Welcome to Outside the Box with Ascendia.

Usa a podcast educating US based e tailers on international shipping topics and how they can expand their global e commerce footprint.

Yeah.

Hi everybody, this is John Walsh again here with my partner Nick Agnetti.

We're excited to bring the second in a series of our podcast called Outside the Box focusing on e commerce shipping in North America to and from Canada.

Within Canada today is our main topic.

We have a special guest joining us today, Dave Mays, CEO of Broadreach and Ascendia company.

For this part of our conversation, before we get into the main topic, I just want to give a little brief bio on Dave.

Dave brings two years of dedicated experience in a cross further e commerce logistics with a specific experience in developing best in class solutions the retailer selling through Canada.

Dave has a wealth of knowledge and had the opportunity to work with Dave over the last two years.

Dave has a wealth of knowledge about Canada that's I think unsurpassed.

Right Nick and anybody else I've lived quite frankly by, by far right.

He has a special focus on market leading across quarter with a special focus on us to Canada.

Although Dave will talk about, he has also the ability with his product offering to do intra Canada which I think is something that is important to remind all our customers about as well.

Dave works with us closely on all our opportunities working on Canada.

Dave's background and knowledge has been paramount to our success of growing our business in Canada.

Hello everyone and let's see if Dave can introduce himself.

Dave.

Hello everyone.

Did you say two years or 23 years?

Oh, 20 years.

I'm sorry, 20 years, right?

Something like that.

Something like that.

So well, let me jump Dave.

Let me just jump in real quick.

I want you know.

Hello everybody, it's Nick Agnetti.

I hope everybody's having a wonderful day and month.

And so with Dave on, Dave is the best resource I've ever encountered when it comes to Canada.

So I'm very excited that he's on with us today not only to talk about, you know, Ascendia's northbound service option with our DDP network into Canada, but just the Canadian delivery market in general and what he's been doing, he and his team, the optimizations they've been doing and just really helping to improve delivery options into the nation of Canada.

So Dave, yeah, let's, let's take it away.

And Dave, one of the topics we want to talk to you about was.

When you get on the phone or.

Teams or whatever, we're interacting with our client, you always Talk about a lot of the challenges that you see of E Commerce shipping into Canada and into Canada.

And is there any like the customer feedback that you've been with us that is standing out more than others that you're seeing as an issue like clearance, customs, cost, transits, visibility, anything in there that stands out more than others that you want to talk about With Star.

I could talk about Canada for four hours straight if you are so inclined to listen for that long.

The reality is Canada's physically bolted on in the same continent right next to us, here in the US and it is the first, best next international market for virtually every retailer that ships out of the us.

Once you learn how to identify, create demand, filled out the supply chain with partners and ultimately get those packages delivered, then you start looking at other markets, other contents.

The supply chains are very, very different.

We can effectively cover Canada over the road or through ground options anywhere between 1 and 7 business days to 90 plus percent of the country.

And there is a similar divide east and west in Canada as there is in the US about 75%, sometimes 80% of the orders, but about 75% of the population is east of Manitoba.

And Then the other 25 to 30% of the population is west E Commerce orders.

Generally depending on the merchant, you're going to have a little bit lighter delivery profile to Quebec.

Quebec is French speaking.

If you create French speaking site you can identify, generate demand and be highly successful.

It's about 23% of the population we see about 10% of the orders go to Quebec for standard US cross border shippers.

So effectively that's where that 70, 30 comes in.

With that being said, between the east and the west are what they call prairies.

And that's just you can see your dog run away for about a week and you'll still be able to see that's how flat it is and that's how far and it's.

And it's cold.

And you know there's lots of geographic challenges in serving Canada, but there are some pretty interesting profiles related to the population and where they're located.

About 80% of the Canadian population is within 100 miles of the US border.

But again if you look at how long that border is, you're still talking about significant east to west mileage.

What has changed?

And you've been in this business a long time with Canada, has anything changed on a customer focus or let's take it from a consumer and then maybe from a shipper.

There's two different things, right?

So what from a Consumer in Canada.

Has anything changed in the last 20 some years?

You've been doing this?

For sure.

There's no doubt that the branded fully integrated B2B retail and B2C couriers in Canada, including the big integrated couriers here, FedEx, UPS, Purelator is the largest integrated courier in Canada and there was a significant preference for a delivery with any of the large integrated couriers.

I think that was a 20 year ago philosophy that has E Commerce has changed the expectation, residential surcharges, delivery area surcharges.

There was lots of surcharges associated with the integrated couriers getting to Bonnemile residential addresses.

They have changed for the better and the market has also changed from the expectation of alternate delivery providers.

So technology has really allowed both us as a consolidator and forwarder to provide as good if not better tracking experiences than the integrated courier.

So we're able to end to end not only management from a communication and transportation standpoint, but the visibility is outstanding and the customers really know and are comfortable with the expectation of delivery through a delivery partner.

