For Howard Kruger, President and CEO of FlagShip Courier Solutions™, the business of bridging small businesses with world-class couriers rests on excellent service to their customers. We spoke to Mr. Kruger about how FlagShip is able to combine technology with personal ethics of integrity and honesty in order to create win-win situations.
Entering the courier business
Mr. Kruger’s career in business began in a family textile business, but quickly moved toward the courier industry as he tried to find his true passion in the business world. After starting a courier business in 1985, he found success but also the desire to move into larger fields.
“I opened up a local messenger company in Montreal and one in Toronto. I employed between seventy and eighty drivers in Montreal and about the same in Toronto, and formed a little chain between the two cities. We built up a local courier network between the two biggest cities in Canada at the time, back in 1985. I did that for about 15 years, and we were regarded in the top five largest private courier companies in Montreal. When I was at the top of my game in the local scene I realized it wasn’t enough, I wanted to expand into the international scene.”
“I found a buyer and sold my courier company in the year 2000. Even though we were a local courier, we still gave a lot of our out of town deliveries to the national couriers like Purolator, UPS, and FedEx. I had the relationships with them, and when I sold my company I took two years off figuring out exactly how I wanted to position myself in this industry together with these couriers.”
It was during this two year period that Mr. Kruger encountered the technology which would form the basis of FlagShip; “I met a fellow who was developing brand new technology which was to courier businesses, what Travelocity or Expedia was for travel. I loved it. Together we built the perfect prototype that I was looking for in order to get started with FlagShip.” Mr. Kruger said.
Expanding on this technology, Mr. Kruger elaborates, “It’s called an API, which in layman’s terms, is a tunnel of information that is sent from the client to the courier, then from the courier back to the client.” This information travels in milliseconds as requests are made through the FlagShip automated shipping system.
“For example, let’s say a client is based in Montreal and wants to send a delivery to Vancouver. The client would put in their parameters: where the shipment is going, what it is, how many packages, the weight and so on, and once they enter in all that information they are directed to the next page that is a rate shopping page which lists all of the different services each courier is offering and all of the various prices. The client gets to choose the courier, shop by price, and/or their preferred type of service. Once they select, it brings them to a profile to check that their parameters are correct and then they can print all of the shipping labels and documents to complete the transaction. Through the FlagShip shipping system the automation sends a signal to the couriers themselves. They don’t even have to call for a pickup; a courier will be dispatched automatically, right to our client’s door. All the client does is put the paperwork and labels right onto the package and it is ready to go” Kruger said.
Mr. Kruger spent two years learning international business with respect to the shipping industry in order to find the best way to use the technology prototype to bridge the right client with the right couriers. “I knew that I needed to find the right niche market for what my plans were that would be right for the couriers and the clients”.
“Once I had all of the components, the prototype technology built, an understanding of international business, I approached the three largest courier companies in Canada: Purolator, UPS, and FedEx. Those were the three main players I was doing business with previously, these people all believed in me. They knew that I conducted myself with honesty and integrity, and when they saw my business plan they understood that it was a win-win situation. Once I had the go-ahead from the three main couriers, we launched FlagShip in 2005”.
Establishing a niche in the small business market
“Our market is the small courier user, because the small courier user needs close hand-holding in two main areas which benefits both themselves as well as the larger couriers. These clients are not as well educated in what solutions they need to run their business from a shipping standpoint, and the number of small businesses in the market takes a toll on the courier’s resources by servicing each small business individually” Mr. Kruger said.
“Bigger companies have established procedures, and the big couriers can market directly to them. However the small guy who doesn’t have a proper solution, who doesn’t know how to send or pick up something from New York or China seamlessly, or doesn’t know the best way to get something to remote areas of Alberta for instance; that’s our customer.”
Mr. Kruger mentions that, as a unified point of contact, FlagShip is able to make the contact between customers and couriers more convenient. “Every single customer has to be billed for their shipping. Every single client has an invoice, and the chance to have an issue with it one way or another. That means that there are thousands of customers calling up the couriers. FlagShip takes all of that work off the couriers.” Kruger said.
