What the first 25 years have taught Urgent Couriers
By Hayes Knight - 22 October 2015
Keeping up with customers’ changing needs and new ways of doing business is essential for a company’s long-term viability. But the businesses that really thrive are led by CEOs who don’t just want to keep up, they’re always looking to stay ahead of the curve.
Among them is Steve Bonnici. The founder and CEO
of Urgent Couriers has adopted an ethos of innovation,
diversification and sustainable business practices. Having worked
in the courier industry for five years during the 1980s, Steve was
in his mid-20s when he backed himself to go it on his own.
In 1989, he founded Urgent Couriers and has nurtured
the company through the subsequent economic upswings and downturns.
Keeping the business going through tough times has required both
nimble thinking and a sustainable business model.
Thanks to developments in technology like email and
e-commerce, the last decade has seen Urgent Couriers' customer base
change completely. The delivery of documents between professional
services firms once accounted for 70% of business. It's now shrunk
to around 20%.
"Lawyers were once our biggest clients," says Steve.
"Now it's physical product. You have to change and reshape
yourselves to take advantage of that. Diversification has been our
mantra for the last few years."
In 2011, Urgent Couriers diversified into trucks,
buying Inter City Couriers with its fleet of four trucks. Now there
are ten servicing a growing division dedicated to quickly
transporting pallets of product.
In 2014, Urgent Couriers consolidated its Kingsland
office and Morningside warehouse into much larger premises in
Penrose. The company has introduced a new service to meet the rise
in online shopping. Urgent Tonight provides fast and convenient
same-evening home delivery for online purchases.
With this purchase of the Penrose warehouse, Urgent
Couriers successfully entered the third party logistics market.
This new vertical integration of storage and distribution has been
another significant growth area, says Steve. Clients include
organic soft drink Karma Cola, for which Urgent does all the
Auckland distribution, as well as online companies selling
cosmetics and tech products.
"Our niche is really those that need fast picking,
packing and real accuracy down to individual item picks. Not all
are online businesses, some are B2B companies. There's been a trend
away from having your own big shed and making it a variable cost,
so you can seasonally adjust your lease costs based on how much
storage space you require."
Despite the imperative to adapt to shifting consumer
demands, Steve has stuck to some key non-negotiables. During the
global economic downturn, some of his business decisions weren't
the most profitable, but they were based on more than just
Among them is his stance on paying his drivers
fairly. As contractors, courier drivers receive a fixed percentage
of the fee for each delivery, and Steve has long campaigned to
change industry attitudes and protect drivers' livelihoods.
"The biggest ongoing challenge is that our industry
doesn't pay its drivers responsibly," he says. "Couriers are
contractors so they're not covered by minimum wage legislation.
When clients negotiate hard to get courier fees down, they're
effectively negotiating for a pay cut for the drivers. We've taken
that seriously. It's probably impacted our growth - and it eroded
our margins during the GFC - because we don't take on clients who
aren't willing to pay enough. That's been our biggest challenge and
a soap box I've stood on for a long time. Paying your drivers well
is the right thing to do, and it ensures a better quality of driver
who likes to come to work and provides a better service."
Another business fundamental for Steve is
environmental sustainability. Urgent Couriers was an early adopter
of low emission vehicles and became New Zealand's first carbon
neutral courier company in 2007.
"We paved the way in that area, and it helped
differentiate us in a crowded market," he says. "We've also shaken
the industry up to the point where there's now another carbon
neutral courier company. If we hadn't taken that stance, that
wouldn't be the case."
Urgent Couriers' innovation extends to its focus
on cutting-edge technology. The company has a dedicated development
team and builds its own software. It's unusual for the industry
(not to mention costly), admits Steve, but it's enabled Urgent
Couriers to stay ahead of the competition.
In 2011, Steve and his team developed a new
cloud-based CRM (Customer Relationship Management) system called
Exsalerate. It was originally created to meet Urgent Couriers'
needs but Steve realised it could be an ideal business. Exsalerate
combines a range of forecasting, reporting and tracking tools
designed to optimise the sales process and improve client
"We needed a reliable CRM system but we couldn't
find what we wanted at a reasonable price point," Steve explains.
"In 2010 when we first started looking, all the CRM systems out
there were expensive and complicated. For us, even as an $8-9
million turnover business back then, I couldn't justify that. I
knew there would be other SMEs in the same position so I thought,
why don't we build one ourselves? It can't be that hard."
While not initially built as a Xero add-on,
Exsalerate has been on Xero's catalogue since May 2014, and around
80% of sign-ups are now via Xero.
"We wanted to keep it really low cost and not
get too technical. But our thinking quickly changed as we realised
the power of these sorts of programmes is actually about who you
integrate with," Steve comments.
"Our first test clients were other business owners I
talked to who were willing to give it a whirl," he explains.
"Naturally, we weren't going to sell it to Urgent Couriers' New
Zealand competitors so we took it to some courier-owners
conferences in the US and sold it up there. They all said the same
thing: 'we should be using a CRM system but they're all too
complicated and expensive.'"
Revenue from overseas sales of Exsalerate recently
surpassed New Zealand revenue. While the exchange rate has played a
role, Steve says SMEs understand the Exsalerate structure, which
isn't based around individual contacts but around businesses.
When we built it, we didn't look at everyone else's
and the features they had or we'd just be a poor relation of
existing systems. We built it to satisfy our own needs," he
While it's still early days, sales are steadily
growing and the potential for the software is significant.
Having fine-tuned the system, Steve is finally ready
to offer Exsalerate to Urgent Couriers' customers. He's also now
working with Brendon Cutler, Business Advisory Director at Hayes
Knight, to introduce it to Hayes Knight's clients.
"Steve has a real entrepreneurial outlook," says
Brendon, "but he's incredibly personable and he cares about his
team and customers. He's always looking to grow and improve his
business and this CRM product is just another example of that. We
believe that Exsalerate is full of potential, so we're
collaborating on this project and looking at new opportunities
through our international affiliates and our contacts with firms in
Australia and further afield."
Steve says this willingness to help businesses
explore new opportunities is one of the things he likes most about
working with Hayes Knight.
"They've always been a really good firm to deal
with, and I like their progressive, proactive approach to working
with their clients in ways that extend well beyond just doing our
to one of Urgent Couriers' low emission vehicles.