PARCEL
JULY-AUGUST 2014
www.PARCELindustry.com
REVOLUTIONIZING
HI-VALUE SHIPPING With TransGuardian, the USPS & Wells Fargo Insurance page 13
Special Hot Companies Issue! Get to know the players in the industry. Starting on page 16
5 WAYS TO MITIGATE the impact of DIM pricing. Page 7
OPTIMIZING DTC parcel delivery. Page 32
IS SOMEDAY’S same-day delivery today? Page 36
Pictured above: Michael C. Fitzpatrick, VP Wells Fargo Insurance | Patrick R. Donahoe, Postmaster General of the United States | Madlene Moseley, COO/CFO, TransGuardian | Jim Moseley, CEO, TransGuardian | Original Wells Fargo Coach at PCC Gold Rush at the Pasadena Rose Bowl
PARCEL
JULY-AUGUST 2014
www.PARCELindustry.com
SPECIAL
HOT COMPANIES
ISSUE! Get to know the players in the industry. Starting on page 16
5 WAYS TO MITIGATE the impact of DIM pricing. Page 7
OPTIMIZING DTC parcel delivery. Page 32
IS SOMEDAY’S same-day delivery today? Page 36
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PARCEL
CONTENTS JULY-AUGUST 2014 | volume 21 | issue 5
Features Departments 06 Editor’s Note
Staying on Your Toes By Amanda Armendariz
07 Transportation ABCs
5 Ways to Mitigate the Impact of DIM Pricing By Jim Haller
08 Going Global
Canada Shipping Options Can Deliver Big Savings By Doug Caldwell
32 Unlock and Diversify: Optimizing DTC Parcel Delivery By Jaris Briski
10 Operational Efficiencies Pleading the Investment Case to Executives By Susan Rider
11 Ship Right
Parcel Size Matters in 2015: How to Navigate Changes in Shipping By Jim Hendrickson
12 Supply Chain Pivot 34 Overcoming Logistical
Challenges with Creativity
36 Is Same-Day’s
“Someday” Today?
Unique relationships with carriers help keep packages flying out the door
By Andrea Obston
4
JULY-AUGUST 2014 | www.PARCELindustry.com
By Rob Shirley
13 Application Article
Revolutionizing Hi-Value shipping with Wells Fargo Insurance & the USPS
Hot Companies 16 Agile Network 17 CT Logistics 18 Datatrac 19 EAM-Mosca Corporation 20 Eastern Connection 21 Engineering Innovation, Inc. 22 enVista 23 LaserShip
Transportation Disruption
24 25 26 27 28 29 30 31
14 Spend Perspectives Melissa Data Neopost NPI OnTrac PITT OHIO Postea Stamps.com U.S. Cargo
Enter the Peak Season with a Plan
By John Haber
40 Parcel Counsel
Damages, Damages, Damages: Part II By Brent Wm. Primus
41 Wrap Up
Multi-carrier Strategy By Michael J Ryan
president chad griepentrog publisher marll thiede editor amanda armendariz
[ amanda.c@rbpub.com ]
Audience Development Manager rachel chapman [ rachel@rbpub.com ]
marketing cierra bauer creative director kelli cooke advertising ken waddell
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PARCEL (ISSN 1081-4035) is published 6 times a year by RB Publishing Inc. All material in this magazine is copyrighted 2014 Š by RB Publishing Inc. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to PARCEL, RB Publishing Inc. or its staff becomes the property of RB Publishing, Inc. The articles in this magazine represent the views of the authors and not those of RB Publishing Inc. or PARCEL. RB Publishing Inc. and/or PARCEL expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine. SUBSCRIPTIONS: Free to qualified recipients: $12 per year to all others in the United States. Subscription rate for Canada or Mexico is $35 for one year and for elsewhere outside of the United States is $55. Back-issue rate is $5.
