Wednesday, December 15, 2010

Increased Competition in the US Parcel Market

Yesterday, Transforce, Inc., one of Canada's largest transportation companies announced that it had reached an agreement to purchase Dynamex, North America's largest same day courier.  The purchase will more than double Transforce's revenue from parcel delivery with its total North American revenue after the acquisition running around $800 million U.S.

With this purchase Transforce now owns five companies that provide parcel delivery services in the United States and Canada.  
  • Canpar - a traditional parcel carrier focused on business-to-business services with its largest market share in Eastern Canada
  • ICS Courier - an express carrier serving all major markets in Canada.   ICS Courier's service description suggests that it service centers around fixed routes with consistent pick-up and delivery times.
  • ATS Solutions - a parcel carrier that specializes in the logistics needs of brick ad mortar retailers in Canada
  • ATS Health care - a parcel carrier that specializes in the unique needs of delivering drugs and other medical supplies reacquiring special handling to pharmacies, hospitals and medical clinics in Canada.
  • Dynamex - a same day parcel carrier that manages two distinct parcel delivery businesses.  One business provides an on-demand delivery service which may include regular and one-off pick-ups and deliveries. The other provides a dedicated fleet for a single customer's parcel delivery needs.  Dynamex also provides same day delivery for Amazon in selected markets.
 The breadth of services that Transforce's parcel companies offer illustrate that services required by shippers go beyond what traditional parcel carriers offer.   The services that these companies offer illustrate just a couple of examples of how small companies can take market share away from much larger competitors by focusing on the specific needs of an industry or customer.

The combination of these five companies along with Transforce's extensive less-than-truckload service in Canada and business relationship with Estes Express should give shippers with trans-border parcel distribution needs more options.   In addition, Transforce's should be able to reduce Dynamex's overhead through combining back-office operations and eliminating duplicate information systems which should improve its margins and allow it to expand its footprint in North America.   

1 comment:

UK Delivery said...

Now parcel market is increased in US. Parcel post is a service of a postal administration for sending parcels through the post. Thanks for this new post.