The battle for small- to medium-sized businesses (SMBs) is underway as logistics providers, including FedEx and UPS, introduce new services to attract this segment. The allure of this group of businesses is the fact that combined, these businesses make up 99% of all US businesses; in terms of employment, they make up 47.5% of all US employees and generate 33.0% of US total exports.
Thanks to cloud-based technology, many SMBs have been able to compete against larger competitors on a more leveled playing field – inventory and transportation management, booking and tracking freight movements, payments, and more can all be done online and at a lower cost compared to several years ago when one had to pay for licenses and software updates every six to 12 months.
FedEx and UPS, in particular, are introducing a number of service offerings to attract this business group by adding a host of fulfillment and transportation solutions.
In 2017, FedEx Supply Chain introduced FedEx Fulfillment, which is an e-commerce solution that offers warehousing, fulfillment, packaging, transportation, and reverse logistics to support multiple channels, including websites and online marketplaces.
UPS answered back by introducing their Where to Go solution, a nationwide turnkey fulfillment service that partners with various warehouse operators to provide fulfillment services closer to the final customer.
In addition, UPS eFulfillment was launched in 2019 and offers small and medium-sized businesses worldwide fulfillment and shipping services to consumers in the US and Canada. This online platform supports purchases and orders from 21 different marketplaces and web stores, such as eBay, Walmart, Etsy, and Amazon, including Prime.
Both UPS and FedEx have also established partnerships with various digital platforms, but UPS has taken it a step further by establishing its UPS Digital Access Program. Through this program, UPS is establishing preferred relationships with digital platforms such as Stamps.com and Shopify and providing discounted UPS shipping rates and other shipping and logistics solutions to their merchant customers.
Flat rate shipping was recently introduced by UPS, which enables SMBs to ship by UPS 2nd Day Air, UPS 3 Day Select, and UPS Ground services to anywhere in the US for a flat rate. According to UPS, SMBs can accurately predict and manage their shipping costs and bill their customers without incurring unexpected fees. With the UPS Simple Rate, SMBs are able to use their own boxes and packaging sized to fit their products. FedEx’s Flat Rate program, which was rolled out before the UPS Simple Rate service, has been recently modified and now offers its customers the ability to use their own boxes and packaging as well.
With expectations of cross-border e-commerce making up 20% of e-commerce by 2022, UPS also introduced UPS Worldwide Economy a few months ago and recently expanded the service to Europe. UPS Worldwide Economy transports low-weight, low-value international shipments from the United States to select destination countries with final delivery through either the i-parcel, LLC network or the UPS Expedited Mail Services, Inc. depending on needs of the customer.
The SMB market is an important one to many logistics and transportation providers particularly as e-commerce grows and Amazon’s influence spreads. An increasing number of solutions are now available and SMBs will need to compare options wisely in order to save on costs while keeping their customers happy. Never forget the customer needs but at the same time, understand what the options are and the costs associated with each before deciding what services to use.
John Haber is founder and CEO, Spend Management Experts.
This article originally appeared in the November/December, 2019 issue of PARCEL.