Going back to one of your first questions before we, you know, can provide solutions to any of the needs that growing and or already established US detailers would have, it's important to understand whether they're doing business casually or whether they're doing business formally in Canada.

And there's a variety of questions that we would ask, get those answers and decide which track we're going to talk about.

Solutions for transport, delivery, cost effective and the like.

That's caused a custom clearance, right, that you're talking about?

Yeah, it really is.

It gets into, it gets into accounting, it gets into business registration, it gets into provincial registration of taxes, it gets into product registration, gets into other government departments that might require you to perform certain acts.

You know, Agriculture Canada, Health Canada, the Natural Health Product Directorate.

So whether we're doing business formally or informally is really the big first question.

And if we're doing business informally through the what we'll call the courier stream or the casual stream, there are some things that we need to adhere to.

You can't exceed 3300 Canadian per day per order per consignee without exceeding that commercial threshold that we're trying to stay below.

Goods cannot be for resale or retail sale and depending on the product there's a 90 day supply per order restriction from the casual stream.

The import of record in the casual stream is the consignee in Canada, not the shipper.

So there's some advantages to that.

There's some challenges to that depending on if you're omnichannel or you just do USC Commerce Export.

Dave, I'm going to jump in real quick.

So just for everybody listening, I want to reiterate once Dave gets going, it's really, it's, it's hard to get it, get that machine set up in there.

And so he's not as long winded as you.

I'm not sure about that.

I'd say we put each other on the mic and let it, let it ride.

But, but more importantly is when, when I in previous episodes, maybe in the beginning of this one, John might have spoke through but when we say Dave is a breadth of knowledge, he knows more about Canada than anybody I've ever come across.

And so it's just an absolute asset for us as an organization to have Dave here too.

And our goal, this podcast is not necessarily we're not here to just simply promote Ascendia services only, but it's really to inform as well in terms of, you know, if you have one.

Canada's the 11th largest e commerce market in the world.

You know, if you're not doing business in Canada.

Michael, question to you from my perspective, and this is more customer facing perspective is well, why not and let's start there and figure out whether it's a mind shift thing, if it's a mindset issue or if you're, if it's just something well or we don't know if our product can get there.

We don't know it.

Just talk to us about it.

We would love to be able to explore those opportunities with you and more importantly, having Dave in the background of just being able to say, hey, any question I have I can, you know, ask Dave and his team, I mean anything.

It could be, you know, from as simple as hey, this is a face wash too.

Is nitrogen considered an aerosol and what are your thoughts on us hitting that up with an airplane?

Probably not great, but we're still going to ask the question to figure out.

What we're going to be able to.

Do intra Canada once we get across the border via ground transport.

So Dave, I have a question for you.

So one of the big themes that that I've been discussing with customers on a customer facing meaning talking with the online retailers, the subscription boxes is the focus of the customer experience.

I do want to talk a little bit specifically about what you've created, you and your team created with the Broad reach network and how you guys are able to improve the customer experience over let's say Something like a, an integrated career like the FedEx or DPS or even.

You mentioned Purelator.

Could you talk to that for a couple minutes?

Yeah, it's a little bit of a, of a careful description.

And the reason I say that first off there's no formulas in shipping.

There's nothing that's proprietary.

There's nothing that we're doing that is an invention of some cutting edge service that no one's going to be able to replicate.

But there are some best practices and some things that we do with our transport network.

There are some ways that we clear customs, all forward thinking and compliant.

There's bond utilization, there's all sorts of cross docket partner network connecting that we do to achieve the outcome that we have.

And we want to continue to describe that.

We want to continue to have merchants trust us and we want to continue to beat the competition in terms of service quality.

At the end of the day we have the fewest number of touches, the fewest miles or kilometers traveled and the lowest cost, most efficient network after two years for us to Canada straight away.

Now some of that is related to our size.

We don't have trains, planes and automobiles that are running all over the North American network like some of the large integrated couriers.

We were very surgical, we were very precise in how we set up the network and we did it based on a post Covid era which is eh.

We'll just say was a little.

Things were getting a little bit frothy in there in 2122.

So a very fresh approach.

We really focused on middle mile, we focused on middle mile speed.

We focused on getting to all the major cities in Canada whether it's ground or air.

We have a fantastic partnership with Air Canada that reaches anywhere between eight and 12 major cities in Canada for an expedited product that's been very successful.

We're working with these alternate delivery providers moving times around to have preferential Service picking up 12 days depending on the province, depending on the US origin shipping point.

Again all end to end in terms of not only custody but also visibility and transparency to those packages.

The customs clearance process probably don't want to go into too much detail on this because you will definitely bore the listeners.

But we have automated it entirely.

We have bonded trucks and bonded facilities.

We do an electronic release and anytime there's an inspection we rifle through what we call, I guess containers that are, that are marked with those parcels.

We pull the whole, the held parcels and everything else flows through.

So even if there are inspections or holes or delays, it only would affect the small, the parcels that will be targeted.

