1. Green shipping is already here
You dont need to wait for this mega-trend its already happening. By 2010, there will be three main components to shipping decisions: cost (obviously), service (its got to be good, or else the others dont matter) and the environment. And its not just the management at savvy companies that are demanding to know your shipping carbon footprint, its your customers as well. A recent Nike sustainability report indicates that shipping and logistics ranks second only to manufacturing in having the greatest environmental impact and the greatest opportunity for improvements in this key area, while a recent Morgan Stanley report cites that the amount of fuel to deliver the average UPS ground package has actually gone up in four of the last five years!
2. Even bigger changes at the Postal Service: Thinking outside the PO Box
The Morgan Stanley report also asserts that shipping is a real bright spot in USPSs future. Big changes are already afoot at the Postal Service, and those changes will continue over the next several years. One step has already taken place: the promotion of package gurus Jim Cochrane and Gary Reblin, who now report directly to Postmaster General Jack Potter. By the time you read this, some of the new volume-based shipping discount programs will already be in place. And many of you may have already noticed the increases in package tracking information that you are getting from the Postal Service. The new intelligent mail devices have already been deployed to all 303,000 postal carriers. And enhancements and improvements will be made to service offerings across the board, to Priority Mail, Express Mail, return services, Parcel Select, international and more. The two new and larger flat rate Priority Boxes have already hit the market, bringing the total to four. In short, when it comes to shipping, its not your fathers Post Office anymore.
3. Size matters!
The cube of a package is rapidly becoming as important as the weight. Remember the good old days when all you needed to know was the weight? Well, the cube of the package will become at least as important as the weight in the next few years, so you might as well start preparing right now. Why the emphasis on cube? Because regardless of the carrier, planes and trucks tend to cube out long before they hit their maximum operating weight. If at all possible, try to keep your average package under 10 lbs. per cubic foot.
4. B to C shipments will continue to outpace B to B. The Atlanta Journal Constitution recently reported that Business to Consumer shipments for parcel giant UPS are now 30% of the total and growing rapidly. Thats more than a 50% increase since 1999, and that trend will continue and even accelerate for years to come. The downside? It costs the integrated carriers (UPS, FedEx and DHL) significantly more to deliver to residences than to businesses. So expect the cost of B to C shipping to outpace the CPI.
5. Shipping costs for the unwary will continue to rise, as oil hits over $100 per barrel. Weve all seen so-called accessorial fees skyrocket over the last few years, and with oil at over $100 per barrel and rising by the day, its no wonder. And this trend is certain to accelerate over the next few years. Most of the fees with the biggest impact are related to last mile delivery, such as residential and rural surcharges. Heres a tip: use the USPS residential delivery indicator file, which is the only foolproof way to determine whether an address is a residence, before you ship.
6. Ground shipping is no longer up in the air. The big shift from air to ground shipments started a few years ago and will continue for the foreseeable future. A number of factors are driving this trend, not the least of which is the ever-widening gap between air (currently over 20%) and ground (six percent). Another contributing factor is the recent ground transit time improvements by UPS, FedEx and the Postal Service.
7. Your customers will want to play a bigger part in your shipping decisions.
As you probably already know, your customers shipping expectations are continuously on the rise. They not only want free shipping, they want it there faster, and they want to know precisely where that package is, from the time it leaves your distribution center until the time its delivered (and you probably do too!). But now they want something more they want a stake in which carrier you use. Dont believe me? Just check out customer feedback websites such as My3cents.com. Hopefully the shipping horror stories wont mention your company by name!
This article is a preview of Shoshana Groves and Doug Caldwells super session at the Postal Forum. If you werent able to make it to the session, drop Doug a line at Doug.Caldwell@ParcelPool.com, and he will email you a copy of the presentation.
