The last few months have seen some dramatic changes in the shipping industry. Former competitors like the U.S. Postal Service and FedEx are launching joint ventures. UPS is announcing several significant acquisitions. And other companies are expanding their levels of service by offering new products. Nows the best time to re-examine what youre shipping and the carriers youre using.
There are two ways to look at shipping: what size packages youre sending and how quickly those packages need to be delivered. By examining both of these factors, you can choose the right carriers for you.
Size matters
The size of the package really does matter. Small packages or parcels are larger than a flat envelope but weigh less than 150 pounds. For the USPS, parcels are subject to a two-pound minimum rate and have a maximum weight of 70 pounds. A carriers Web site should list the weight limits of what it will move. For example, some carriers set limits by actual weight (150 pounds) and by dimensional weight. The dimensional weight is calculated by measuring the length, width and height of a package.
Packages that exceed these measurements are typically labeled freight divided between LTL (less than truckload) and full freight. You may want to combine several small parcels into a single container to qualify for freight class. Freight is generally cheaper per pound to move but other restrictions apply.
Service counts
Now that youve classified the piece, what type of service are you looking for? In this case, its easier to start with the slowest and move toward the fastest type of delivery ground service. The name says it all. Ground service means using trains and trucks to move packages from your office to your customer. Each company can provide you with a zone sheet that delineates the time it takes a package to move from one zone to another. Because of road conditions, delivery times are not guaranteed.
Ground shipping may provide the most cost-effective solution for your company, especially if you and your clients are in the same zone. Many carriers provide next day ground service within the same metropolitan area and two-day service within the same zone. This is a great opportunity to save on overnight shipping costs but only if you have no concerns about the package arriving later.
Another type of service is called expedited. Most people think of expedited as only overnight delivery, but virtually every carrier provides two-day and three-day service. For this type of service, the carrier is guaranteeing that it will deliver your package within a specified timeframe. If the carrier fails to meet the delivery time, then you dont have to pay the shipping charges. Typical service categories include:
Category Description
Early next morning Delivery before 9 AM
next business day
Next morning Delivery before 10:30 AM
next business day
Next day Delivery before 4 PM
next business day
Two day Delivery before 4 PM
second business day
Three day Delivery before 4 PM
third business day
Carriers use their branded names for the types of services they offer (delivery times may vary). Read the service guides of each carrier to accurately compare their services before making your selection. Also, choose a carrier that can provide online tracking of your packages and parcels.
If next day isnt fast enough, theres always same day delivery. This premium service moves your package via airline to provide delivery the same day you ship. With a premium service comes a premium price, so you must be sure this type of service is feasible and necessary. If the package arrives the same day but after 6 PM will anyone be there to receive it? Would early morning delivery offer the same benefits?
Its important that you provide the right type of service for your internal customers. For example, you may choose next morning, when next day would be more appropriate. The result: thousands of dollars in overspending.
The players
Until a few years ago, the type of service you wanted determined your choice of carrier. Through mergers, acquisitions and extended service offerings, most companies now offer most services. Again, its important to review the carriers service guides for time guarantees, tracking capabilities, weight limits, etc. before making your decision.
The national end-to-end shippers include (in alphabetical order):
Airborne Express Provides same day, overnight delivery
and logistics.
DHL Primarily known as an international carrier, provides extensive service in the US.
FedEx Creator of the overnight letter, now offers all the services previously listed.
United Parcel Service The oldest private carrier, now offers a complete range of services.
United States Postal Service Handles more than letters and delivers to every address, six days a week.
Also, there are regional carriers that provide overnight ground service in particular areas. For example, Eastern Connection services the New England-Washington DC corridor and partners with airlines and other couriers for national same day service. The airlines and trucking companies are also partnering with local carriers to provide expanded services in this highly competitive market.
Add to this mix the new groups of service bureaus including drop shippers and logistics providers. Drop shippers deal primarily with flats and small parcels, sorting packages at regional facilities. Using a private carrier or express mail, these drop shippers drop packages into local Sectional Center Facilities (SCF), Destination Delivery Units (DDU) and Bulk Mail Centers (BMC). Utilizing drop shippers, you can experience delivery times similar to First Class mail, at prices closer to standard rates.
Logistics providers are unique. Working with the previously mentioned carriers, as well as with large shippers, logistics providers offer region-to-region services at the lowest cost. In fact, some carriers operate their own logistics units and use third parties such as AIT Worldwide Logistics, Fritz and Hassett Air Express.
How do I choose?
With all of these offerings, how do you choose the right provider for your company? Very carefully. Start with the types of packages youre shipping and the service times you need to provide your customers. Research each of the carriers that provide the services you require to make sure their standards correspond to your needs. When possible, test the carriers to ensure they measure up to their advertising.
After you choose a vendor, youre not done. Its imperative that you monitor the carriers performance on a regular basis. If youre not able to check every shipment, there are service bureaus that can do it for you.
Most importantly, you must educate your customers and staff so theyll choose the right service from the right vendor every time.
Mark M. Fallon is president and CEO of The Berkshire Company, a consulting firm specializing in mail and document processing strategies. For more information, please visit The Berkshire Company Web site at www.berkshire-company.com.
