple the expectation of alternate delivery providers.

So technology has really allowed both us as a consolidator and forwarder to provide as good if not better tracking experiences than the integrated courier. So we're able to end to end not only manage from a communication and transportation standpoint, but the visibility is outstanding.

The customers really know and are comfortable with the expectation of delivery through a delivery partner.

Nick Agnetti: 00:04:43

I do want to talk a little bit specifically about what you've created, you and your team created with the Broad Reach network and how you guys are able to improve the customer experience over let's say something like a, an integrated courier like the FedEx or DPS or even you mentioned Purelator. Could you talk to that for a couple minutes?

Dave Mays: 00:05:00

Yeah, it's a, it's a little bit of a, of a careful description. And the reason I say that, well first off, there's no formulas in shipping. There's nothing that's proprietary.

There's nothing that we're doing that is an invention of some cutting edge service that no one's going to be able to replicate. But there are some best practices and some things that we do with our transport network.

There are some ways that we clear customs, all forward thinking and compliant. There's bond utilization, there's all sorts of cross docket partner network connecting that we do to achieve the outcome that we have.

And we want to continue to describe that. We want to continue to have merchants trust us and we want to continue to beat the competition in terms of service quality.

At the end of the day we have the fewest number of touches, the fewest miles or kilometers travel and the lowest cost, most efficient network after two years for us to Canada straight away. So a very fresh approach. We really focused on middle mile, we focused on middle mile speed.

We focused on getting to all the major cities in Canada, whether it's ground or air.

We have a fantastic partnership with Air Canada that reaches anywhere between eight and 12 major cities in Canada for an expedited product that's very successful.

We're working with these alternate delivery providers moving times around to have preferential service picking up one, two days depending on the province, depending on the U.S. origin shipping point. Again all end to end in terms of not only custody but also visibility and transparency to those packages.

The customs clearance process probably don't want to go into too much detail on this because we will definitely bore the listeners, but we have automated it entirely. We have bonded trucks and bonded facilities.

We do an electronic release and anytime there's an inspection, we rifle through what we call, I guess containers that are, that are marked with those parcels. We pull the whole, the held parcels and everything else flows through.

So even if there are inspections or holes or delays, it only would affect these small parcels that will be targeted. So we've built operation technology and a system to we think compete with even the express carriers.

I mean some of the markets out of the US that we're getting service into Greater Toronto and or eastern Canada out of the Northeast in the US are faster than you could get if you actually flew it on a plane that went through Memphis or Louisville and had a delivery by a, you know, purple tail or a Brown band.

Nick Agnetti: 00:07:17

And now it's important to remind the listeners too, this is an entirely DDP network. So one, our focus with this network is improved customer delivery experience.

But what would you say and you know, I know this is just speaking to our network and again we'll get back to, and we'll continue to highlight Canada, you know, holistically.

But in our network in terms of packet weights, do you see any challenges when you, you know, between 1 to 2 pounds versus let's say, and I know we're breaking this down pretty granular but you know, four to five, six pound packages, any, any benefits, pluses, minuses, things like that.

Dave Mays: 00:07:50

99.5% of the product that we're moving today with this fantastic ramp of volume with Asendia is well within that. Our average weight on a dimensional basis is somewhere between three and four pounds.

Our average weight on an actual gravity weight is one to two pounds. And I expect that to go, I expect that to go up. In my past life we had higher average weights of parcels.

But to be honest, in our transportation network, the efficiency of each of these trucks, we can get anywhere between 6 to 10,000 parcels per truck with the current profile of the Asendia client base and we can really do amazing things when we have that level of efficiency on those trucks that that package count.

John Walsh: 00:08:29

I know you're always looking to improve the customer experience.

Is there anything else that you're seeing other than things like that you've demonstrated, just working with you and helping the customer, that you are forward thinking? Is there anything else that you see on the horizon that can benefit and make the customer experience better?

Dave Mays: 00:08:43

Our network moves seven days a week. Our warehouses are open up to 24 hours.

There is no reason why every carrier provider and every merchant shouldn't be able to commit seven day delivery.

We are going to have three solid levels of service and even our slowest slash most price efficient ground service is going to be smoking fast relative to where it's starting and where it's going to.

But really engineering both a very cost effective expedited solution which we are doing now, and even engineering a express service to compete with true airport to airport final mile deliveries on through integrated courier network.

This couldn't happen in the States, but our delivery profile unbelievably is somewhere between 20 and 28% into what we would call southern Ontario, Greater Toronto. Depending on how you, how you carve up the map, we are able to get next day service out of many major cities in the northeast and upper Midwest.

And I'M not going to tell you exactly how we do it, I'm sure some of you know.

But the bottom line is we are going to compete with anywhere between 20 and 28% of the total deliveries in Canada on a next day basis out of major centers in the upper Midwest and northeast. And this is something that has really pushed a lot of our competitors to rethink how they're doing things.

And I think it's an important feature of our service that is a differentiator between us and our competitors.

John Walsh: 00:10:03

There seemed to be like a misconception, you need something in Canada. But you said there were benefits not to be that.

Nick Agnetti: 00:10:09

Right.

Dave Mays: 00:10:10

So it really depends on somewhere between 8 and 12 answers to really important questions. For example, what's your order velocity? How many orders are you shipping a day? Where are they shipping from?

Nick Agnetti: 00:10:23

The States?

Dave Mays: 00:10:23

What are the order value, what are the commodities, where are they made? Right. So what HTS code drives, what duty or not? And what are the value of the goods when you cross the border? Bring them in.

At what duty are they applied? Sorry, what value? What would drive duty?

So if you bring product into Canada and you clear it on a cost of goods basis or wholesale basis or intercompany basis, you're going to pay less duty as the value is lower. With that being said, fuel, labor, warehousing, everything's more expensive, especially in Toronto.

And Toronto is a top five city in North America in terms of size and population. It's also very expensive. Vancouver, one of the most expensive cities in the world, Alberta is not cheap.

If you're going to go in Canada with infrastructure, you want volume, you want a very deep, not only logistics review, but financial review. And what you can always do is go into Canada at a future point in time based on understanding the market.

Better to start shipping from the States to Canada. Usually 90% of the companies do that. And again, a lot of this is product driven.

John Walsh: 00:11:29

I mean obviously we can do some sort of fulfillment.

Nick Agnetti: 00:11:31

Right.

Dave Mays: 00:11:31

Our staff, that staff that I keep referring to has experience in every product and service that we're talking about. Trade services, compliance, technology, pick pack element, the whole bit.

John Walsh: 00:11:42

Well, I think that's it. Dave, do you have anything else to add before we close it out?

Dave Mays: 00:11:45

Really appreciate you taking that time with me whenever you're busy.

John Walsh: 00:11:46

So thank you very much.

Dave Mays: 00:11:47

Maybe once a year we should do this and I can give you a network, updates and fun stuff like that.

John Walsh: 00:11:52

Yeah.

Nick Agnetti: 00:11:52

Telling you, Dave's faves the man, he knows what's up when it comes to Canada.

John Walsh: 00:11:55

So Yeah, it was really good to.

Dave Mays: 00:11:57

Have him on here.

Nick Agnetti: 00:11:58

Thanks guys. Have a great day. If you want to support our podcast, the number one thing you can do is share it on your social media and tag Asendia.

John Walsh: 00:12:05

That helps us get the word out.

Dave Mays: 00:12:06

And we really appreciate it.

Voiceover: 00:12:07

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If you want to learn more about today's topic, email us at e commerce usaasendia.com and check back frequently for new discussions on E Commerce shipping to Canada and worldwide.