A Mississauga-based company that provides overnight air cargo services shipped a record amount of volume last week as Canadians flocked to Amazon Prime in unprecedented numbers.
Cargojet Inc. said in a statement that last week, the company shipped about 453,000 kilograms – or one million pounds – more than it usually handles in an average week. With Amazon Inc.’s two-day Prime event occurring last Monday and Tuesday, Cargojet operated 23 additional flights and was able to ensure 100 per cent on-time reliability, the company’s chief executive Ajay Virmani said in a statement.
“The continuing and tremendous growth of online shopping by Canadians is contributing to increased demand for Cargojet’s time-sensitive overnight air cargo services,” said Virmani.
“Our major customers experienced significant volume growth this past week and Cargojet’s overnight air cargo network is continuing to enable e-commerce delivery across Canada.”
While Amazon did not provide specific numbers breaking down Prime day sales in Canada, the e-commerce giant said that sales were more than those seen during Black Friday and Cyber Monday combined. In Canada, the top sellers on Prime Day were the PlayStation 4 Slim system with Spiderman and Horizon Zero Down, a LifeStraw Personal Water Filter, and 23AndMe Health and Ancestry kits.
Cargojet has been reaping the benefits of the growing popularity of Amazon Prime in Canada, particularly as the retailer expands its one-day delivery service, which typically requires overnight shipping. Cargojet’s share of the air freight market grew from 50 per cent to 95 per cent in 2015, when it won a lucrative Canada Post contract away from Kelowna Flightcraft.
RBC Capital Markets analyst Walter Spracklin said in a note to clients Monday that for every one million pounds of additional volume shipped, Cargojet’s quarterly earnings before interest, taxes, depreciation and amortization (EBITDA) could increase by $400,000, or 1.1 per cent.
“E-commerce demand continues to increase, and the need for expedited service is increasing at an even faster rate,” Spracklin wrote in the note to clients, reiterating that Cargojet remains a “top idea” in the transportation sector.