Volume 7 | Issue 5 | Year 2004

There are many challenges inherent in being a courier in Canada, not the least being a sometimes-harsh climate and a rugged environment that is at once scenic to behold and difficult to confront.

It is a matter of course for Purolator, Canada’s largest shipping and distribution company, to not only behold and confront, but to conquer. And it does this with a fleet of 5,000 vehicles in 98 locations and a dedicated employee base of 12,500. Specializing in ground and air logistics and other special services, with a niche in handling of big bulk freight, the company counts among its many customers major Canadian manufacturers, including automotive OEMs and suppliers.

It is an operation that not only runs lean and mean but, very soon, will also be clean and green through a joint venture established with Hydrogenics Corp., a move precipitated by an earlier partnership with Azure Dynamics Corp. of Vancouver for the purchase of up to 2,000 hybrid electric vehicles for the Purolator fleet. This order with Azure Dynamics not only made Purolator the first courier company in Canada to begin the transition to hybrid electric vehicles but brought the need to reduce greenhouse gas emissions to the fore of Canadian – and perhaps ultimately American – industry.

“After completing months of field testing with Azure-equipped vehicles, Purolator saw green house gas emissions reduced by up to 50 percent while fuel efficiency increased by up to 50 percent – this represents a significant cost saving for the company while helping curb environmental emissions,” explains Executive Vice President Ray Pedersen. ” If the experience with these vehicles lives up to expectations, as Purolator replenishes its fleet each year the company may add up to 400 hybrid electric vehicles annually beginning in 2005.”

By November this year, Azure Dynamics will deliver the first order of 30 hybrid electric vehicles (HEVs) to Purolator. Five of these will actually be delivered in August or September. These HEVs will combine diesel and hybrid electric power trains as this is the first part of the longer-term vision of developing a zero-emission fleet.

Once delivered, the new vehicles will be used by Purolator as delivery trucks on roads in Toronto.

Purolator is now taking this project to the next level through a new deal with Hydrogenics Corp., allowing Purolator to completely eliminate environmental emissions from its vehicles and lead the industry to a future standard of zero vehicle emissions, Pedersen says. Purolator, he adds, has committed to the development and demonstration of a zero-emission fuel cell hybrid electric vehicle (FCHEV) and an on-site hydrogen production, storage and refueling/dispensing facility. “This represents the first-ever end-to-end hydrogen fuel cell application in a fleet environment where hydrogen is actually produced and stored at the facility,” Pedersen explains. It is a multi-year initiative that is estimated to cost $3.08 million (Cdn).” The initiative is made possible through an agreement with Hydrogenics Corp. and with $1.54 million in support from Natural Resources Canada (NRCan).

This venture will allow the Purolator to break ground on many new fronts, notes Pedersen, including the actual demonstration and deployment of the FCHEV curbside truck and hydrogen fueling station along with safety training; the development of codes and standards, and the education of employees, customers and the general public regarding the utilization of this zero-emission green technology.

Once the hydrogen energy is produced it will be held in a new storage facility. The hydrogen would then go through to the refueling station to refuel the hydrogen cells in the delivery trucks. From April to October this year, Purolator will also be:
• implementing the necessary Hydrogenics machinery to create the hydrogen fuel
• developing the hybrid fuel cell battery vehicle
• building the storage facilities for the hydrogen fuel
• building the refueling station that will take the hydrogen from storage to the trucks.

Many silver linings
What else would you expect from a company that was among only 24 in the world to win the Ford Silver Excellence Award in 2003? This honor is given to suppliers that excel in quality, delivery and cost. Purolator has had the distinction of being in the high 99-percent range in all three.

“One of our key strengths and competencies and one customers definitely comment on is our ability to be efficient and reliable,” Pedersen adds. “We have the largest network in Canada, and the largest coverage north of the U.S. border. We cover every province in Canada and the Northwest Territory.”

Indeed, Purolator not only has its bases covered, but also the entire playing field. Its enormous fleet includes 104 vans, 249 PDVs, 2,774 curbsides, 92 straight trucks, 322 highway tractors, 35 yard shunters, 801 trailers and 673 pieces of GSE/airport ramp equipment.

It has come a long way from its early days as Trans Canadian Couriers, Ltd., founded Dec. 5, 1960 as a subsidiary of American Courier Corp. Then, it boasted a staff of two, and operated in the heart of Eastern Canada, with restricted operating licenses for the provinces of Ontario and Quebec. In 1967, U.S.-based Purolator Filter acquired control of both companies. On Jan. 1, 1973, the name was changed to Purolator. The company’s fate changed again on April 29, 1987, when Onex Corporation and others purchased Purolator’s Canadian operations. As a result of the acquisition, Purolator became a fully Canadian owned corporation.

Through the years the company has made significant advances in its industry but the most notable have taken place in the aftermath of Sept. 11, 2001, a tragedy that prompted Purolator to make significant strategic decisions about how to run its business.

“We came through the disruptions that followed Sept. 11 in part because we have the largest air and ground networks in Canada and as such were able to utilize whichever means reached the customer the quickest,” notes Public Relations Manager Ed Borkowski. “Our competitors who do not have the same assets available in Canada were severely impacted for a number of days.”

