The office is deserted. In the back warehouse, a few uniformed guys sit around a folding table, the empty space echoing with their voices. A business down on its luck? Hardly. The makeshift surroundings are actually a symptom of hyper growth. FleetOptics, the logistics firm that leads this year’s list of Canada’s Top Growing Companies, is still in the process of moving into its new, bigger headquarters, and on this morning in early August much remains to be done. A sprawling conveyor system for sorting packages is only half set up, and moving boxes line the walls. By mid-September, however, the operation must be humming; that’s when a major international retailer dramatically boosts its business with the company to handle up to 10,000 parcel deliveries daily around the Greater Toronto Area (GTA), expanding FleetOptics’ total volume by 70%.
FleetOptics specializes in so-called last-mile delivery, from a retailer's distribution centre to the customer's door—the hardest and most expensive portion, estimated to account for a least 30% of total transportation cost. It's also the most vital as, in the e-commerce era, receiving the package is often the only contact consumers have with a human during the transaction. FleetOptics' software makes the parcel's progress transparent for both business and consumer. Customers can track the driver on-screen as they might an approaching Uber car, avoiding that infuriating experience of the deliveryman arriving just after they jump in the shower. Retailers, meanwhile, can check packages' status in real time through FleetOptics' online portal. As co-founder Vince Buckley pithily sums it up, “Tesla is a battery company that also makes cars. We're a technology company that also makes deliveries.”
Buckley and John Mann, trucking industry veterans, started FleetOptics in 2015 as a delivery-management outfit, handling logistics for tire and medical distributors around Ontario. They developed software for optimizing delivery routes and tracking parcels, and realized the technology could help them leap onto the accelerating e-commerce bandwagon. By 2023, revenue from Canada's retail e-commerce is forecast to surpass $55 billion, up from $40 billion in 2018. This year alone, research aggregator Statista projects growth will top 10%. “Each Black Friday sets records for e-commerce deliveries,” says Mann. “The big guys like FedEx and UPS are maxed out. That creates an environment for companies like us.”
FleetOptics jumped in last fall, and the October postal strike was “our baptism by fire,” says Buckley, immediately ramping up business. Now the firm is considering expanding to B.C. What follows is 18 hours on the front lines of next-day delivery.
In the evening, clients send electronic manifests listing deliveries for the following day. When the freight arrives overnight, weight and size are confirmed by sensors on the conveyor system, boxes are barcoded and labelled, and FleetOptics’ software combines the various manifests into the most efficient driver routes. Each parcel is then sorted into its route—say, stop 36 of 110 on route 12.
A square-foot cube is the standard pricing reference, and overnight shipping is increasingly the norm. “Thanks to Amazon, our whole industry is going to same-day delivery,” says Buckley. Doing that costeffectively requires density, which in turn demands volume contracts with retailers. “The perfect scenario is, a vehicle makes 100 deliveries and travels less than 100 kilometres,” says Buckley. The company is still building up to this volume, and today some vehicles go out with 60 to 70 packages.
The warehouse is filling up with drivers and workers reviewing routes. In the office, Lorenzo Ramos, who trains new drivers on the software, pulls up a spreadsheet showing yesterday’s deliveries colour-coded as successful, undelivered or exceptions, then a map of current routes. Buckley stares at one static dot. “He’s in a bad traffic area—that car ain’t gonna move.”Supervisors can track drivers’ progress on the map, as well as their speed and daily productivity. They can also see when a driver is falling behind schedule and send another to help finish deliveries by day’s end (FleetOptics calls these “rescues”).
FleetOptics typically has more than 250 vehicles on the road each day, the majority driven by owner-operators on contract. The plan is to get to 2,000 shipments a day at this facility, then open another across the city to reduce “stem time” (the time from warehouse to customer location).
The sorted packages go into bins stacked on racks, which the drivers then wheel over to their vehicles for loading. The 25,000-square-foot warehouse has five drive bays. In the morning, vehicles form a conga line, 20 at a time (each allotted a spot painted on the floor); drivers turn off the engine, load parcels, download the route onto their phones, then get a five-minute “pep talk” from a supervisor. The process should take no more than 20 minutes, says Buckley.
