If you're only taking carry-on luggage the next time you fly, Shelvie Fernan wants to talk. She'll buy your checked-baggage capacity — and pay you up to $1,400 for it.
Fernan is the CEO and co-founder of Fly and Fetch, an Edmonton-based startup that has its eye on being the next big shared-economy firm to disrupt a traditional business sector, similar to what Uber did to the transportation industry.
Fernan is targeting air mail.
"Me and my team are hacking international shipping by hiring travellers to transport packages for us rather than using air cargo," said Fernan, who has been purchasing airline passengers' unused checked luggage to carry parcels to far off places since 2019.
By doing so, Fernan can offer overseas shipping cheaper than traditional couriers, which she says is an important service to Filipino Canadians like herself who frequently send items to and from the Philippines.
"One day, I realized that we don't really use FedEx because it's so expensive, or DHL, because we just look for friends and family going back home. We've been doing this for like decades," said Fernan.
Crab paste and wedding shoes
Precious Simpao, a restaurant supervisor in Red Deer, Alta., has used the service more than 10 times to ship items to herself from Manila: jewellery, cosmetics, dresses and even a couple of jars of crab paste.
"I had this craving … it's a taste of home, that's why."
Last year, Simpao mailed a smartphone to her father in the Philippines. It arrived in three days and cost her $37 to send it from Edmonton.
The Cost of Living compared the price of sending an iPhone 13 in a padded envelope using one of four traditional courier services: Purolator, FedEx, DHL and UPS.
To send the parcel in the same time frame from Calgary to Manila would cost between $175 and $500.
Why is it so expensive to ship stuff?
It all comes down to overhead, and international shipping has a lot of that: storefronts where customers can drop off parcels, warehouses to sort and store mail, delivery vans to pick up and drop off packages, rising fuel prices and planes, which are very expensive.
"Last time I checked, a big cargo plane like a Boeing 747 was going to cost you about US $300 million," said Thomas Goldsby, a logistics expert and professor at the Haslam College of Business at the University of Tennessee, Knoxville.
As of 2022, FedEx was operating 697 aircraft.
"Planes are very expensive, facilities are expensive and all the people you need to employ to maintain and operate that equipment, very pricey. And so you have a very hefty fixed cost proposition in front of you," said Goldsby.
But with a crowdshipping model like Fly and Fetch, most of those fixed costs can be cut out of the equation. Senders drop off and travellers pick up at employees' homes, called "hubs" — eliminating the need for the company to pay rent and utilities on brick-and-mortar locations.
So whether you're travelling to Manila in business or economy, the offer is the same: $125 to $1,400, depending how far you're going and how much you're willing to schlep.
It's called crowdshipping
The Fly and Fetch model, known as crowdsourced shipping or crowdshipping, 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 the U.S.-based app AirWayBill. Both have since folded.
However, some found success.
Roadie, which matches gig-economy drivers with deliveries going places they were already travelling, is still going strong. The company gained attention in 2015 for using the American breakfast chain Waffle House as a neutral meetup location for drivers and senders. UPS bought the company for an undisclosed amount in 2021.
Read the fine print
There are no regulations or law under Transport Canada and the Canada Border Services Agency (CBSA) that prevent airline passengers from carrying items for other people in their checked luggage — unless they are prohibited or illegal.
In an email statement, a spokesperson said CBSA "is aware that having friends or family members ship goods to Canada through international travellers is not an uncommon practice," but travellers are responsible for complying with all customs requirements, including payment of duties and taxes.
Cost of Living8:45The growth of crowdsourced parcel shipping
Another issue that CBSA flagged, as did Alfred Chase — director of compliance for Border Brokers — is that a traveller carrying items for others could be interpreted as a "commercial carrier" and be forced to leave the goods at airport customs until they're cleared through normal channels.
In an email, Chase said travellers can also face fines for unknowingly transporting goods valued over $2,000, or carrying one of the "thousands of different commodity types controlled by nine different government departments" beyond the obvious exclusion of controlled items like firearms.
Chase added that even something as simple as missing a meat inspection certificate on a single can of beef stew could result in a $500 penalty.
"Some people will see this as a quick buck or discount to their vacation costs and will not think of the repercussions if something goes wrong. There is a reason the airports ask you not to carry anyone else's bag."
Fernan said her company is careful to ensure travellers don't carry items valued over the allowable limit and does not ship prohibited or restricted items such as tobacco, alcohol, controlled drugs, weapons or currency over $10,000.
Also, she said, senders' parcels are transported unsealed so that travellers can inspect every item they're taking on their flight and decline anything they don't want to bring.
With Fly and Fetch, everything gets packed in a cardboard box, separate from personal items like toothpaste and underwear. Travellers drop the boxes off at the baggage area and get on their flight.
But passengers won't get paid until they take the boxes off the baggage carousel and hand them over to a Fly and Fetch employee that meets them at the airport.
Fly and Fetch packs those boxes to the brim — the maximum allowable weight for a single piece of checked luggage, typically 23 kilograms. When flying internationally, most airlines allow passengers to check two bags for free.
Goldsby figures that's how the company is able to keep prices low and turn a profit — it's found a loophole that allows travellers take full advantage of the cost of their airline ticket.
Air freight sector growing
According to a new report from Deloitte, the volume of air cargo loaded and unloaded in Canada could grow by nearly one million tonnes by 2025. The study also suggests that Canadian airports, airlines and global delivery companies will need to invest in logistics infrastructure to keep up with rising demand for international shipping.
Seeing opportunity, Fly and Fetch is increasing its Canadian drop-off locations and expanding its routes. But even if it's able to undercut the competition, Deloitte's Dejan Markovic is not convinced crowdshipping could ever replace traditional shipping methods.
"It probably isn't going to do a whole lot of damage," said Markovic, the company's national aviation leader. "In terms of the shipping giants — the FedExs, the Purolators of the world — these are Goliath's, right? They have a ton of product, a ton of demand and a lot of capacity as well."
Fernan said she has something those "shipping giants" don't have. Something she believes is more important.
"The Filipino community, we're very tight with them and they feel a little bit attached to us because it's not just transactional," she said.
"For example, I asked my dad to deliver a package for us from Edmonton to Red Deer. I was like, 'Can you just drop it off there? Because, like, it's just like a special case for us.'"
When her dad dropped off the package, the customer invited him inside for dinner and they ended up hanging out for hours.
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October 25, 2022 at 06:00PM
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Got space in your luggage? Air travellers get paid to carry parcels - CBC.ca
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