The company, says Pedersen, streamlined and re-designed processes and facilities to ship packages faster; as an example, buildings were re-designed to allow all indoor loading, to lessen the impact of bad weather. “We have also been investing in carefully selected technology like GPS for our trucks, route optimization for better route planning, ARC technology for improved package scanning and accurate billing, and wireless scanners for our couriers, so that tracking and delivery information about packages is captured instantly at the pick up point,” he adds.

So successful were the changes, he says, that employing route optimization technology alone has resulted in a 6 percent productivity gain in courier stops per hour and significant cost savings. Despite the post-Sept. 11 economic uncertainties, Purolator further boosted its operating profits by $64 million; improved its net income by $39 million and increased its cash flow from operations by over $75 million.

Further changes are expected to bode just as well, such as the expanded use of on-board computers for trucks. “This high-tech initiative means we will have better, more current information on the location and status of trailers, improving service reliability to major bulk customers,” Pedersen maintains. “We are also working on implementing a new dispatch component linked with route optimization permitting customer pick-up requests to be dispatched to the closest courier. This means couriers will be able to fit pick-ups into their delivery cycle, reducing response time for pick-up requests.”

Purolator offers a range of other specialized services, such as same day express cheque, dangerous goods handling, oversized package handling, retail totes, Chain-of-Signature service, high value service, Saturday service, U.S. deferred service, U.S. overnight service, international express service, third party logistics services, customs brokerage, and returns management. Operating Canada’s largest dedicate air express fleet and the most extensive service network in Canada enables couriers to deliver to more places in Canada than any other courier by 9 a.m. and 10:30 a.m. – and that’s a Purolator guarantee.

e-fficient management
An additional enhancement to its range of services is its e-commerce tool offered through three applications, including Purolator Shipping System (PSS) service, Purolink, and Purolator.com – Purolator’s online shipping system allows customers to automate all their shipping needs including preparing, pricing, shipping and tracking shipments. This e-commerce business generates more than $500 million annually and accounts for 60 percent of Purolator’s business.

Purolator’s e-commerce offering is constantly monitored and updated to provide customers with the most up-to-date service functionality and enhanced ease of use. For example, earlier this year the company began rolling out new e-returns, or automated reverse logistics services, for customers. This is a new solution space that enables companies to realize increases in profitability and customer satisfaction by controlling the processes involved in moving returned products and information backward through the entire supply chain. By automating each step of the process, there is a corresponding savings of up to 73 percent according to Gartner Research estimates (2002 GartnerG2). For Purolator’s customers a returns management system does the following:

• authorizes returns on-line and notifies customers of the RMA;
• allows customers to print their own shipping label;
• provides automated e-mail messaging and allows customers to check the status of their return on-line;
• reconciles and applies credit faster;
• provides them with full disclosure of the status of their return;
From a B2B perspective, a returns management system:
• automates the return process to reduce costs and potential human error;
• provides customers with detailed reporting and analysis;
• helps customers evaluate new product quality and their customer return habits;
• helps customers develop effective returns strategies, manufacturing and inventory processes;
• helps reduce crowding in their warehouse;
• reduces discrepancies between suppliers and customers.

In addition, last year Purolator rolled out the most sophisticated end-to-end wireless data solution enabling quick and reliable shipping information for Purolator customers across the country. The industry-leading Rogers AT&T Wireless GSM/GPRS network enables dispatch and field personnel, supervisors and over 4,000 on-road Purolator couriers across Canada to synchronize and download real-time information to their wireless handheld scanners. Purolator customers benefit from an improved tracking system that enables monitoring of packages from the time they are picked up to the moment they are delivered, all in real time.

“We respond to the logistics needs of our global customers who conduct business in Canada,” Pedersen says, adding Purolator manages Canadian logistics and supply chain delivery for Dell, Toshiba, Ford Motors, Honda and Nintendo.

For U.S. customers shipping frequently to Canada Purolator Courier operates Purolator USA, which delivers to more destination points within Canada than any other distribution company out of the U.S. “We offer expedited package delivery and expedited LTL and truckload services to Canada and within the U.S.” Pedersen says. “We offer complete end-to-end solutions, and we can help eliminate border slowdowns, so that U.S. distribution centers can become virtual warehouses for sales in Canada.”

Purolator Trade Solutions
Compliance with border security and reliability in transporting shipments cross border have become critical factors in the shipping logistics process. “As a result, we recently entered a joint business venture with PBB Global Logistics Inc., of Fort Erie, Ontario to create a new company which provides Purolator customers with highly secure, fully compliant reliable customs brokerage services,” Pedersen says, adding, “For some time, and particularly post-9/11 and the Iraqi War, our customers have been asking for more secure, easier ways to move their shipments across borders and demanding full compliance with border regulations. This new venture means we can now provide our customers with highly secure, fully compliant reliable customs brokerage services. We are the first major Canadian-owned courier company to add advanced customs clearance and trade and regulatory services to its corporate offerings.”

While all of these value-added services and capabilities have enabled Purolator Courier to maintain a leading position in Canada as a shipping company that has pioneered a series of “firsts” in its industry, there is one other reason for Purolator’s continued success.

“We’re unique because of our people; we spend a lot of time developing and training our personnel” and many of these individuals have established long-held relationships with the customers who rely on their expertise, Pedersen says. “Looking to improve our own quality as well as our customers’ operations has been a big part of our culture.”