“The couriers have told us that having FlagShip as the one point of contact for thousands of clients is such a tremendous added value whether it is from a billing or a customer service aspect. The courier bills FlagShip, FlagShip bills the client. When the client has an issue with the billing or a problem with the shipment itself, they call FlagShip. We take thousands of calls off the courier’s call center, and when we call the courier, they only have to deal with FlagShip, representing the concerns of thousands of clients.”
The services FlagShip are able to offer their customers extend to better pricing availability, on top of the extra convenience that their customer service team offers. As FlagShip is bringing many thousands of small businesses to the couriers, FlagShip gets preferred rates which then get passed down to the smaller clients. Kruger elaborates, “Those small clients going directly to the couriers aren’t going to get the discounted pricing that we can bring to them”.
Crafting win-win situations
Where many of FlagShip’s competitors have used their increased power for price negotiations to undercut the market, FlagShip has been careful to keep an important balance between the customer, the market and the couriers. “We never step on the courier’s toes.” Mr. Kruger said, “We’re aware of who our market is and who our market is not. Our sales guys are getting sales opportunities every day, but are walking away from business that we know is the business of the couriers themselves. We position ourselves always as the extension of the couriers and that is to complement their services.”
“We like to stay within a certain threshold of pricing in the market place. It’s much more difficult and more rewarding when you can sell a client by keeping them in a certain price point, not undercutting the market, but letting them know the benefits of why they should use FlagShip and the added value as a whole. One of our competitors may offer it, ten, fifteen, even twenty percent cheaper, and if you’re driven just by cost you may leave us for that competitor, and we will wish you well. We always tell our clients that if they’re not getting the same hand-holding service we offer, the door is always open for them to come back to us. We will not spoil the market, and we’ve had many clients come back to us as they realize that even cheaper pricing is not the only deciding factor”. Kruger always likes to refer back to one of his favourite quotes: “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”
Value-add between FlagShip and the couriers and then FlagShip to their clients are what drive Mr. Kruger well into the future. “Without honesty and integrity, you can’t go a day in business” states Kruger.
Mr. Kruger has his two sons, who are both directors, alongside of him for the last seven years and together with 3 other directors in critical areas of his company, make up a team of 6 on the Executive board. “FlagShip’s strength comes from these leaders that I am so blessed to have” says Kruger.
As FlagShip pushes forward into their thirteenth year, Mr. Kruger is interested in investing as much as he can back into his business, and into all his employees he said that are like one big family to him.
“We put a lot of our resources back into technology. Over the years I’ve spent millions of dollars upgrading our systems; we’re now on our fifth version of our shipping system. I have seven programmers on staff, and we’re making sure that we’re giving our clients the best technology to make their shipping as easy as possible.” Mr. Kruger said.
“On top of our investments back into technology, we are constantly educating our staff so that we’re better equipped to answer any of our client’s needs. A lot of my customer service reps have just taken customs brokerage courses, because customs brokerage works hand in hand with the work of international couriers, and we want to be able to answer a lot of our clients concerns before handing them off to their own customs brokers. At the same time we’re constantly educating our programmers so that they stay current within their world; they’re going to IT seminars for example. As well our marketing staff is attending SEO seminars so we’re at the top of our game in regards to SEO and other marketing initiatives. “
As important as investing back into FlagShip’s staff, is investing into their customers; “In order to better serve our customers, we also offer 3rd party truck services, which we manage logistically. We offer LTL and FTL freight; anything in North America larger than a courier can handle, usually skidded freight”.
Looking into the future of FlagShip, Kruger notes that he is looking to uphold his original vision, and to maintain a win-win-win situation for his clients, the couriers and for FlagShip; “Once that chain is broken, something is wrong and it is our mission to make sure that never happens.” Mr. Kruger said.
“My vision 15 years ago was that I saw a need for small businesses, I saw what they were missing and over the years I think we’ve branded ourselves in a way which sustainably serves that small business market. Our goal is we want to take away our clients shipping headaches and let them do what they do best, which is running their own businesses.”
Find out more by visiting www.flagshipcompany.com.