May 27, 2020

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Cross-border co-operation

Business at Mike's Parcel in Pembina dried up when the border was closed. Emerson's Runnin' Red delivery service rode to the rescue of international shoppers

Last year, Vanessa and Mason Peters bought Mike’s Parcel, a business in Pembina, North Dakota that essentially functions as an American address for Canadian residents looking to ship and store everything from T-shirts, to car parts, to motorcycles while avoiding international charges.

The business had been around since 2000, when it was started by the eponymous Mike. Over two decades, it grew, with hundreds of Canadians, mostly from southern Manitoba, making the short drive south down Highway 75 each day to pick up their orders.

Eventually Mike wanted to sell, and in stepped the Peters, who, 20 years after leaving Steinbach to work in the ministry in Pembina, wanted a change.

"We weighed all the possibilities, and in jest, we said the one thing that would be the worst-case scenario would be if the border closed," Vanessa Peters said in an interview.

"At the time, we all just laughed. But here we are."

“We weighed all the possibilities, and in jest, we said the one thing that would be the worst–case scenario would be if the border closed." –Vanessa Peters

A day earlier, the Canadian and American federal governments agreed to keep the border between the two countries closed until at least June 21, extending the restriction of international non-essential travel that’s been in place since March

For Mike’s, which relies on the business of Canadians near the border, the situation and its uncertainty has been calamitous for business. The business is still running, and it does have options to store orders for up to a year in its large warehouse, but revenues have dropped more than half compared to last year as orders dwindled.

"The faucet is turned off in a way," Peters said.

A short drive north to Emerson tells a different story.

JOHN WOODS / WINNIPEG FREE PRESS</p><p>Mike Caners of Runnin’ Red, a cross-border courier, unloads packages from Emerson in their warehouse. Runnin’ Red co-owner Trevor Froese says that currently they are probably doing four to five times the normal volume.</p>

JOHN WOODS / WINNIPEG FREE PRESS

Mike Caners of Runnin’ Red, a cross-border courier, unloads packages from Emerson in their warehouse. Runnin’ Red co-owner Trevor Froese says that currently they are probably doing four to five times the normal volume.

There, Runnin’ Red, a five-year-old parcel retrieval service for individuals and small businesses, is thriving.

Because the business regularly hauls stock like medical supplies across the border, it has clearance to cross commercially as an essential business, and a lot of Manitobans are calling the business line asking whether Runnin’ Red can pick up the packages in Pembina they’d normally retrieve themselves.

"It seems like every time the governments announce border restrictions, we get an influx of people calling to schedule a pick-up," said Trevor Froese, a co-owner with a background in customs brokerage.

"We’re probably doing about four to five times volume as compared to normal, and it’s definitely because of the border closure. People just want their parcels."

If anything, Runnin’ Red is experiencing a boom at a time when many businesses are seeing their bottom lines bust.

"People just want their parcels.” –Trevor Froese

Froese and partner Jeff French, both from Emerson, started the business in March 2015, combining their backgrounds in customs and transportation to fill what Froese said was a gap in the market. They started out with a small van and a solid business plan, and expanded to over 15 employees and several more vehicles.

When the pandemic hit, Froese said it was expected that business would slow. Runnin’ Red had to ponder the idea of layoffs, but the demand for personal and small business shipment retrieval from Pembina locations like Mike’s actually went up.

All staff were kept on, and the company hired another driver and has a posting for its office staff. A five-tonne truck, a van, and a semi cross the border every weekday for pickups, and several other vehicles criss-cross Winnipeg to make deliveries, too.

"80 per cent of our customers are new ones we’ve just started dealing with," said Froese.

That influx can be attributed at least in part to a sharp increase in online orders over the last three months.

According to data compiled by marketing firm Emarsys and GoodData, Canadian online retail orders skyrocketed as lockdowns began: on March 8, sales were up about 82 per cent compared to 2019 — already a high volume. But by March 22, orders had increased by 200 per cent; that level of online retail has been sustained.

However, Emarsys found online order revenue has begun to taper down, while still outpacing last year’s revenue by a healthy 66 per cent.

At Runnin’ Red, that’s been welcome news. At Mike’s, the business has yet to reap the benefits, although revenues have begun to climb incrementally in the past few weeks.

Overall, order volume is down significantly to the Pembina outpost. But Peters is optimistic that once border restrictions are lifted, the new converts to online shopping will mean Mike’s will experience a bump-up in revenue, albeit a delayed one.

“We really would like to see this business succeed and come back to the other side of this, but first we have to trudge through the mud." –Vanessa Peters

North Dakota, like Manitoba, has thus far managed to evade disastrous levels of COVID-19 infection. Statewide, there have been 1,994 confirmed cases, with 1,269 recoveries and 45 deaths. In Pembina County, six cases have been confirmed, with three recovered.

Both Froese and Peters hope the situation improves to the point of the border opening up, however, it’s impossible to accurately predict when exactly that will occur. Froese knows unless businesses like Mike’s Parcel survive, his vans won’t even be able to make their pickups.

"It’s not good to see them struggling," he said. "We rely on them just as they rely on us, so we are trying to help out as much as possible."

Peters likened the business’ struggles to that of a farmer with hail-damaged crops: the situation is beyond her control, but that risk is a part of doing business.

"We really would like to see this business succeed and come back to the other side of this, but first we have to trudge through the mud," she said.

ben.waldman@freepress.mb.ca

Ben Waldman

Ben Waldman
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Ben Waldman covers a little bit of everything for the Free Press.

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Updated on Saturday, May 23, 2020 at 5:08 PM CDT: Corrects pull quote attribution.

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