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5
EDITOR’S NOTE BY AMANDA ARMENDARIZ
Staying on Your Toes Are you signed up for our e-newsletter? he parcel industry changes rapidly; it’s not something in which one can be a passive player. From the recent announcements regarding the DIM pricing changes that will take place in January, to diversifying your carrier portfolio, to competing with the mega-retailers who can (in some select markets) provide same-day delivery, the parcel industry is one that keeps professionals on its toes. This issue of PARCEL is an excellent one for helping you navigate the constantly changing waters. Not only is it our annual hot companies issue, in which we profile some of the leading players in the industry so that you can get to know them before you buy from them, but it’s also a look at some of the most pressing issues that logistics professionals are facing. We know how important education is, which is why we strive to always deliver coverage on a variety of issues. But, just like how customer preferences and shopping behavior are changing, so is the magazine industry. We know that it’s very rare for our subscribers to only access our magazine for information. So we strive to ensure that our website, our webinars, and our trade show, the PARCEL Forum, are also premier venues for information sharing among professionals. Which makes this a great time for me to remind everyone that if you haven’t already, time to register for the PARCEL Forum is running out. Our show is taking place in almost exactly two months, and for the first time, we’re deviating from our normal Chicago location and putting on the show in Dallas! We at PARCEL are quite excited for this change, and we’ve got a great show lined up. So check out www.PARCELforum.com and we’ll see you there! As always, thanks for reading PARCEL.
If not, what are you waiting for? As of press time, these were some of our most popular articles from recent e-newsletters:
• Minimum Billable Weight and the Lightweight Air Shipper • Announcing the upcoming UPS and FedEx Dimensional Weight Penalty – Are You Prepared? • Navigate Distribution Challenges Efficiently with Pick-to-Light Strategies • USPS leveraging lightweights to contend with heavyweights To get great articles like these emailed to you on a monthly basis, just scan the QR code above, or go to www.PARCELindustry.com and click on the “Newsletter” tab a the top of the page.
Thursday’s Tip
Have you signed up for our Thursday’s Tip feature yet? If not, you’re missing out on some great information emailed to you every week! Don’t worry, we know you’re busy, so these tips are brief and easy to read — but yet much-needed information for any transportation professional! All you need to do is sign up for our e-newsletter and you’ll get this information emailed to you every Thursday of the month.
CONNECT WITH US Like us PARCEL FOLLOW @ PARCELmedia Join PARCEL Magazine Group 6
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TRANSPORTATION ABCS BY JIM HALLER
5 Ways You Can Mitigate the Impact of Dimensional Weight Pricing n early May, FedEx announced it was moving to dimensional weight pricing for all ground shipments in 2015. Signaling a possible shift in how carriers price shipments, the move left many shippers wondering if UPS would follow suit. And follow it did. On June 17, UPS announced that it too would price all ground shipments by dimensional weight starting December 29, 2014. This isn’t the first time dimensional weight pricing has stirred controversy among shippers. In 2010, FedEx and UPS separately announced they would change the dimensional weight volumetric divisor from 194 to 166 for domestic shipments, and 166 to 139 for international. Compounded by other rate and surcharge changes announced at the time, shippers saw delivery costs rise 20 to 30% for lowweight, high-bulk shipments. Fast forward four years (and a cumulative 27.5% jump in general rates for FedEx and UPS Ground delivery) and shippers are again facing an alarming cost increase — one they will have to absorb, or pass on to their own customers. While shippers are used to paying dimensional weight pricing for lightweight packages sized greater than three cubic feet, they are not used to this pricing model for shipments less than three cubic feet. For these packages, the price increase could be 30% or more. In other words, add these cost increases together and the cost to ship some low weight, high bulk packages will be 75 to 80% more in 2015 compared to 2011. These changes come at a precarious time for shippers, especially those in indus-
tries like retail where margin is razor thin and consumers are accustomed to lowcost or free shipping. Shippers that plan to use FedEx or UPS ground services in 2015 can — and should — take immediate action to negate or minimize the impact of dimensional weight pricing changes. These actions include:
Quantify the impact. Analyze the shortand long-term impact of changes to dimensional weight pricing and define how these changes will impact shipping costs in 2015. Don’t forget to factor in average annual increases to general rate, surcharge and accessorial costs to get a realistic view of shipping expenses in the year ahead. Explore packaging alternatives. When UPS and FedEx announced dimensional weight changes in the fall of 2010, they gave shippers little time to prepare their supply chains before the changes took effect in early 2011. Fortunately, shippers have more runway before the current changes take effect to explore and implement packaging alternatives that can minimize the cost increase. Both major carriers are even providing free package design testing services and resources to assist customers in this endeavor. Quantify carrier cost-to-serve. Shippers often fail to determine specific areas of their unique shipping profile where UPS or FedEx are getting economies of scale, pick-up/delivery density and other factors that reduce the carriers’ cost to serve the shipper. This analysis often identifies opportunities to optimize carrier relationships and reduce costs.
