Purolator completes major Hamilton expansion
http://www.thespec.com/news/business...lton-expansion
Courier giant Purolator Inc. has poured more than $9 million into its Hamilton airport cargo centre as it ramps up for a major business expansion in the United States.
The money has financed a major expansion of the aircraft parking area around its Hamilton plant. The move allows larger, more efficient aircraft to move through the airport, expanding the volume of cargo the plant can handle.
“This is a significant investment for Purolator,” said Jim McLellan, the company director of real estate. “It will allow us to look at what is the best air network for us.”
Purolator handles up to 1.1 million pieces of cargo every day, 100 million pounds of it a year, and if it moves by air, McLellan said, it likely moves through Hamilton on one of its 22 daily flights. The company has 11,300 employees across its system, about 100 of them stationed in Hamilton.
“Hamilton is our national airport,” he said. “If you ship something in Canada from St. John’s to Vancouver, the chances are it will pass through Hamilton.”
The expanded air operation based in Hamilton will help Purolator’s plan to beef up its American business, targeting clients who need to move freight into or across Canada. Moving freight from the U.S. into Canada is an $8-billion-a-year business. Purolator is a small player now, but its share of the business rose 30 per cent last year.
“We’re saying to them we have the biggest and best network in Canada, period, full stop,” McLellan said. “We’ll never be able to compete with FedEx and UPS in the States, but nobody can compete with our network in Canada.”
Purolator has annual revenue of about $1.7 billion and has about 30 per cent share of the intra-Canada small-package market. Its Canadian network is bigger than the combined networks of FedEx Corp. and UPS Inc.
“Hamilton plays a key role in that because Hamilton is our air network hub,” McLellan added. “We made a very conscious decision to fly into Hamilton and it has worked out very well for us.”
The company’s American business grew about 30 per cent last year to sales of $150 million. The company plans to add 10 U.S. offices during 2012. There are also plans to expand into Mexico targeting American businesses needing links to Canada and Mexico. European companies with the same needs are also on the radar.
While the Hamilton expansion allows the company to operate more efficiently, it won’t mean any new employment, at least not yet.
“It certainly opens the door to more hiring as business grows,” McLellan said. “The infrastructure has to come first.”
Hearing of Purolator’s aggressive expansion plan centred on Hamilton is like a hymn to John Dolbec, president of TransHub Ontario, a lobbying and advocacy agency pushing Hamilton as a transportation hub.
“Developments like this are all part and parcel of a bigger picture for Hamilton,” he said. “This isn’t about arguing should Hamilton be a transport hub; we already are. This is about going back to our natural, historic strengths.”
Richard Koroscil, president of the John C. Munro Hamilton International Airport, also welcomed the Purolator expansion as “an exciting piece for us. It’s a large expansion and a long-term commitment to the airport.”
Cargo is the bread and butter of Hamilton airport’s business. While it actually earns more revenue from passengers, most of the 2,876 jobs at the field are related to movement of cargo by Purolator, DHL, CargoJet and UPS. Last year, almost 420,000 tons of cargo moved through Hamilton.
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