Harry Shivs, an amiable Sri Lankan immigrant who is one of FleetOptics’ first employees, is getting ready to do a short 30-package run to Brampton in one of the company’s two new points of pride: Hyundai Kona hatchbacks (with the back seats removed for packability). They’re covered in Sephora insignia, as the cosmetics company is the first to sign up for clientbranded vehicles—a FleetOptics innovation. The deal fits into FleetOptics’ sweet spot: Sephora ships more than 2,000 packages daily in the GTA, and its parcels tend to be small so many can fit into a small van. Given sufficient volume of business, FleetOptics is happy to tailor its service. “We’re small enough that we can say, ‘You don’t have to fit in our box, we’ll make a box that will fit you,’ “ says Buckley. He sees this customization as only the beginning: Cars could be outfitted with barcodes, for example, so passers-by can click and get a coupon. “I’d have a mascara car! I’d make it fun!” he enthuses.
The two Konas boast another important feature: They’re electric. FleetOptics is also awaiting delivery of five electric Kia Souls and would buy more if it could. “Honestly, we’re lucky to get these,” says Buckley. “The government is buying them all up. As soon as the market allows, we’ll go all electric.” The Konas have a range of 350 to 400 kilometres, which amply covers a typical route, and promise $2,000 of savings on fuel for every 20,000 kilometres travelled.
Shivs fiddles with his phone. He’s testing a new model today, as the company is considering switching from LG to Samsung smartphones if they prove faster at pulling up map data. Shivs is a dispatcher now, but he still does a run once or twice a week, with a typical daily route having 80 to 90 deliveries. “It’s the best job,” he says as he drives north toward Brampton. “No boss, and you can take breaks when you want.”
Shivs wears a FleeptOptics hat and vest, but it’s the car everyone stares at. As one woman signs for her package, she asks, “So, you’ve started doing your own deliveries?"—clearly assuming it’s Sephora at her door. Such direct connection to the customer is potentially very valuable to brands, which increasingly must go through middlemen like Amazon, but it raises the pressure on delivery people to represent clients in a way that leaves consumers with a warm glow. FleetOptics can help retailers extend that contact further by, for example, adding notifications about sales to the texts alerting customers of their packages’ ETA.
FleetOptics delivery is a precision operation where every moment counts—and is digitally logged. During loading, drivers organize the boxes in order of delivery so they can grab them quickly when they pull up. Upon arrival, Shivs walks to the door, rings the buzzer once (multiple rings can irritate residents), waits 15 seconds, knocks and, as he waits, starts looking around for a place to stash the package if the customer has not indicated one. The rule is that the parcel can’t be visible from the street but must be easy to spot for recipients who don’t want to play hide and seek with packages. The porch mat is a pet trick: Though a package placed under it protrudes, a passerby can’t see what’s on the box. After 30 seconds, Shivs usually leaves the package and a notice of delivery attempt, snaps a photo of the parcel’s location and, as he walks back to the car, queues up the next delivery on his phone so he can start driving immediately.
Google Maps is a deliveryman’s primary tool, but it’s fallible—especially in new residential developments (of which there are many in Brampton) that have yet to be accurately geotagged. Several deliveries take Shivs to locations where Google pauses, unsure, forcing Shivs to search for the address manually. Still, such suburban challenges pale in comparison to those downtown drivers face. Parking, for one. “We’re a great customer for the City of Toronto,” says Mann sarcastically. On the upside, downtown deliveries are more tightly concentrated. FleetOptics has several “downtown specialists,” says Shivs, who personally always shuns those runs.
A driver’s biggest headaches, not surprisingly, are weather and traffic. “Every hour is rush hour now,” sighs Shivs as he grabs a drink at a Dairy Queen. FleetOptics is looking into using artificial intelligence and machine learning tools to get predictive intelligence on route conditions. By mining postal code data, it could also identify dense delivery pockets where it might be more efficient to send a large truck with three guys who then deliver on foot.
But some issues resist technological solutions. Now that he’s a dispatcher, Shivs deals with drivers’ problems—mistyped addresses, flat tires, missing entry codes to apartment buildings. Once, however, he got a call from a driver who was bitten by a pitbull, requiring an ambulance. These modern postmen take “beware of dog” signs seriously; in fact, Shivs won’t even enter the yard of a home that sports the sign on the fence. In houses with vestibules, he rings the doorbell inside but then steps onto the porch to wait. “We never know who or what will come out, so you want to have a clear exit,” he says.
On the drive back to the office, Shivs muses that his could be the last generation of delivery people before driverless cars, drones and other innovations take over. “I heard on the news that flying cars in Japan have already started,” he says. In San Francisco, Starship Technologies has begun delivering food and parcels using robots, while Zurichbased Anybotics hopes to combine autonomous vehicles with robots that descend at the destination, ring the doorbell, then return to the car to recharge.
As technological solutions power ahead, Buckley and Mann know they can't stand still. Amazon's tracker now has similar features to FleetOptics', pushing them to innovate. “Our software is never complete,” says Mann.