“In 60 years, we’ve almost never seen such an investment in our business so it’s really a big day for us to announce this.”
That’s Purolator Canada boss John Ferguson speaking to BNN Bloomberg on Tuesday on the announcement that his company will be investing $1-billion to upgrade its logistics network across the country, including a “super hub” to be built in Toronto to handle the now booming parcel business, thanks to the rise of e-commerce in general and Amazon in particular.
And while we’ve for years witnessed Amazon’s Canadian expansion as it builds more distribution centres from coast to coast, the temptation would be to conclude that just as it has done in practically every market segment it has come across —starting with bookselling and merchandise and now including groceries and cloud computing— Amazon’s development of its own logistics network might seem like game over for delivery companies like Purolator Canada, a subsidiary of crown corporation Canada Post.
Not so, says CEO Ferguson, who argues that the mutually beneficial relationship between Canada Post, Purolator and its biggest customer, Amazon, is likely to persist.
“In Canada, they’re a great partner,” says Ferguson. “It’s a company that’s very innovative but we are as well, and I think that companies like Amazon and others really like the innovation that we’re bringing to market. Companies like Amazon want high customer experience and speed, and part of what we’re doing here with this announcement is cranking up our speed in our network.”
Purolator’s new five-year investment plan should result in a tripling of its delivery capacity, according to the company, with the Toronto super hub, which when completed will handle 60 per cent of the company’s total volume, as the focus of the buildout.
Ferguson says the delivery business has never been as complex as it is today and that
Purolator is looking to strengthen all aspects of its logistics network as a result.
“Everybody wants things faster and more convenient. We’re after data and analytics and we’re investing in IT, and that’s the kind of industry it has become,” Ferguson said. “It’s almost becoming as much about technology as it is about the physical piece,” he said.