Evaluate hybrid alternatives. There are some good hybrid service offerings that can be used to ship impacted packages. Examples include FedEx SmartPost, UPS SurePost and DHL GlobalMail.
Go regional. Mid-year price increases are just one reason that more shippers are shifting volume to regional carriers. In order to compete with the likes of UPS and FedEx, some regional carriers are forming “super regional” networks that provide comparable service levels at 20 to 40% less cost. A final word — the carrier landscape is changing faster than many realize. Some changes present cost risks, while others present savings opportunities. Discerning risk from reward requires shippers to have a granular view of carrier cost-to-serve in the current pricing environment, and the alternatives available. This approach has led mega-shippers like Amazon.com and Walmart to rethink their entire shipping experience, whether its same day shipping or assembling their own fleet. These radical changes may not be a fit for every shipper, but the mindset of challenging the status quo is.
JIM HALLER is Program Director of Transportation Services for NPI, a transportation spend management advisory firm (www.npifinancial.com). A 33-year veteran of the transportation industry, and 17-year veteran of UPS, Jim helps companies optimize their carrier relationships and agreements to reduce shipping costs. Contact him directly at jhaller@npifinancial.com.
JULY-AUGUST 2014 | www.PARCELindustry.com
7
GOING GLOBAL BY DOUG CALDWELL
Canada Shipping Options Can Deliver Big Savings f you are a US shipper, you probably have at least some shipments to Canada, and you already know that those Canadian shipments can be a lot more expensive than your US domestic shipments. Here are some options that can help to reduce the costs to ship to Canada. OPTION 1: INTERNATIONAL GROUND TO CANADA Both UPS and FedEx offer International Ground to Canada, from any location in the US. Canadian zones are based on overall distance from origin to destination and are much more complicated than the USPS zone system utilized by FedEx and UPS. Routine customs clearance is included in the ground shipping charge, but only if the value for duty is $200 or less. If duty or taxes are due, the carrier pays them at the time of clearance, and then will collect them from the receiver at the time of delivery. DHL Express offers international express service between the US and Canada. OPTION 2: PALLETIZE AND LINE HAUL If you have at least a pallet or more of shipments each week, there will be a number of cost benefits to using a consolidation. Most shippers will consolidate at least once a week, on a predetermined schedule. This is the process: You apply the Canadian domestic carrier’s label to each box prior to palletizing. UPS, Canada Post, FedEx, Purolator International and Canpar all offer this service. The carrier will arrange for pick up at your US location, clear the shipment into Canada, and drop the shipment into their closest 8
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Canadian hub. Your shipment will bear a Canadian return address, which is often the address of the carrier. Typically, you will be invoiced in USD, for the linehaul, clearance and taxes, and for the shipment charges. This service will add at least a couple of days to your overall transit times, depending on how often you consolidate each week but the shipment time should approximate ground service with at least a 10% reduction in shipment cost and one customs clearance fee of approximate $65 per consolidation. OPTION 3: DROP SHIP INTO A CANADIAN CARRIER AND PAY THE INTRA CANADA DOMESTIC RATE This option is the most complex, but it also can offer the greatest savings potential. In this scenario, you will consolidate in the US, then arrange for an LTL shipment into the carriers Canadian hub. Some large volume US shippers will “zone skip” into Canada, by line hauling into two or more Canadian hubs. With Option 3, you will be tendering the shipments as a domestic intra Canada shipment, it will be shorter zones and you will typically be invoiced in Canadian Dollars. There’s good news here, as the US Dollar goes a little further in Canada than it used to. As of this writing a US Dollar is worth $1.10 CAD. INTRA-CANADA CARRIER OPTIONS CANADA POST Canada Post is the second largest parcel carrier in Canada in terms of volume, and the only carrier in Canada that delivers to all 15.1 million Canadian addresses. Canada Post is also the only carrier that can deliver to the 1.8 million Canadian PO Box addresses. For those reasons, the other Canadian carriers will typically