So we've built operation technology and a system to we think compete with even the express carriers.

I mean, some of the markets out of the US that we're getting service into, Greater Toronto and or eastern Canada out of the Northeast in the US are faster than you could get if you actually flew it on a plane that went through Memphis or Louisville and had a delivery by a, you know, purple tail or a brown van.

So can you just go into a little further?

They were using a, one of their big integrators, one of the big three and their clearance process is different than yours.

And we, we explain to the customer, hey, we don't hold the whole shipment.

If there's an issue with one of packages, the other stuff goes through.

Can you just dive into that a little bit?

Because I think that's something that a lot of customers are unaware of with the big three versus what you're doing.

Yeah.

Generally speaking.

Generally, yep.

Generally speaking.

Each package clears customs on its own through an integrated courier network.

They clear on a courier low value shipment basis.

Right.

They require, they require less data than we do for the clearances that we perform.

They have some special arrangement with airport and customs authorities.

But at the end of the day they're highly accountable for each of those packages and they handle them individually, whether it's having a second customs label or a commercial invoice generated.

So it's very expensive for the couriers to handle individual E commerce parcels going to any country, including Canada.

If you ship to Ecuador or you ship to the UK or you ship to Canada with the large integrated couriers, oftentimes they're processing them the same.

Because of that additional cost that processing that fees and touching it, there's a lot more costs associated with the big three carriers and what they're assessing to the customer.

Right.

And what, I mean, that's a big deal.

What the, what the integrated couriers can do on the other side of the coin to some of these exotic international markets is amazing.

I really respect their end to end infrastructure, the scheduling, the operations, but it's very expensive.

It's a lot of overhead that you have to pay for and there's a lot of processes that are very rigid and they do have consolidations.

UPS, FedEx, DHL, E Commerce.

Outside of the DHL Express network, they do run consolidation programs, but they're not as agile, they're not as efficient, they're not as cost effective, they're not as good.

So really you're kind of talking about kind of a canyon.

On one side you have the integrated hot fast courier service, which is good, right?

Expensive.

We just talked about that.

And then you have their, their version of consolidation.

We're much closer in service and service quality to the express courier, in some cases better again, depending on where we're shipping from and where we're going to.

In Canada, you know, one of the things that, you know, we specifically target, right.

More of your direct consumer brands.

Apparel, skincare, health and beauty, health and beauty, Nutraceuticals, you name shoes, et cetera.

You know, and there's, there's often a mindset out there about, you know, oh well, you know, we don't ship heavier package weights for over Canada or anywhere international.

Right.

And especially when you look at the, you know, global postal rules and you know, a two kilogram rule, you know, you've got male class versus parcel fast.

But that all goes away here with this network.

And now it's important to remind the listeners too, this is an entirely DDP network.

So one, our focus with this network is improved customer delivery experience.

But what would you say and you know, I know this is just speaking to our network and again we'll get back to, and we'll continue to highlight Canada, you know, holistically.

But in our network, in terms of package weights, do you see any challenges when you, you know, between 1 to 2 pounds versus, let's say, and I know we're breaking this down pretty granular but you know, four to five, six pound packages, any, any benefits, pluses, minuses, things like that.

There's no doubt that we're going to use different end delivery providers based on their capabilities.

The higher the weight and the higher the dimension, the more we're going to use integrated career partners, some of which we've already mentioned on this podcast.

The skull and crossbones kind of scenario for us at this stage in our network would be any one length exceeding 48 inches is really tough.

And if you layer on 66 pounds over that is a challenge.

And there are some cases where Canada Post is the best option.

And we use Canada Post extensively for rural residential apartments and P.O.

Boxes.

If it's over 37 or 39, I think 39 inches, it has a significant surcharge.

99.5% of the product that we're moving today with this fantastic ramp of volume with Ascendia is well within that.

Our average weight on a dimensional basis is somewhere between three and four pounds.

Our average weight on an actual gravity weight is one to two pounds.

And I expect that to go, I expect that to go up.

In my past life we had higher average weights of parcels.

But to be honest, in our transportation network, the efficiency of each of these trucks, we can get anywhere between 6 to 10,000 parcels per truck with the current profile of the Ascendia client base.

And we can really do amazing things when we have that level of efficiency on those trucks that that package count.

I agree.

So I think as, I mean, I don't want to, I don't want to get into moving furniture at any, any point in the near, near term here.

Moving up the, yeah, moving up the weight and dimensional scale a bit into items that are on average between 5 and 15 pounds and dimensionally between 10 and, and 25 is absolutely fine.

Our network can handle.

Our pricing is just as strong in relative terms.

Thanks everybody for listening to part one of our podcast about Canada.

Stay tuned for part two.

Be sure to subscribe and download our podcast.

If you want to learn more about today's topic, email us at e commerce usaasendia.com and check back frequently for new discussions on E Commerce shipping to Canada and worldwide.