If you’re only taking hand luggage the next time you fly, Shelvie Fernan wants to talk. He’ll buy your checked baggage – and pay you up to $1,400 for it.
Fernan is the CEO and co-founder of Fly and Fetch. An Edmonton-based startup with its eyes on the next big sharing economy company to disrupt traditional business the same way Uber did to the transportation industry.
Fernan aims for the airmail.
“My team and I are hacking international shipping by hiring passengers to carry packages for us instead of air freight,” said Fernan, who has been buying air travelers’ unused checked baggage to carry packages to faraway places since 2019.
Doing so allows Fernan to offer international shipping at a lower cost than traditional couriers, which he says is an important service for Canadians like him who frequently ship products to and from the Philippines.
“One day I realized we don’t really use FedEx because it’s so expensive or DHL because we’re just looking for friends and family to come home to. We’ve been doing this for decades,” Fernan said.
Crab paste and wedding shoes
Precious Simpao, a restaurant supervisor in Red Deer, Alta., has used the service more than 10 times to send herself items from Manila: jewelry, cosmetics, dresses and even a couple of cans of crab paste.
“I had this craving… it’s a taste of home, that’s why.”
Last year, Simpao sent a smartphone to his father in the Philippines. It arrived in three days and cost him $37 to ship from Edmonton.
Cost of living compared the cost of shipping an iPhone 13 in a padded envelope using one of four traditional courier services: Purolator, FedEx, DHL and UPS.
It would cost $175 to $500 to send a package in the same time from Calgary to Manila.
Why is shipping so expensive?
It all comes down to overhead, and international shipping has a lot of it: storefronts where customers can leave packages, warehouses to sort and store mail, delivery trucks to pick up and drop off packages, rising fuel prices, and airplanes, which are very expensive.
“Last time I checked, a large freighter like a Boeing 747 cost you about $300 million,” said Thomas Goldsby, a logistics expert and professor at the Haslam College of Business at the University of Tennessee in Knoxville.
By 2022, FedEx will have 697 aircraft.
“The airplanes are very expensive, the facilities are expensive, and all the people you have to hire to maintain and operate the equipment are very expensive. And so you have a very hefty fixed cost proposition,” Goldsby said.
But with a bulk shipping model like Fly and Fetch, most fixed costs can be cut out of the equation. Dispatchers drop out and passengers pick up at employees’ homes, called “hubs,” so the company doesn’t have to pay rent and utilities in brick-and-mortar apartments.
So whether you’re traveling to Manila for business or economy, the offer is the same: $125 to $1,400 depending on how far you’re going and how much you’re willing to pay.
It’s called a bulk broadcast
The Fly and Fetch model, known as bulk shipping or bulk shipping, is new to Canada but has been tried before in other jurisdictions with varying degrees of success.
European startup PiggyBee was one of the first to appear in 2012, followed by US app AirWayBill. Both have since folded.
However, some succeeded.
Roadie, which connects gig economy drivers with deliveries to places they’ve already traveled to, is still going strong. Company got attention in 2015 for using the American breakfast chain Waffle House as a neutral meeting place for drivers and dispatchers. UPS acquired the company for an undisclosed price in 2021.
Read the fine print
Transport Canada and the Canada Border Services Agency (CBSA) do not have regulations or laws that prevent air passengers from carrying items for other people in their checked baggage – unless they are prohibited or illegal.
In an emailed statement, the spokesperson said the CBSA “is aware that sending friends or family members to Canada via international travelers is not an unusual practice,” but travelers are responsible for complying with all customs requirements, including paying duties and taxes.
Cost of living8:45Growth of crowdsourced packages
Another point the CBSA announced, according to Alfred Chase, director of compliance for border brokers, is that a passenger carrying goods for others can be construed as a “commercial carrier” and be forced to leave the goods at airport customs until they are cleared. through normal channels.
In an email, Chase said travelers could also face fines if they unknowingly carry items valued at more than $2,000 or carry one of “thousands of different types of items controlled by nine different government departments” aside from obvious controls such as firearms .
Chase added that even something as simple as missing a meat inspection certificate for one can of beef stew can result in a $500 fine.
“Some people see this as quick money or a discount on their holiday expenses and don’t think about the consequences if something goes wrong. There’s a reason airports have it so you’re not carrying someone else’s bag.”
Fernan said his company makes sure passengers don’t carry items worth more than $10,000, such as tobacco, alcohol, controlled drugs, weapons or currency.
He also said that shippers’ packages are carried unsealed so passengers can check every item they take on board and refuse anything they don’t want to bring.
With Fly and Fetch, everything is packed in a cardboard box, separate from personal items such as toothpaste and underwear. Passengers leave the boxes in the baggage area and board the flight.
But passengers don’t get paid until they take the boxes off the baggage carousel and hand them over to a Fly and Fetch employee who meets them at the airport.
Fly and Fetch packs these boxes to the limit – the maximum weight allowed for one piece of checked baggage, typically 23 kilos. When flying internationally, most airlines allow passengers to check two pieces of luggage for free.
According to Goldsby, the company is able to keep prices low and turn a profit – it has found a loophole that allows passengers to take advantage of the cost of their airfare.
The air cargo sector is growing
According to a new report by Deloitte, the amount of air cargo loaded and unloaded in Canada could increase by almost one million tonnes by 2025. The study also suggests that Canadian airports, airlines and global distribution companies will need to invest in logistics infrastructure to keep up with the growing demand for international shipping.
Seeing an opportunity, Fly and Fetch is increasing its Canadian drop-off points and expanding its routes. But even if it could undercut the competition, Deloitte’s Dejan Markovic isn’t convinced bulk shipping could ever replace traditional delivery methods.
“It’s not likely to cause much damage,” said Markovic, the company’s national aviation director. “When the shipping giants come in – the FedExs, the Purolators of the world – these are the Goliaths, right? They have tons of product, tons of demand, and tons of capacity, too.”
Fernan said he has something those “maritime giants” don’t. Something he believes is more important.
“The Filipino community, we’re very close with them and they feel a little attached to us because it’s not just a transaction,” he said.
“For example, I asked my dad to deliver a package for us from Edmonton to Red Deer. I said, ‘Can you leave it there?’ Because it’s just like a special case for us.”
After his father dropped off the package, the customer invited him inside for dinner, and they ended up hanging out for hours.
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