Debrief: For Costanzo, a direct path, largely north

North by northwest: With new international trade laws easing duties for shipments into Canada, now is the time for regional businesses to explore opportunities across the Great White North, according to longtime logistics leader John Costanzo.

A living legend of Long Island logistics, John Costanzo was front row during direct marketing’s evolution from snail-mailed mass-prints to glossy catalogues to e-commerce. More in the driver’s seat, actually: As president of the Long Island-based International Mail and Parcels Division of TNT Post Group (then among the world’s largest transportation-logistics providers, still punching across Europe) and most famously as longtime leader of Jericho-based Purolator International ($200 million U.S. subsidiary of Canadian freight giant Purolator Inc.), Costanzo directed operations that redirected “junk mail” (his term) from print campaigns to magazine-style mailings to the Internet, an unprecedented logistics game-changer. Now “retired” and running a “personal consulting business” for select clients, Costanzo has taken the reins of the MAPLE New York Business Council, first satellite branch of a California-based networking organization committed to capitalizing U.S./Canadian trade opportunities. With the new United States-Mexico-Canada Agreement supplanting NAFTA, MAPLE New York, the Long Island Association and the Long Island Hispanic Chamber of Commerce have scheduled a Nov. 5 webinar exploring new Canadian prospects for LI businesses, which according to Costanzo are plentiful.

 

Costanzo: Direct hit.

See the world: (At International Mail and Parcels), we offered parcel delivery services to larger shippers – out here on Long Island, companies like Zebra (Technologies) or Canon USA. We gathered shipments from various distribution centers and shipped them globally.

Let me be direct: A lot of it was direct marketing, what we call junk mail. “Buy my widgets,” sent through snail mail. That went global, and (TNT Post) was heavily invested in that business, and so, unfortunately, we sent that junk mail all over the world.

How do you say “junk” in Basque? Making the mail piece look as though it originated in the country it was selling to was very challenging. In that way, it was a very interesting business.

Big secret: Before the Internet, cataloguers showed up. Companies like Victoria’s Secret, for example. They shipped millions of catalogues with us globally, and then, when the orders came in, we helped process them.

Good problem to have: Then the Internet came in and kind of took over … and it’s been fantastic for the shipping industry. It’s become a problem, actually, for the shipping industry – there’s so much shipping.

Home advantage: The major shift was around 2012 or 2013, really an explosion in e-commerce volume when it all evolved toward home delivery. Before then, [home delivery] was about 10 percent of [Purolator International’s] shipments. When I retired last fall, it was more than half of our shipments.

Northern exposure: Canada was about 90 percent of [Purolator International’s] business. Canada is the No. 1 trading partner of the United States – there’s no country we sell more goods to – and we had the largest delivery network in Canada.

Logistics lesson: Purolator in Canada is, like, 95 percent owned by the Canadian Post Office. Unlike our country, Canadians like the service they get from their post office. It’s something the United States can learn from. [Most] Canadians receive their parcels in a locker in their neighborhood, owned by the post office. Everybody gets a key and they go down the street and pick up their parcel. It’s a very efficient way to deliver packages – you don’t have to be home, you don’t have to reroute shipments, you don’t have to drive 30 miles to a distribution center.

Welcome to LDK Global Logistics: It’s not a huge venture, just my own personal consulting practice. I have a lot of experience in the international/domestic logistics business, which I’m leveraging through personal relationships to help a few companies I enjoy working with. Just helping with their logistics strategy and execution. I’m not going to compete with FedEx anytime soon.

Canadian connection: One of our young guys [at Purolator in California] found this organization focused on helping companies that wanted to … build business between the U.S. and Canada. It was founded by two Canadian guys who are in Southern California now, and their main mission is to facilitate trade and entrepreneurial activity by introducing like-minded people through networking meetings and other events.

MAPLE match: I went to one of their meetings and was very impressed. They said they were very interested in expanding into the New York area, and a few months later we agreed I’d help get it started for them. I’ve really enjoyed it – I’ve maintained a lot of strong relationships (in Canada) and this is right in my wheelhouse.

Meet the USMCA: The USMCA is a really big issue for anybody shipping orders over $20 in value. Under NAFTA, you could ship something up to $20 Canadian in value (about $17 U.S.) into Canada without incurring any duty or tax. There aren’t many products today valued at 17 bucks, so everybody shipping into Canada was paying duty and tax. Now you can ship up to $150 in value without incurring duty.

Instant savings: When the law went into effect in July, one company that I know saved millions of dollars in duty and tax – it literally almost payed for the entire transportation and delivery of their products in Canada.

Something for everyone: For aerospace components shipping out of Long Island and many other manufacturers shipping to Canada, it’s a huge boon. It’s a great opportunity to start marketing and selling products in the Canadian market, and [regional businesses] should be investigating the available opportunities.

Of consul: We’re going to have two consul generals on the (Nov. 5 webinar) panel, which is pretty unique – the consul general in New York for Mexico and the acting consul general in New York for Canada.

Continental divide: The key message is North American countries aren’t the enemy. It’s other regions of the world that are challenging us, and we need to work together to make sure we can win that battle. The USMCA is part of that toolset – it’s a very strong agreement and hopefully it will make us an even stronger trading bloc.

Know thyself: I’ve traveled a lot. I’ve worked extensively with the Canadian Post Office, the TNT division I worked for was headquartered in the UK, I’ve been to every U.S. state except two. I’ve seen how different regions can really get their act together and fight globally, and win. The Netherlands is the size of New Jersey, but they are one of the top investors, globally and right here in the United States. Singapore is the size of Manhattan, but they’re a force to be reckoned with in the Asian market.

Forward march: As much as I love the past – I’m a real advocate of the space program and was a big fan of Grumman when it was here – we need to move on. We need to embrace the biopharma industries here on Long Island, and learn lessons from small countries like Singapore and Belgium. They’ve learned that if they want to compete and have a vibrant economy, great income, great benefits, all the things we want on Long Island, they need to know how to compete globally.

Hang together. Or…: We need a real, long-term strategy that gets everyone on board. There are too many competing forces on Long Island, and unfortunately, if there’s no vision, the people perish. We need a single vision and we need to execute it together, whether we’re in Nassau or Suffolk – a common objective, like I’ve seen in other parts of the world.

Interview by Gregory Zeller

 


1 Comment on "Debrief: For Costanzo, a direct path, largely north"

  1. Encouraging a northward view from LI is a smart strategy. I m a native LI’er who has been involved in economic development as a lawyer and Member of Congress for over 35 years. Need help let me know would be happy to assist.

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