Couriers and local messengers industry

The couriers and local messengers industry included 20,623 establishments in 2004, providing a variety of services, from letter delivery by bicycle messenger to high-tech equipment delivery in Canada and other countries. The number of establishments increased 1% from 2003.

The industry generated operating revenue of about $6.2 billion in 2004, up 7% from the previous year. Operating expenses totalled nearly $5.7 billion in 2004, up 6% from 2003. The largest increases were for repair and maintenance expenses (+10%), the cost of energy and supply (+9%) and the other purchased services (+8%).

The industry's operating margin, the difference between operating revenue and operating expenses, was $463 million, up 27% compared with 2003.

The North American Industry Classification System (NAICS) divides the industry into two segments: courier companies, which provide national and international delivery services, and local messenger businesses, which provide delivery services within a smaller region, such as a city or a metropolitan area.

While couriers accounted for only about 14% of the industry's establishments in 2004, they generated roughly 79% of the total operating revenues. Courier establishments had an average operating margin of about $130,000, up 25% from 2003.

Local messengers, on the other hand, accounted for 86% of the establishments but only 21% of the industry's operating revenue. They had an average operating margin of about $5,000, down 14% from 2003. This segment's modest operating margin is mostly due to the fact that self-employed individuals are more prevalent than salaried employees.

The largest expense item for couriers was wages, salaries and benefits (39%), followed by other purchased services (36%). The picture was very different for local delivery services. Their largest expense item was other purchased services (53%), which made up a much larger portion of total expenses than the second-largest item, wages, salaries and benefits (22%). This situation seems to show that couriers tend to have paid employees while local messengers made more use of self-employed persons.

Large- and medium-sized courier and local messenger firms (those with revenues of $1 million or more) delivered nearly 525 million items in 2004, generating just over $4.6 billion in delivery revenue. A breakdown by activity shows that two days or more/other services garnered only 39% of the revenue even though they accounted for 56% of all items delivered. In contrast, next-day and overnight services accounted for more than one-half of the revenue but just 33% of the total items delivered.

Of the overall total, large- and medium-sized courier firms moved 88% of all items and earned 89% of the revenue. These firms provided almost all of the two-days or more services, gathering virtually all of the revenue earned. They also accounted for most of the next-day and overnight services.

For their part, large- and medium-sized local messenger firms moved 12% of all items delivered, while they earned 11% of the overall revenue. These firms specialized mainly in same-day delivery services, earning almost all the revenue from these services in 2004.

In the industry as a whole, each item generated an average of $8.79 in delivery revenue. Next-day and overnight services generated the largest average revenue per item among couriers ($13.89), while two days or more/other services generated the smallest average revenue per item ($6.04).

Ontario remained the dominant province in the industry, as nearly one-half of the delivery revenue was generated from shipments originating in this province (47%). Canadian destinations accounted for 77% of total delivery revenue, while shipments to the United States made up about 19% of the total.

The couriers and local messengers industry depends to a large extent on relatively costly fleets of vehicles and equipment to provide its delivery services. For the couriers sector, most of the vehicles used were cube/step vans (62%) and trailers (17%).

For local messengers, the mostly commonly used equipment was automobiles (47%) and cube/step vans (30%). Overall, the industry had around 23,600 vehicles and various pieces of equipment in 2004.

Available on CANSIM: tables 402-0001 to 402-0003.

Definitions, data sources and methods: survey number 4703.

The special bulletin Service Bulletin: Surface and Marine Transport (50-002-XIE, free) will be available soon. This bulletin contains a wider range of financial and operating data on the couriers and local messengers industry.

For general information or to order data, contact the Dissemination Unit (1-866-500-8400; fax: 613-951-0009; transportationstatistics@statcan.gc.ca). For more information, or to enquire about the concepts, methods or data quality of this release, contact Vincent Dubé (613-951-7031; fax: 613-951-0579; vincent.dube@statcan.gc.ca), Transportation Division.