hand off remote shipments and PO Boxes to Canada Post. Canada Post offers a full suite of domestic parcel offerings, including Priority (next day), XpressPost (2 days), Expedited Parcel (1-7 days) and Regular Parcel (2-9 days). Unlike the US Postal Service, Canada Post imposes a fuel surcharge on parcel shipments. Canada Post also offers volume discounts for Expedited and Xpresspost parcels, as well as discounts on fuel surcharges for high volume shippers. Canada Post will invoice larger volume shippers, typically with 14 day payment terms. Canada Post currently delivers Monday through Friday. CANPAR CANADA Canpar is a Toronto based parcel carrier established in 1976, and a part of the fast growing TransForce Canada Group, which includes parcel, LTL and FTL, and even operates in the US (they recently acquired US LTL carrier Vitran Express and Dallas based Dynamex). Canpar’s specialty is intra-Canada ground, however they also offer a full suite of domestic express and transborder services between Canada and the US. Canpar offers the following domestic services: Select 10 AM, Select Noon, and CanPar Ground. Canpar has over 62 hubs in Canada. FEDEX CANADA FedEx initiated a Canada domestic Express service in 1989, followed by a domestic ground offering in 2000. In 2009, FedEx expanded their SmartPost B2C offering to Canada, with “last mile” delivery by Canada Post. FedEx offers the following domestic services: FedEx Express First Overnight (10 AM delivery), FedEx Express Priority Overnight (next morning delivery), FedEx 2 Day
Express (two days by 5 PM) FedEx Economy Express (1-3 days by 5 PM), FedEx Ground and FedEx Ground Multiweight (1-7 business days). FedEx Canada Multiweight requires only 40 lbs in Canada, vs. 200 lbs in the US. FedEx operates over 60 stations in Canada.
which offers a letter/envelope rate for ground shipments. Purolator offers the following domestic services: Express 9 AM; Express 10:30 AM; Express (end of day delivery); Express Evening (delivery between 5:30 & 9 PM); Ground 9 AM; Ground 10:30 AM; Ground (end of day);
Bottom line — a comprehensive review of your north of the border shipments can yield big savings dividends. PUROLATOR Purolator, established in 1960, is the largest parcel carrier in Canada, and is 91% owned by Canada Post Corporation. Purolator offers a full suite of domestic and ground services, as well as transborder services between the US and Canada. Purolator is the only Canadian carrier
Ground Evening (delivery between 5:30 & 9 PM). Trivia: Purolator Courier was owned by the US based Purolator oil filter company until 1987, hence the name.
io, and recently expanded operations into the four Atlantic provinces. UPS offers the following domestic services in Canada: Express Early AM (8 AM Metro/8:30 AM to others); Express (next day 10:30 AM); Express Saver (next day 12 noon); Expedited (2 business days); Standard (ground delivery by end of day). SUMMARY: There are many options to choose from for shipments to Canada. Bottom line-a comprehensive review of your north of the border shipments can yield big savings dividends.
DOUG CALDWELL is VP EMEA & International AFMS Global Logistics Management Group. Contact Doug at doug.caldwell@afms.com, or at 1.800.246.3521.
UPS CANADA UPS started Canada domestic operations in 1975. UPS is headquartered in Ontar-
JULY-AUGUST 2014 | www.PARCELindustry.com
9
OPERATIONAL EFFICIENCIES BY SUSAN RIDER
Pleading the Investment Case to Executives n today’s world, every distribution center is being asked to do more: Get more throughput, more accuracy, more productivity, more volumes, and more space. How? Many times this request comes as a plea without any capital investment. Getting more with fewer people is the norm, but how do you do it? Many times it requires an investment in material handling equipment, technology or new layout. None of this comes free. The distribution center manager is then presented the challenge of presenting the case for investment to the executives that will approve such an investment. Unfortunately, this usually takes a skill set that some distribution managers lack: salesmanship. How do you present your case well the first time so the money is allocated to the project? 1. Know the audience and what is important to them Remember who you are presenting to so that you don’t get caught off guard. If you are presenting to the CFO, this person will be all about the return on investment and numbers. A CFO is going to want to see strong justification and return. Because some CFOs don’t understand supply chain lingo, make sure you present in a way that he/she can understand the information. For example, if you are presenting a PTL system for order picking, it may be beneficial to give a brief statement of the benefits and briefly how it works before proceeding with the project details. If the CFO says, “We are doing just fine the way we are, so why invest?” you will need a strong argument. A good argument example is, if our 10
