Business Profiles

Fastway delivering for 35 years

From one man driving a van delivering parcels across Napier and Hastings 35 years ago, Fastway Couriers now delivers over 25,000 parcels every day of the year throughout New Zealand.

The franchise model business with 17 regional franchise owners and 300 franchise couriers in New Zealand has exponentially grown in parcel deliveries with the rapid growth in online shopping both nationally and globally. In the last three years parcel movements have risen from 8,072,539 to 8,834,002 in 2017.

Fastway New Zealand chief executive Scott Jenyns has been with the business for 17 years, starting out as the franchise business manager and has progressed his way through the business to chief executive.

Scott says the courier sector has transformed dramatically over this time – from 80 percent of deliveries being large packages delivered between two businesses to 80 percent of parcels being smaller than 3 kilograms delivered to residential properties.

He says much of the success of the business can be attributed to the franchise model that founding owner Bill McGowan initiated in 1984, after just one year of business.

The franchise model is also now in place in Australia, Ireland and South Africa.

“We get a real kick out of seeing the franchisees embrace our model and be true courier experts in their local markets.

“Every day is slightly different in that instance when you are dealing with them as business owners (rather than employees),

but for me it’s seeing them go and take on national initiatives and adopting them into their local markets,” Scott says.

A vision to be a cost-effective courier service

Bill McGowan founded Fastway in 1983 with the vision to develop a cost-effective courier service using a simple pricing structure with no complicated weight breaks and no time-consuming consignment notes.

Bill spent a year doing research, and after that he was ready to go. He saw Hawke’s Bay as the ideal place to start Fastway, due to the short distance between the twin cities of Napier and Hastings, with fast-growing Havelock North also being part of the delivery route.

At the time, the industry was extremely regulated and Bill had to purchase an existing company with transport licenses to be able to get underway.

He purchased a security company called Hawke’s Bay Security Services, which came with three goods services licenses, which it used for carting cash.Bill changed the name of the company to Hawke’s Bay Courier Services. Later, Bill made extensive submissions to Government which successfully led to industry deregulation and then also successfully lobbied a move away from requiring consignment notes, which supported Bill’s business model of using prepaid courier labels.

Initially Hawke’s Bay Courier Services was branded in red and white livery but with the potential to expand the business to other regions, Bill rebranded to Fastway Couriers, with the new logo featuring a running man, which Bill designed himself.

From day one Bill created each courier delivery area himself. He would define a geographic territory for the run, work it himself for a month, before handing it over to a driver to manage. He would then build up another run, and so on.

To give an impression of being busy every morning Bill would fill his van with empty boxes – and as he said at the time “no one wants to do business with a courier that has no work!”

During this time, he developed a process called saturation marketing, which is still the way new courier territories are developed today.

A Franchise model is born

Early on Bill realised that he needed to find a way to make the couriers as motivated to gain new business as he was. After building up courier runs and handing them over to drivers, no new business was being established other than the sales Bill himself made.

n what is regarded as the most crucial decision ever to grow the business, Bill decided to create courier runs as a stand- alone franchise, rather than employing drivers. His catch phrase was “the harder you work, the more money you’ll make.”

His first franchise owner was Chris Guildford in Gisborne and due to his success, others soon followed.

The franchise model enabled Bill to expand the business beyond Hawke’s Bay, opening depots in other main centers. A linehaul network was also established to link the various branches, and for about a year Bill drove a linehaul truck at night and worked in the day.

As more and more depots opened around the country, Bill decided that franchising was also the answer to establishing and managing the depots, so he turned each depot into a Regional Franchise. Regional Franchisees were business people who could operate the depot and office facility and provide business support services to their courier franchisees.

The first regional franchisee was Gisborne and was sold to Milton Smith in 1984 and other branches were quickly converted thereafter.

Staff who had previously run the depots were redeployed to provide high levels of management support to the regional franchisees and show them how to support their courier franchisees.

They worked from a central office in Napier, which was named Franchise Support Office.

This restructure resulted in further growth and improved productivity enabling the expansion of the network throughout the country, with the linehaul trucks linking all locations.

International expansion begins

By 1992, the New Zealand business was highly profitable and performing well. It was the second largest courier company in the country, with national coverage in all main population centers, and had carved out a market niche that was untouched by the other operators.

It was now that Bill started to look at the potential of expansion into Australia and like he did for New Zealand he researched the opportunity and then launched into business across the ditch in 1993.

Running a business in two countries was tough going with Bill travelling back and forth on a weekly basis for several years.

It was time to put a management structure in place and he appointed a CEO and general managers in both New Zealand and Australia.

A fundamental change also took place in the positioning of the business. Bill was finding it difficult to get business minded people interested in a franchise associated with transport. He made the observation that other franchise organisations could get the sort of people that Fastway wanted and he needed to move from being positioned as a transport company to a franchise company.

