The parcel industry is gaining financial stability after some very difficult times. FedEx and UPS have re-engineered their networks to match supply and demand. They have maintained and improved service at the same time; this is a hard-earned accomplishment by both organizations. However, this is coming at a price to the shipper. DHL’s exit from the domestic parcel market is now a lost memory but will have significant impact to the pricing strategy of the industry. I would like to walk you through a little “focus group” exercise through this article. Please think of the carrier that best “fits” the descriptions below:
a. Domestic ground service _______________________________
b. Domestic air service _______________________________
c. International air service _______________________________
d. B2C (one to three pounds) service _______________________________
e. Canada service _______________________________
f. Regional deliveries _______________________________
I’m sure you answered all of these the same way I did (UPS, Fed Ex, DHL, USPS, Purolator and multiple regional carriers, such as On-Trac, Eastern Connection, Speedee Delivery and Lone Star). The small parcel business is continually changing, and it is up to the shipper to find the best “fit” for your organization. There was a time when the “buzz” in the industry was to bundle your volume to get the best rate for all your services. This sounds great, but not all of the carriers are the best in all services. There are also some industry dynamics happening that offer additional options such as: the regional carriers and parcel consolidators are gaining momentum and are offering similar distribution systems as the big carriers. The USPS is making a hard play in the lightweight B2C business, and DHL has re-established itself in the US as a viable international player.
We are in the early stages of the football season, and I would like to use this as an analogy to the parcel industry. During the pre-season, coaches are looking to find the best players that “fit” their organization from an offensive and defensive perspective. Once they have selected their players, they then adapt (fit) the best players to the right positions that will win them the most games. In the parcel business, it’s all about selecting the right carrier to meet your needs. At the end of the day, it’s all about servicing your internal and external customers.
It’s not about price…it’s about “fit”.
Michael J. Ryan is Director, Business Development at DSC Logistics and has been in the parcel industry for over 25 years. He can be reached at 847-393-5862 or mike.ryan@dsc-logistics.com.
a. Domestic ground service _______________________________
b. Domestic air service _______________________________
c. International air service _______________________________
d. B2C (one to three pounds) service _______________________________
e. Canada service _______________________________
f. Regional deliveries _______________________________
I’m sure you answered all of these the same way I did (UPS, Fed Ex, DHL, USPS, Purolator and multiple regional carriers, such as On-Trac, Eastern Connection, Speedee Delivery and Lone Star). The small parcel business is continually changing, and it is up to the shipper to find the best “fit” for your organization. There was a time when the “buzz” in the industry was to bundle your volume to get the best rate for all your services. This sounds great, but not all of the carriers are the best in all services. There are also some industry dynamics happening that offer additional options such as: the regional carriers and parcel consolidators are gaining momentum and are offering similar distribution systems as the big carriers. The USPS is making a hard play in the lightweight B2C business, and DHL has re-established itself in the US as a viable international player.
We are in the early stages of the football season, and I would like to use this as an analogy to the parcel industry. During the pre-season, coaches are looking to find the best players that “fit” their organization from an offensive and defensive perspective. Once they have selected their players, they then adapt (fit) the best players to the right positions that will win them the most games. In the parcel business, it’s all about selecting the right carrier to meet your needs. At the end of the day, it’s all about servicing your internal and external customers.
It’s not about price…it’s about “fit”.
Michael J. Ryan is Director, Business Development at DSC Logistics and has been in the parcel industry for over 25 years. He can be reached at 847-393-5862 or mike.ryan@dsc-logistics.com.
