challenges facing express delivery services in canada's urban centres

Institute of Housing & Mobility
Challenges facing the EDS industry in Canada's urban centres
Operating Revenue in millions (2005)
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$‐
ON QC BC AB MN NS SAS NB NFL PEI YK,
NWT,
NUN
FIGURE 3: A BREAKDOWN OF OPERATING REVENUE BY PROVINCE
Source: Statistics Canada – Catalogue no. 50-002-X
Figure 4 reveals that almost 85% of the revenue is generated by the four largest provinces with
Ontario at 45%, Quebec at 19%, British Columbia at 13%, and Alberta at 11%. The market
share in other provinces and territories is less than 5% individually. This suggests that the industry
is largely focussed around the provinces with large urban centres which are home to services and
businesses requiring couriers and same-day messengers' services.
New Brunswick ranked the highest in operating revenue per establishment followed by Quebec
and Ontario when the total revenue generated in each province was divided by the number of
establishments registered in each province. Figure 5 also reveals that British Columbia lags
behind Manitoba, Alberta, and even Newfoundland and Nova Scotia in terms of operating
revenue per establishment. This suggests that the market is more fragmented in British Columbia
and may be more concentrated and efficient in New Brunswick.
Difference in business models
The industry is primarily divided into couriers and same-day messengers, and a
comparison of their revenue streams and expenses reveals the structural differences between the
two main categories of this industry. Table 5 presents a breakdown of revenue and expenses for
couriers and local messengers. It is interesting to note that salaries, wages, and benefits are the
most dominant expense for couriers, whereas it is not the same for local messengers. These
differences suggest that the largest expense for local messengers constitutes purchased services
representing the outsourced component of their business.
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