This lead to a complete overhaul and tidying up of the business by Bill’s wife Suzanne McGowan. She revamped the franchisee operations manuals, the logo, the uniforms, signage, imagery, and advertising messages and strict marketing standards were implemented to control and maintain them.

Developments in technology were taking off at this time, and Bill brought in one of his Directors, Brem Ellingham to work on a part- time basis, establishing a separate company that would develop IT solutions for Fastway.

Brem’s role didn’t stay part time for long – he eventually oversaw all IT and later became the Managing Director of the Fastway Group of Companies, a position he held for 18 years.

In the year 2000 Fastway looked at further global expansion and it created a National Master Franchise, granting rights to operate the Fastway system for an entire country.

National Master Franchise operators would undergo extensive training and research before replicating the model successfully working in New Zealand and Australia.

Fastway Couriers now operates out of Australia, Ireland, South Africa and New Zealand

Technology starts to deliver results

A leading-edge software package Franchise Management System (FMS) was developed so regional franchisees could track every parcel in the system from pick up through to delivery. It stored customer information and calculated courier remuneration, as well as providing comprehensive reporting and a range of other tools that assist the Regional Franchisees to manage their business.

FMS is now known as WebFMS, a cloud based product with a single database which controls all of Fastway’s financial transactions including customer accounts payable and receivable, courier remunerations and has now evolved to include the company’s dynamic and offline label customers.

Scott says hand held computers (scanners) were introduced in 2006 to courier franchisees enabling the delivery signature to be uploaded to the website, so customers can view the signature online.

In 2014 Fastway integrated WebFMS with a US based company; BluJay Solutions Ltd which allows real-time scan data, in flight diverts, custom messaging and provides both an Android and iOS option for secondary devices and hardware failure.

“If you go back 35 years we had couriers running around without any handheld devices, it was a very manual orientated business. If I look at the business then and now we have created a lot of efficiencies for our couriers through leveraging technology – so all of their daily delivery and pick up jobs are managed by a handheld device ensuring that there is no disruption to serving their customers.

Challenges and opportunities ahead

Scott says the biggest challenge facing the courier delivery sector today is servicing the compounding volume increase from people buying online and wanting it delivered to their home address, usually when they are not home.

He says traditional courier companies were designed to delivery parcels between business to business, therefore many haven’t evolved to cater for the increase in single deliveries to a residential address and are therefore being left behind.

“Before online retail shopping 80 percent of transactions were large consignments between two business but this has completely swung to business to consumer being 80 percent of our deliveries.

“The e-commerce growth rates are phenomenal, all of our large global e-commerce customers and domestic customers we are integrated with are growing at double digit.

“This has challenged the traditional way that we do business and we are really having to look internally how we can ensure that we maintain a delivery network for all those customers buying online and having their products delivered to a residential address.

“We have some technologies that we are offering our franchisees to circumvent that and we have some new initiatives that we will be launching later this year, which will be market leading in New Zealand. We feel that it will put us as first choice for e-retailers, so watch this space.”

Fastway has already introduced some new technology to make it easier, the biggest initiative being the launch of ‘label free delivery’.

A growing number of transactions on websites such as Trademe and Amazon are done at home on a mobile phone as most people don’t have a printer.

“Many of the transactions are being done via a mobile phone, so how can we expect them to print a tracking label, so we have introduced a piece of technology that is “no printer – no problem.

“It’s providing real ease of transactions for the consumer and our customers just love it as it has broken down a barrier to sales that they have previously had.”

The last delivery mile

Another added value new product that also supports label free technology is Parcel Connect, which is giving greater delivery control to the consumer. Parcel Connect is a convenient agency network such as (service stations/dairies) which Scott says helps overcome an inefficiency that was created by e-commerce and the delivery of parcels to residential addresses during the day, when most people are at work.

“We are trying to deliver a parcel to someone’s home during business hours and in most cases the person isn’t home, so Parcel Connect puts control with the consumer and how they choose to receive their item. They can ask us to leave it in a safe and secure place, or if they are not happy with that they can redirect to a Parcel Connect agent and they can collect on their way home from work. In 2016 International express, mail delivery and logistics services company, Aramex bought Fastway which has helped increase the service offering to international delivery, as well as gaining access to leading edge technology.

Scott says little has changed to the franchise model since the sale to Aramex but it’s opened up parcel delivery to and from over 80 international markets.

“We have been able to launch an international service on the back of that acquisition while we get access to all their technology. They are very big on investing in start-up businesses, so when any new investment in a start-up business we get access to that information and make and assessment whether that is applicable to the NZ market.”

The future for Fastway looks set to continue in the fast lane.

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