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HOME / Articles / Small but Important

Small but Important
Published on June 13, 2011 in Articles

The international small parcel business in the US is estimated to be a $10 billion + market and growing seven to 10%. DHL Worldwide Express restructured its US operation and exited the domestic air/ground in February 2009, which has changed the landscape of the US market. DHL has done a great job in re-inventing itself to its original roots as an international small parcel provider. Their operation in the US is at one of its highest levels of service in the company’s history. It’s amazing what happens when a company will focus on its core competencies. However, DHL is a small player compared to Fed Ex, UPS and the USPS. On a global scale, DHL still maintains a “market leader” position.

As DHL has re-structured its US operation, it has re-established itself as a real contender in the global air express market. With all this being said, the small international shipper in the US has taken on a new priority. DHL has recognized that this is a critical market segment in order to be successful in the US. However, it does not have the resources to effectively sell and retain this segment. This SMB segment is estimated to be worth $ 2 billion+ and considered to be the most profitable.

In an effort to grow and maintain this business, DHL has established a new channel strategy for this. It has contracted with three authorized resellers in the US and they are as follows: Preferred Shipping: www.preferredship.com | Pro Star Logistics: www.prostarlogistics.com | InXpress: www.inxpress.com.

These three organizations have a special contract to sell and service small international shippers. This allows the small international shippers to get better discounts and a higher level of service… just like the big shippers. This has been designed for customers that do not currently use DHL’s services. The DHL re-sellers are well-positioned because DHL’s market share is about 10% in the US.

International small parcel shipping is a bit more complicated than a domestic parcel. It requires the carrier and/or reseller to offer up a more personal approach, which is where the resellers provide great value to the small international shipper.

“The small international shipper needs more attention and support because of these complexities,” states George Flowers, the CEO of Preferred Shipping. His organization has the longest relationship with DHL (19 years) and has developed a model that creates a personal approach with the customer. The international small parcel business in the US is “Small but Important”… to both the carriers and shippers.

— Michael J. Ryan
written for May/June 2011 issue of Parcel