challenges facing express delivery services in canada's urban centres

Institute of Housing & Mobility
Challenges facing the EDS industry in Canada's urban centres
business accounted for 14% whereas only 6% of the revenue generated by the same-day
messengers was for the second-day and other service segments of their businesses.
A breakdown by the number of packages or pieces delivered in 2005 by the select 339 courier
establishments reveals that 49% of the pieces were next-day or overnight services and another
51% of pieces were for second-day and other services. Of the 182 same-day messengers
earning more than $1 million in revenue, 78% of pieces delivered were for same-day services
and the rest accounted for roughly 22% of the business.
Table 8 also reveals significant differences in the revenue rates generated by couriers and local
messengers. In the same-day service category couriers earned $12.40 per piece whereas local
messengers earned $7.70 per piece. This suggests that local messengers are almost 40%
cheaper than couriers in the same-day service category. In the next-day overnight service
category, couriers earned $10.50 per piece whereas local messengers earned $7.90 per piece.
Again, local messengers are cheaper per piece than couriers in the next-day/overnight service
category. Finally, for the second-day and other service category, couriers earned $6.70 per
piece whereas local messengers earned $5.60 per piece. This suggests that local messengers
compete more aggressively in price for second-day/other services, even though it represents
merely 6% of the revenue earned by local messengers for second-day/other services.
A breakdown of the origin of shipments is presented in Figure 6. Ontario continues to be the most
dominant origin for pieces carried by couriers and local messengers. The courier industry is more
concentrated in Ontario than the local messengers. It is interesting to note that the Prairies and
British Columbia represent a relatively larger share of the local messenger business than that of
the couriers. A breakdown of shipments by destination is presented in Figure 7, which reveals that
80% of pieces carried by couriers are destined for Canada, followed by less than 20% of their
shipments destined for the United States. A very small percentage of pieces carried by couriers is
destined for the rest of the world. The local messenger industry, however, is predominantly
serving Canadian destinations with 100% of the pieces carried by local messengers being
delivered within Canada.
Couriers Local Messengers Total
60
50
40
30
20
10
0
Maritimes Quebec Ontario Prairies British
Columbia
Origin
outside
Canada
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