I had the opportunity for over three decades to be a peddler of Parcel Services. I can recall one day getting a call from Dick Ward, the corporate traffic manager of Burroughs Corporation, headquartered in Detroit. He was none too happy and demanded the pleasure of my company as soon as I could get to One Burroughs Place. The cause of his ire was that my employer (Airborne at the time) had come out with a special express pack box just for the movement of computer tapes (large quantities of mainframe data moved on pizza-sized spools at the time). He had heard from one of his field traffic people what a fantastic product this was and that Burroughs should be telling the shipping sites and customer sites about using this free box.

     

    At the time, Burroughs was Airbornes largest account, as measured in terms of shipments. It was my sale and my account. I had a great relationship with Dick and considered him a mentor. When I got to his office, he read me the riot act. His face was red, and the veins on the side of his neck were bulging. The cause of his irritation was that he heard about this new offering not from me, but from one of his field people. He was embarrassed that he didnt know about the product, and he was embarrassed that he was not the one pushing the information down through his organization. He taught me a valuable lesson, and he made me promise that when every new feature, service or product offering came across my desk, that he be the first person I called. He said that the existing customers often are the last to know because peddlers just want to chase the next big sale. He was right on.

     

    Since I retired last year, I have had the opportunity to witness firsthand from the shipper side of the equation this very phenomenon. Over the last 14 months, I have had calls from numerous shippers who have solicited my help, advice and assistance in the competitive bid process of their traffic and in the negotiation of new parcel contracts. Herein lies the heart of the matter. The worst friend you have on the planet is the sales rep assigned to you from your incumbent carrier.

     

    Say What?

    Why do I say this? The last person on earth that will tell you that you are entitled to lower rates, increased incentives, reduced or waived accessorial charges, later pickup times, earlier inbound delivery times and so on is the rep calling on you. After all, the Key Performance Indicator for his or her worth to the company is how much the company can charge you, not how much it can save you. Its just counter-intuitive for the rep to extend the latest and greatest incentives to you.

     

    Conversely, the hungry dog is the sales professional from the competition who will literally give the store away to land a new shipper who can put freight on the dock. Even in the competitive bid environment, there tends to be a flavor of arrogance on the part of all of the big parcel carriers when it comes to pricing an existing deal. I guess they are counting on the strength of their
    relationship and the potential cost of change. In some cases, I have witnessed badmouthing the competition in order to create a sense of fear, uncertainty and doubt in the mind of the shipper. (If you switch, you will not get the extraordinary service levels you have come to appreciate with us and therefore, you will lose your job or your customers or your credibility with your superiors. Or perhaps even more intimidating: By the way, if you are thinking of changing, I will call your boss.)

     

    Dont Miss Out

    Recently, I had the sad experience of watching an incumbent totally hang his pitch on the re-bid of one of his multi-million dollar accounts on how many soft dollars his companys web-based desktop shipping solution could save his client. After he presented these technical features and benefits, I asked, How long has your firm had this offering and these features? He boasted that it was at least five years and added that these features have been tried and tested and he could back up the savings claims. I then asked, How long have you had the current contract with this shipper? Three years was the answer. I had to point out that they had kept their valued customer in the dark for the entire duration of the contract, and only faced with competition did they share with the shipper that they had these offerings. So his client could have saved all these soft dollars over the last three years, and now, the money was foregone. To add insult to injury, I asked if the other express carriers had similar desktop, web-based solutions with similar features. The response dont guess, let me tell you: We dont ship with the other guys, so we dont know. Ouch.

     

    And now for the rest of the story. I knew the answer to that question before I asked it. I made it my business, as a sales professional, to know more about my competitions products than my own. I could quickly show what features I had that were superior to the competition. One feature that my client was looking for (showing the prices of all the service offerings and the delivery commitment to the employee prior to picking the service and printing the label) was not a feature this incumbent carrier had as an off-the-shelf offering they had to go speak to the chairman or something, before they could offer it for free to this shipper but the carrier that won this bid did. In fact, they have it as a standard offering, and the rep had even taken the time to do an analysis of the shipment history of this shipper to show how many of the air shipments could have received the same, or earlier, delivery had ground service been substituted for air. The soft dollars were easily translated to hard dollars for the shipper. The last thing the incumbent wanted was for the shipper to see that over 50% of its air shipments fell into this category.

     

    So whats a body to do? Pay attention, and listen to me for a minute. Your best friend is the carrier rep for the carriers you are not using. They can help you the most. Not the person getting the commission or bonus or incentive compensation pay for your current book of business. The only way to keep him or her sharp and paying attention is if he or she knows you have an active and healthy relationship with the enemy. Keep your door open to the other carriers. Make it a practice to see them regularly to forge a relationship and learn as much about their offerings and their take on the industry. Make sure the rep signs the log book in the reception area so your incumbent carrier knows the heat is on when he or she signs in.

     

    Keep an open mind about service. Its my experience for the last 13 months that there is no discernible, measurable statistical difference in the transit performance offered by the big three for parcels under 70 pounds. I have done empirical studies of all three using actual shipment data with very large samples, and I can say with certainty that none of the big three have a superior offering to the other.

     

    So keep your door and mind open to the reps of all the parcel carriers. You may not need them today, but make sure you have a friend for tomorrow. You never know what might happen. For example, I predicted in the summer of 1997 that UPS would not go on strike, so nobody should be worrying and planning a contingency. So much for my crystal ball.  Memphis, the hub of one of the carriers, sits on the New Madrid earthquake fault. Who ya gonna call if that airport has to close for a few months? The worst that can happen is that you get a real competitive offering from all the carriers when the time comes.

     

    Jerry Hempstead retired from the parcel industry in January of 2006 after over 32 years of service and is currently the busiest guy not working in the industry. Contact him at gmhempstead@aol.com.

     

    Follow