Overnight air shipping in Canada (CargoJet, Skylink, etc)

[maebach]

Hi there,

This is my first post on this forum and I am in need of help. I am a 4th year business student at Wilfrid Laurier University and have a few questions regarding overnight shipping. I have a project on CargoJet where I need to find their marketshare and growth opportunities in their industry. Now, they compete in overnight priority shipping for time-sensitive clients and their direct competition is Skylink (which is privately held) and Purolator (I believe). It's very difficult to find information on this market size so I was hoping someone here would know something about it. I have tried the library and even called the Transport ministry to ask about policies regarding Canadian domestic air shipping.

All help is appreciated,

Thanks!

[doorhandle27]

Cargojet is a publicly traded company who competes domestically with Kewlona Flight Craft, on behalf of Purolator and Canada Post, and Morningstar, on behalf of FedEx.

I don't believe Skylink is a direct competitor of Cargojet's as Cargojet owned and operated Skylink under the Prince Edward Air banner for a couple years, along with Georgian Express. Cargojet Regional was formed after the company purchased these three regional companies in 2008, or maybe it was 07, can't remember now. CJ Regional was sold off a couple years later and Cargojet got out of the regional market.

I'm not sure what CJ's market share is in Canada as they have fluctuated up and down over the past years after the 2008 market crash and the introduction of widebody aircraft at the company. You may want to call them or even visit their head office in Mississauga to find that information, like I said, they are public. I'm pretty sure TC does not keep an sort of records or information as to the business side of the company. A visit to www.cargojet.com will provide all of the financials since their IPO.

Have fun.

[maebach]

Thanks for the help doorhandle! As for having fun, this project most definietely isnt....

[CL-Skadoo!]

Skylink is a turboprop feeder for many of the large cargo operators in Canada, it just depends which contract they are flying for. Your UPS parcel, for instance, goes from Vancouver to Hamilton on cargojet then is delivered to a place like Sudbury on Skylink Express.

[boeingboy]

Cargojet is a publicly traded company who competes domestically with Kewlona Flight Craft, on behalf of Purolator and Canada Post, and Morningstar, on behalf of FedEx.

Not true. Cargojet really doesn't compete with anyone. Except maybe the major airlines.

KFC and Morningstar are completely different animals than cargojet. They operate for a single customer and that's it. In fact - that customer owns the aircraft they use. Purolator and Fedex are express overnight delivery services - who compete with each other. No-one else will every carry their stuff (there are exceptions to this)

Cargojet operates with General freight forwarders. Got 2 tons of brake disks to send to Toronto for Lordco? You send it through a freight forwarder - not Fedex. The freight forwarder will gather general freight from anyone and everyone untill the airplane is full (or his share of the airplane) and then it is all loaded and sent on it's way.

Compareing Cargojet to Morningstar is comparing apples to oranges.

[doorhandle27]

True but all 3 cargo airlines still go after each other's major contracts when they come up for bid. So although they are run very differently and cj is indeed a freight forwarding company, there is still competition there. Either KFC or Morningstar took cj's gm contract to yeg a couple of years ago and KFC has gone after after other cj contracts in the past to fill remaining space.

[skypirate88]

Purolator does not own the aircraft Kelowna Flightcraft operate. I do agree however they operate very differently than cj

[DanJ]

It's also not true to say KFC flies exclusively Purolator and Morningstar flies exclusively Fedex. Every night, depending on space, you will see packages from most of the courier companies on a Purolator flight. There is also Puro freight being carried by Cargojet. Barry Lapointe is also a minority shareholder in Purolator, so he's also the customer and supplier.

[Pugster]

It's also not true to say KFC flies exclusively Purolator and Morningstar flies exclusively Fedex. Every night, depending on space, you will see packages from most of the courier companies on a Purolator flight. There is also Puro freight being carried by Cargojet. Barry Lapointe is also a minority shareholder in Purolator, so he's also the customer and supplier.

Sorry DanJ...while you've got some of that correct, KF does fly for Purolator only. It's an exclusive contract. What you're seeing when you see CJ, Puro, or FedEx cans on competing aircraft is deals that have been cut by FedEx or Puro or CJ (UPS, DHL), not by the carriers contracted to fly their freight. All of the freight companies do it - it's a way of maximizing efficiencies if they have only a small amount of freight, or freight that might get bumped - and the other carrier has room. Lots of side deals. So while their may be mixed freight on board the aircraft on any given flight, it's the customer who has dictated that, not the carrier.

Pretty much what you said, but I think it's an important distinction as (at least in the case of KF and Morningstar) there is one customer that we're loyal to, and we're not out there flying the competitions freight without their direction.

[DanJ]

It's also not true to say KFC flies exclusively Purolator and Morningstar flies exclusively Fedex. Every night, depending on space, you will see packages from most of the courier companies on a Purolator flight. There is also Puro freight being carried by Cargojet. Barry Lapointe is also a minority shareholder in Purolator, so he's also the customer and supplier.

Sorry DanJ...while you've got some of that correct, KF does fly for Purolator only. It's an exclusive contract. What you're seeing when you see CJ, Puro, or FedEx cans on competing aircraft is deals that have been cut by FedEx or Puro or CJ (UPS, DHL), not by the carriers contracted to fly their freight. All of the freight companies do it - it's a way of maximizing efficiencies if they have only a small amount of freight, or freight that might get bumped - and the other carrier has room. Lots of side deals. So while their may be mixed freight on board the aircraft on any given flight, it's the customer who has dictated that, not the carrier.

Pretty much what you said, but I think it's an important distinction as (at least in the case of KF and Morningstar) there is one customer that we're loyal to, and we're not out there flying the competitions freight without their direction.

You are correct, and I should have been more clear. KF sells the space to Purolator and Purolator fills it however they need to. There was a time, in the last several months anyway, that a Cargojet 767 was listed on Purolator's flight map (I want to say YVR-YHM, but am not sure). I haven't looked at that recently, so not sure if that has been replaced by a KF DC-10 now or not.

[L1011]

Sorry DanJ...while you've got some of that correct, KF does fly for Purolator only.

What about Canada Post?

[DanJ]

Sorry DanJ...while you've got some of that correct, KF does fly for Purolator only.

What about Canada Post?

Purolator is the middle man on that as well, as far as I know.

[Defy Gravity]

Canada Post owns 94% of Purolator.


http://www.purolator.com/dbwp/corporate_history.html

[DanJ]

Canada Post owns 94% of Purolator.


http://www.purolator.com/dbwp/corporate_history.html

Puro is still operated as a separate company. Maybe (likely) Puro had the inside track for the CP contract because of the ownership structure, but my point was, Puro handles the CP contract and deals with KF on it.