It’s been 30 years since Eastern Connection opened its doors on Valentine’s Day in 1983 as a regional parcel delivery service. Since then, we’ve lived through dramatic events and industry changes, including the advent of the Internet, a major strike by UPS, terrorist activity, and the void left after DHL, the perceived lower-price alternative among the industry giants, suspended domestic services.
What hasn’t changed in three decades is the need among shippers to have an alternative way to deliver their goods. Cast as David against Goliath, regional carriers offered a business model that was different from the giants: a ground service that provides later pickups and earlier deliveries at a lower price. Today, regional carriers continue to apply this business model and gain market share because of another dynamic that hasn’t changed: Time is money, and companies looking to cut costs are increasingly not satisfied with business as usual.
Let Revisit the Age-old Advantages of the Regionals
Cost. With lower operating expenses and a reliance on ground versus air transport, the regionals have always offered better pricing than the giants. This includes not only lower base rates but also fewer accessorial charges and hidden fees, such as earlier deliveries and special handling charges. Many of these charges aren’t transparent to shippers, but they add up. The bottom line? Recent surveys show that regionals are approximately 20% more cost-effective than the nationals for overnight as well as two-day deliveries. That can translate into millions of dollars of savings.
Flexibility. Recognizing the time-sensitive nature of many businesses, regionals have traditionally offered later pickups and earlier deliveries. Most regional services are open 24/7, often operating even when airports are closed. Around-the-clock services are particularly important to those companies that are open all night and those that require critical shipments such as medical supplies first thing in the morning, before the standard 10:30 a.m. deliveries. This flexibility applies to next-day service as well as deferred service, where the regionals can often guarantee two-day delivery compared to three or more days with the giants.
Personalization. It’s hard to quantify the value of personalized service, but shippers tend to prefer dealing with friendly, familiar customer service reps who don’t make them feel like they’re just a number. Sometimes, this includes the ability of the driver to enter “beyond the threshold” into a business or home.
These built-in advantages of regional services have been well-documented. Why, then, haven’t the regionals made greater inroads against the nationals? Certainly, the nationals offer one-stop service that covers all zones in the country and abroad; they also enjoy a perception that their service is more reliable than their poorer cousins can provide.
But Let’s Examine Myth vs. Reality
First, regionals are expanding their scope. Today, they cover almost 90% of the nation’s ZIP Codes — and that footprint is expanding.
Second, what about the notion that nationals provide a higher quality service? Actually, the regionals, with fewer exchange points, have always had less margin for error. And now they can provide technology on the same par as larger competitors. With web-based shipping, barcoding, mobile scanners, and integrated shipping systems, technology is becoming a commodity. Accordingly, you should determine how your carrier shapes up in terms of on-time and intact package delivery.
Finally, let’s be clear about this: No one is suggesting that the regionals will replace the nationals. Rather, it’s a question of finding the right combination of complementary services that meet your particular needs.
So do your homework. Weigh your options. Put your carrier to the test. Because today, more than ever, it’s good to have options when it comes to delivering the goods.
Jim Berluti is President & CEO of Eastern Connection, the largest regional small-package overnight carrier on the East Coast, covering over 5,000 ZIP Codes in the Northeast. The company, which has 17 facilities, is open 7 days a week and 365 days a year. Services include Next-Day Ground, Priority Overnight, Same-Day, Second-Day, Logistics & Warehousing, Trucking, and Expedited Mail. For more information, visit www.easternconnection.com.
What hasn’t changed in three decades is the need among shippers to have an alternative way to deliver their goods. Cast as David against Goliath, regional carriers offered a business model that was different from the giants: a ground service that provides later pickups and earlier deliveries at a lower price. Today, regional carriers continue to apply this business model and gain market share because of another dynamic that hasn’t changed: Time is money, and companies looking to cut costs are increasingly not satisfied with business as usual.
Let Revisit the Age-old Advantages of the Regionals
Cost. With lower operating expenses and a reliance on ground versus air transport, the regionals have always offered better pricing than the giants. This includes not only lower base rates but also fewer accessorial charges and hidden fees, such as earlier deliveries and special handling charges. Many of these charges aren’t transparent to shippers, but they add up. The bottom line? Recent surveys show that regionals are approximately 20% more cost-effective than the nationals for overnight as well as two-day deliveries. That can translate into millions of dollars of savings.
Flexibility. Recognizing the time-sensitive nature of many businesses, regionals have traditionally offered later pickups and earlier deliveries. Most regional services are open 24/7, often operating even when airports are closed. Around-the-clock services are particularly important to those companies that are open all night and those that require critical shipments such as medical supplies first thing in the morning, before the standard 10:30 a.m. deliveries. This flexibility applies to next-day service as well as deferred service, where the regionals can often guarantee two-day delivery compared to three or more days with the giants.
Personalization. It’s hard to quantify the value of personalized service, but shippers tend to prefer dealing with friendly, familiar customer service reps who don’t make them feel like they’re just a number. Sometimes, this includes the ability of the driver to enter “beyond the threshold” into a business or home.
These built-in advantages of regional services have been well-documented. Why, then, haven’t the regionals made greater inroads against the nationals? Certainly, the nationals offer one-stop service that covers all zones in the country and abroad; they also enjoy a perception that their service is more reliable than their poorer cousins can provide.
But Let’s Examine Myth vs. Reality
First, regionals are expanding their scope. Today, they cover almost 90% of the nation’s ZIP Codes — and that footprint is expanding.
Second, what about the notion that nationals provide a higher quality service? Actually, the regionals, with fewer exchange points, have always had less margin for error. And now they can provide technology on the same par as larger competitors. With web-based shipping, barcoding, mobile scanners, and integrated shipping systems, technology is becoming a commodity. Accordingly, you should determine how your carrier shapes up in terms of on-time and intact package delivery.
Finally, let’s be clear about this: No one is suggesting that the regionals will replace the nationals. Rather, it’s a question of finding the right combination of complementary services that meet your particular needs.
So do your homework. Weigh your options. Put your carrier to the test. Because today, more than ever, it’s good to have options when it comes to delivering the goods.
Jim Berluti is President & CEO of Eastern Connection, the largest regional small-package overnight carrier on the East Coast, covering over 5,000 ZIP Codes in the Northeast. The company, which has 17 facilities, is open 7 days a week and 365 days a year. Services include Next-Day Ground, Priority Overnight, Same-Day, Second-Day, Logistics & Warehousing, Trucking, and Expedited Mail. For more information, visit www.easternconnection.com.
