For more than five decades Purolator has been delivering packages into every part of Canada, and for the last 20 years it has been majority-owned by Canada Post. Now, the country's largest courier is entering a new era with the blossoming of e-commerce, as more and more retailers take orders online and count on third parties to ship their products to customers. Patrick Nangle, who took over the top job at Purolator in January, is leading the company into this new world, and also planning broader international expansion.
Your background is more in logistics than transport. What does that bring to Purolator?
The board was looking for a fresh approach. I am not a trucks and planes guy. I have been involved in the industry more from the point of view of a technology provider. If we look at the kind of changes that we imagine in future, application of technology will play an even stronger role than in the past. That is at least part of what I bring to the table.
How will you incorporate more technology?
[The key is] how to engage technology in our business to the benefit of customers. I'm thinking specifically about package tracking technology, and the flow of packages through the system. There is also a demand for more information.
Will you expand internationally?
Today we have an important presence in the United States. We have invested heavily over the last two years, and we have 30 branch locations. Our U.S.-based activity is the fastest growing part of our business.
We collect product from various places in the United States into large vehicles, and bring them up to the border. We manage the border and customs clearance and then inject those parcels into our distribution network in Canada.
That model works very well. The question is how we can replicate that model in other countries that are important trading partners with Canada.
What other countries would you like to move in to?
We are working through that right now. We have not really pinned it down just yet – whether it is China, Mexico or Europe. The work I'm doing with my team right now is defining the path forward – what that is going to look like over the next three to five years.
Given the shift to e-commerce, what are the growth areas for a courier company?
E-commerce has been a real stimulus for the movement of packages. It has allowed us to engage at a whole new level with our customers. Previously we were seen as a provider of pick-up and delivery services. Now the way [retailers] look at their e-commerce chain is different.
The delivery experience to the consumer is different than was the case with a bricks-and-mortar store. A lot of [retailers] are in the experimentation stage on how to manage package flows, and we are working through various kinds of solutions.
Does it essentially boil down to finding a better way to track parcels?
It is broader than that. Tracking is part of it, but with e-commerce the return of goods – and the movement of goods in the return process – takes on a whole new meaning. We are a proxy for the retailer, providing a key part of the whole experience.
There is also very important business-to-business e-commerce activity that we participate in. E-commerce has been a stimulus across the whole industry. Within that world there are a lot of possibilities to grow the business.
Does it still make sense for Purolator to be owned by Canada Post?
The current model works well for Purolator. We have a distinct brand and we were just ranked in the top 20 brands across Canada. But we do exist within the Canada Post group of companies. We jointly own an information technology services provider that allows us to do things on a different scale than we might have done otherwise.
There has been talk of FedEx taking an ownership stake in Purolator. What is happening there?
We are constantly looking at what relationships could make sense, but there is nothing on the table in regards to FedEx.
How is your progress in the shift to electric and hybrid vehicles?
Today about 20 per cent of our pick-up and delivery fleet is hybrid electric vehicles. You see those on the road today. We are experimenting with electric vehicles, and with so-called hybrid hydraulic vehicles [which use pressurized fluid rather than electric motors for power at low speeds].
We take the sustainability of our business very seriously. It is important to our employees, to our customers, and we want to be a good citizen.
Are there other areas where you can cut costs?
One area is fuel spending. We are just at the end of a pilot in telematics – bringing technology into vehicles so that we can reduce fuel consumption in our pick-up and delivery fleet. We get feedback from the vehicle on usage – acceleration, hard braking, cornering, idle time – and through that we get a better understanding of how the vehicle is being used, and then we can find ways to reduce fuel consumption.
What is the competitive landscape in parcel delivery?
When you are the market leader – and we have been for a long time – everybody else wants to take part of that share. We have some large and international competitors who invest heavily. However, we know Canada unlike anyone else. We touch every nook and cranny of Canada.
Where would like to take this company in the next five years, under your leadership?
The company will still be the market leader in Canada. The nature of what we do will be a little bit wider than what we do today. Beyond the pure traditional pick-up and delivery, we will provide a wider set of solutions to our customers. I see a strong willingness among customers to work more closely with us. The scope of what we do, and therefore the size of the business, will be larger, five years from now.
Title President and chief executive officer, Purolator Inc.
Personal Born in Kitchener, Ont.; 53 years old.
Education Business degree from University of Western Ontario, MBA from University of British Columbia.
* Joined Moore Business Forms in 1986, and was posted to The Netherlands and Switzerland.
* Worked for Swiss telecom company Ascom AG, which later merged with French company Neopost.
* Ran Neopost's postal and parcel logistics technology business in the United States, Canada and Japan.
* Worked as an executive at fleet management company Digital Dispatch Systems.
* Named CEO of Purolator in January, 2013.