When thinking about parcel shipping options today most shippers would say there are only two; UPS and FedEx. Many feel that their hands are tied and that they are “captive” to the two carriers. Although the two carriers remain excellent options for moving parcels on behalf of shippers, there are additional options that could be utilized to optimize the shipper’s business model. Sometimes the options may take the place of current methods, but in most cases other options are used for specific shipments in conjunction with shipments given to UPS and FedEx.
What are the options, and how can shippers make the right decisions on which to use, and when to use them? The answer is finding someone that can learn and objectively understand a shipper’s business model and goals, the key word being “objectively”. If a shipper’s only advice comes from one, or both, of the two carriers then they will be given options that fit within the “national carrier” model and they will be limited to two choices. Shippers should enlist the help of a 3rd Party Consultant who understands, not only the options provided by the two main carriers, but also others in the marketplace. With the recent hype about 3rd Party Negotiators (notice the distinction from Consultants) I should emphasize that the 3rd Party Consultant should be a true consultant and not just someone focused on negotiating better rates with the two carriers. Helping a shipper understand how best to negotiate may be a part of the services provided, but it should not be the only service.
Options that should be considered and explored will vary dependant on each shipper’s unique characteristics and business objectives. Examples of options to explore should include, but not be limited to, the following:
- Regional Parcel Carriers
o Shippers sending parcels mainly in a specific region, or regions, may find better service levels and/or cost savings by using one or more regional carriers.
o Shippers sending heavily in a specific region and nationwide may find a combination of regional carrier(s), along with one of the national carriers, optimal for them.
- USPS
o Shippers sending low weight ground shipments may find better service and cost advantages using USPS Priority Mail
o Shippers sending a high percentage of ground shipments to residential addresses may find better service and cost advantages using USPS options
o Many things should be considered before dismissing the USPS as an option
--Did you know that the USPS has improved tracking in the last year?
--Do you realize the USPS does not add Residential Surcharges, Fuel Surcharges, etc.?
--Are you aware that the USPS has overcome many of the historical objections given by shippers for not using the service?
- LTL
o Many shippers that do not do enough LTL to receive competitive pricing on their own may benefit from the use of a broker.
--A good 3rd Party Consultant can either provide brokerage service or recommend one
--A good 3rd Party Consultant can help determine what weight ranges are best to move via the carriers Hundredweight/Multiweight and which are best to move via LTL for your specific shipment characteristics and pricing
o Shippers that do ship enough to warrant negotiating directly with LTL carriers can also benefit from a 3rd Party Consultant
--A good 3rd Party Consultant will know which method is best for the shipper
--A good 3rd Party Consultant will have the ability and knowledge to negotiate for a shipper or advise the shipper when they negotiate themselves.
In summary, many shippers today are unaware that there are more options for shipping their parcels than just the two main national carriers, UPS and FedEx. Because shippers must be caught up, and rightfully so, in their business they do not have time to keep up with all shipping options available to them. Shippers may not possess in-depth knowledge of, or even be aware of all options available in the market. Engaging the services of a good 3rd Party Consultant can help ensure all viable options for a shipper’s specific needs are explored. Engaging a good 3rd Party Consultant will have a positive impact on a shipper’s business, no matter the amount of shipping that they do. iDrive has helped clients with all of the services listed above and many more. Our clients range in size of shipping budget from tens of thousands of dollars, to over 100 million dollars. Each client has recognized an improvement in service, or cost, and in most instances both by enlisting our help. Engaging a good 3rd Party Consultant in your business, whether it is iDrive Logistics or another quality firm, will help you learn more about all the options that are available to you so you can make more informed, and therefore better, business decisions.
Carl Hutchinson is the Executive Vice President of iDrive Logistics and has 25 years experience in the Transportation and Logistics industry. He can be reached at carl@idrivelogistics.com.
What are the options, and how can shippers make the right decisions on which to use, and when to use them? The answer is finding someone that can learn and objectively understand a shipper’s business model and goals, the key word being “objectively”. If a shipper’s only advice comes from one, or both, of the two carriers then they will be given options that fit within the “national carrier” model and they will be limited to two choices. Shippers should enlist the help of a 3rd Party Consultant who understands, not only the options provided by the two main carriers, but also others in the marketplace. With the recent hype about 3rd Party Negotiators (notice the distinction from Consultants) I should emphasize that the 3rd Party Consultant should be a true consultant and not just someone focused on negotiating better rates with the two carriers. Helping a shipper understand how best to negotiate may be a part of the services provided, but it should not be the only service.
Options that should be considered and explored will vary dependant on each shipper’s unique characteristics and business objectives. Examples of options to explore should include, but not be limited to, the following:
- Regional Parcel Carriers
o Shippers sending parcels mainly in a specific region, or regions, may find better service levels and/or cost savings by using one or more regional carriers.
o Shippers sending heavily in a specific region and nationwide may find a combination of regional carrier(s), along with one of the national carriers, optimal for them.
- USPS
o Shippers sending low weight ground shipments may find better service and cost advantages using USPS Priority Mail
o Shippers sending a high percentage of ground shipments to residential addresses may find better service and cost advantages using USPS options
o Many things should be considered before dismissing the USPS as an option
--Did you know that the USPS has improved tracking in the last year?
--Do you realize the USPS does not add Residential Surcharges, Fuel Surcharges, etc.?
--Are you aware that the USPS has overcome many of the historical objections given by shippers for not using the service?
- LTL
o Many shippers that do not do enough LTL to receive competitive pricing on their own may benefit from the use of a broker.
--A good 3rd Party Consultant can either provide brokerage service or recommend one
--A good 3rd Party Consultant can help determine what weight ranges are best to move via the carriers Hundredweight/Multiweight and which are best to move via LTL for your specific shipment characteristics and pricing
o Shippers that do ship enough to warrant negotiating directly with LTL carriers can also benefit from a 3rd Party Consultant
--A good 3rd Party Consultant will know which method is best for the shipper
--A good 3rd Party Consultant will have the ability and knowledge to negotiate for a shipper or advise the shipper when they negotiate themselves.
In summary, many shippers today are unaware that there are more options for shipping their parcels than just the two main national carriers, UPS and FedEx. Because shippers must be caught up, and rightfully so, in their business they do not have time to keep up with all shipping options available to them. Shippers may not possess in-depth knowledge of, or even be aware of all options available in the market. Engaging the services of a good 3rd Party Consultant can help ensure all viable options for a shipper’s specific needs are explored. Engaging a good 3rd Party Consultant will have a positive impact on a shipper’s business, no matter the amount of shipping that they do. iDrive has helped clients with all of the services listed above and many more. Our clients range in size of shipping budget from tens of thousands of dollars, to over 100 million dollars. Each client has recognized an improvement in service, or cost, and in most instances both by enlisting our help. Engaging a good 3rd Party Consultant in your business, whether it is iDrive Logistics or another quality firm, will help you learn more about all the options that are available to you so you can make more informed, and therefore better, business decisions.
Carl Hutchinson is the Executive Vice President of iDrive Logistics and has 25 years experience in the Transportation and Logistics industry. He can be reached at carl@idrivelogistics.com.
