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Cargojet to provide domestic cargo services for Canada Post, Purolator

By Staff Reports on February 19, 2014

Cargojet announced Wednesday that it has been awarded the Domestic Air Cargo Network Services contract and has signed a Master Services Agreement with the Canada Post Group of Companies (CPGOC).

“Canada Post is undergoing a major transformation as customer demand shifts from mail to parcel delivery with online shopping,” said Jacques Côté, group president, physical delivery network, Canada Post. “This move will drive operational efficiencies, lower our transportation costs and help ensure our parcel delivery remains competitive from a cost and reliability perspective.”

The contract is for an initial seven-year term with three 36-month renewal options. Projected revenues are estimated to be approximately CA$1 billion (US$908.7 million) during the initial seven-year agreement based on projected volumes. 

“Cargojet is extremely pleased to have been successfully chosen as the exclusive primary domestic air cargo service provider to the Canada Post Group of Companies. Cargojet operates an extensive overnight air cargo model, which will provide the most cost-effective and scalable solution to the Canada Post Group of Companies,” Ajay Virmani, president and CEO of Cargojet, said. “Cargojet and the Canada Post Group of Companies will work together to provide Canadians with world-class and flexible air cargo services in today’s changing business environment.”

Cargojet will provide comprehensive Canada-wide air cargo services for CPGOC, including Purolator’s national air cargo network. Cargojet’s domestic overnight network will be expanded to handle the additional volumes and provide a virtual dedicated air cargo network to CPGOC.

“We are excited about the prospect of working with Cargojet. Their extensive air network, combined with Purolator’s extensive ground network will enable us to continue to enhance and expand our service offerings for customers while assuring our market competitiveness in the long term,” Patrick Nangle, president and CEO of Purolator, said.