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volumes increase by 10% we are out of room and without increasing headcount by 20% we will not be able to ship same day. Focus on dollars and percentages. 2. Deal in facts and proof points Executives want to hear about valid claims on return. Saying that the system will give between 10-40% gain probably will not be accepted. They will want the numbers to be more concrete. There may be similar case studies that would prove the return. Ask the vendor to partner with you on the information, but ensure the information is accurate. When presenting the AS IS and the TO BE case to executives, stay with the factual information that you know. 3. Stay high level but have the detail if needed Most executives do not want to hear about all the implementation details or the installation details. They want to know the high level scope and return on investment, whether monetary or customer service oriented. Stay out of the weeds, which could send your presentation off topic. Make sure you have the details available should questions be asked, but don’t focus the presentation on the details. 4. Introduce the problem and opportunities Before you jump right into the project, introduce the problem. For example, “We are running out of space and if there is not a redesign within the next 12 months we won’t be able to ship the volumes projected for this year.” Ears will definitely perk up with that introduction. Once you present the problem then you can focus on explaining the solution or opportunity for improvement. 5. Explain the hazard or risk if investment is not made
Sometimes investments are made not to be able to keep up with orders today or to reduce cost today but to be able to keep up with projected volumes or budget. A good example of risk or hazard to the company’s bottom line is in the pharmaceutical and food verticals. If the distribution center doesn’t have a system that can keep up with lot codes a total recall of defective product is not possible. Therefore, all orders must be recalled. But if the system was able to narrow it down to a lot, then only the lot would need to be recalled and the system could tell you exactly where that lot shipped. 6. Don’t forget the intangibles Many times in presenting a case of return on investment the intangibles are forgotten. Some of these like better customer service, better picking accuracy, more inventory availability to sell could be a big return but how do you put numbers to it? Use percentages! 7. Summarize the request and need At the end, give a summarization of the total presentation and summarize with an investment strategy. If the project is a $500,000 project, with 20% of this the first six months, 30% next six months and 50% year two, spread the cost out on a spreadsheet. Many people do not get the project approved because they do not show the cash outlay when it happens. They just say it’s a $500,000 project instead of, “The cost of the project over two years will be x.” This will also allow you to bring in the second year return, which will also give a better return.
SUSAN RIDER, Supply Chain Consultant, Executive/ Life Coach can be reached at susanrider@msn.com.
SHIP RIGHT BY JIM HENDRICKSON
Parcel Size Matters in 2015: How to Navigate Changes in Shipping uring the last decade, telecommunication companies had to invest billions of dollars in their network capacity to handle the onslaught of “free” broadband data over networks that were tuned for voice calls and texts. The result of that investment was a change in their business model from unlimited data to pay-based data plans. As consumer commodity purchasing over the web has taken hold, traditional parcel carriers are finding their networks similarly strained by the need for additional capacity to handle bulk. In addition, the rise of ecommerce in general means more small retailers, including individual sellers, are shipping items of all kinds. The use of standard sized boxes means that items are often packaged in boxes that are larger than needed. As a result, we recently saw that some major carriers have taken a page from the freight transportation playbook and will base charges not only on weight, but on dimension by January 2015. It’s a logical move on the carriers’ part and is likely to be followed by other parcel-based carriers in time. So how will these changes impact retailers and their customers next year? Dimensional pricing is based on a price for a specific weight based on box size. If you have less weight in the box for the size, you pay a surcharge. On a box that is 12x12x12, any weight below 11 pounds adds a charge. A large snow globe, 6 ½ inches high that is fragile, and therefore has packing that fits into a 12x12x12
box weighing about 5 pounds, will cost an additional $1.13 to $3.42 depending on the zone; an increase of 12 to 31%. The Intelligent Mail Package barcode (IMpb) may also play an even more important role in shipping operations next year as parcel volumes grow for some retailers. This next generation tracking barcode for Parcels and Extra Services from the U.S. Postal Service will offer the same visibility to parcels as their private counterparts — and many times — with more competitive rates. In addition, the IMpb can help retailers reduce costs, gain greater visibility and retain control over their entire parcel spend. Full rollout of IMpb quite possibly might represent a sea of change in the domestic parcel shipping industry, as the USPS now becomes a stronger option for parcel shipping. Using an IMpb label will allow shippers to get the best rates for packages and avoid extra fees, and provide automatic parcel insurance ($50 for Retail and Commercial Base Pricing; $100 for Commercial Plus Pricing for Priority Mail). An IMpb-compliant label also provides end-to-end tracking and package visibility, much like private express carriers. If you think of a package as an extension of a company’s customer service experience, the value of this new service becomes clear. IMpb provides transparency to both shippers and receivers so packages can be granularly tracked, thereby giving them greater control over the overall experience. Flexibility Will Be Key in 2015 One way to achieve flexibility is by simplifying shipping operations via a single, automated multi-carrier system. These powerful, yet scalable web-based solu-
