Times Are Good… Right?
Published on August 22, 2011 in Articles
The parcel industry is humming along… the major players (FedEx & UPS) are having great financial years and providing high quality service. This is nirvana… right? The parcel industry has gone through a difficult time and they have maintained their service levels. However, I believe that this could cause some complacency in the market. The domestic air and ground markets are driven by two primary competitors and the USPS that is trying to be the new challenger brand. As a shipper, this is a great time to open your play book and try some new and old ideas again. Here is a list of actions that I would recommend that you look into in driving the most value for your small parcel spend:
1. Network: You need to network with peers in the industry to learn from each other. There are many large companies that are similar to yours and not competitors. Grab a lunch with a neighbor company or attend a local CSCMP local round table session.
2. Benchmark: The parcel carriers don’t like the “B” word. This could expose that you don’t have the best deal. This is very powerful information.
3. Carrier Rep Relationships: Build strong relationships with your carrier reps…they are your voice to the Corporate office.
4. Collaboration: This is a way to enable a win-win situation with the carrier.
5. PARCEL Forum: Attend the Parcel Forum in Chicago on October 24-26, 2011 (www.parcelforum.com). There are great ideas shared at this event… not to mention the best networking event in the parcel industry.
6. Parcel Consolidators: These companies offer a great solution for B-2-C shipping (UPS Mail Innovations, FedEx Smartpost, DHL Globalmail, Streamlite and Blue Package). Get them in to understand how this solution can add value to your company.
7. Data Analysis: You need to review your spend on a annual basis. This will give you an understanding where your business has changed and where there may be savings opportunities. If you do not have the tools or skills to do this, then hire a parcel consultant.
8. Parcel Consultant: There has been a lot of chatter about the consultants but they truly bring value to the table for the shipper. I have not heard from one shipper that has not received the value from the consultant. They are experts in the parcel business.
9. Demand Management Software: If you are not using this technology, then you are overspending. The carriers have made it very easy to ship an overnight package to a next day ground ZIP Code. An educated user should be your goal…all they need is a tool and a little education.
10. Regional Carriers: They provide a unique solution to the right situation. They have made great strides in their service offerings and technology. Please do not use information that you have from five years ago to evaluate them… call them back in.
11. Zone Skipping: This has been around for a long time but I do not see many shippers taking advantage of it. It cost less and is a better service…what are you waiting for?
12. USPS: They are the new “Challenger” brand. They are re-defining themselves and offer a solution that is hard to beat. If you are shipping 1-5 pound B-2-C shipments, they should be part of your solution.
13. DHL: They are still a strong international player in the US but it would be great to see them re-enter the domestic overnight business in the US. This would put pressure on the two large player’s most profitable business which would be good for the US parcel shipper.
14. Bid: Last but not least, keep put your business out to bid on a semi-annual basis…this keeps everyone honest.
The parcel industry is experiencing some good times. As a shipper, please use this time to fine tune your own parcel shipping. It is best to do when the carriers are making money.
— Michael J. Ryan
written for August 2011 issue of Parcel