tions can enable retailers to compare and select the most cost-effective shipment method that meets delivery requirements for every parcel shipment. They can also help optimize, integrate and automate all shipping processes while providing the highest degree of real-time visibility and control of a retailer’s operation. Another factor to consider — shipping matters when it comes to consumers’ buying choices. In fact, there’s now a blurred line between the decision on a shipping method and the selection of a product when it comes to the overall buying decision and customer experience. For instance, in a recent survey we conducted, nearly half of Americans (47%) are paying more attention to shipping as part of the overall shopping experience now compared to three years ago. Among those surveyed, half (49%) have also at some time abandoned their shopping cart, whether online, in store, or over the phone, due to shipping costs. The netnet — providing a variety of shipping options can help retailers make a difference in attracting and keeping shoppers. By investing in a multi-carrier solution now, retailers can prepare for both the busy holiday shopping season and parcel shipping changes in 2015. Flexibility to offer and choose the best options for shipping — balancing service times and costs based on actual needs — for each and every parcel can not only help deliver a satisfying customer experience for today’s consumer, it can also have a big impact on savings in 2015.
JIM HENDRICKSON is Vice President and General Manager, Logistic Solutions, Pitney Bowes Inc.
JULY-AUGUST 2014 | www.PARCELindustry.com
11
SUPPLY CHAIN PIVOT BY ROB SHIRLEY
Disruption Is a Game Changer oogle X is Google’s R&D department that is heavily veiled and concentrating on “moonshots,” which it depicts as something that is totally innovative; potentially an enormous new revenue stream to balance its mega profit producing search business; and something that will be of benefit to hundreds of millions or, preferably, billions of people. Google X employs 250 people and researches the possibilities of numerous projects for the likelihood of success. Its head of development said it would prefer something that has a hint of science fiction to it. It looked at teleportation (“Beam me up, Scotty!”) and decided although it is cool beyond words, but it was not yet scientifically possible. Three of its more promising projects are: 1. Google Chauffer, which are driverless vehicles. One has driven over 100 miles on the Pacific Coast Highway, which is particularly curvy, with no driver. I saw one last November on Google’s Mountain View, CA headquarter campus; it was a Lexus RX Hybrid. 2. Google Glass, which is essentially a computer worn like a pair of glasses that may also eliminate those rectangular smart phones we are all awkwardly stuffing in our pockets 3. Project Loon is a network of hot air balloons that will provide Internet services to the two thirds of humanity who do not have web access now Fast Company magazine recently published an article written by the first reporter ever given personal access to Google X, and he asked what else Google might be working on that looks promis12
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ing. He received an evasive answer, but it was focused on transportation. Some of the greatest successes coming from Silicon Valley, Austin and now Silicon Beach (between Santa Monica and Venice, CA) have completely disrupted tried and true businesses. Books, music, phones, tablets and now television have all astonished us. I just bought an Amazon Fire for $99 and it is a fantastic way to see free media without commercials on my TV. The world’s logistics networks, not including the movement of people, are now estimated to exceed $3 trillion a year, about 1/5th of the total GDP for the USA. So there is certainly enough money involved to qualify as a moonshot. When considering what Google X may be contemplating, there are a couple of announced or test situations that may provide clues: 1. Amazon is exploring the use of drones for delivery and their CEO, Jeff Bezos said they were getting close to that reality in a presentation April 16, 2014 2. Google Shopping Express (GSX) is offering same-day delivery at zero cost to the shipper or receiver in the San Francisco/Silicon Valley Bay Area. They have bought and are operating dozens of Toyota Prius vehicles which are now liveried with the GSX logo 3. Google bought Skybox and according to the Wall Street Journal, they have formed a new division to launch 180 satellites at a cost of over $1b. The new division is called O3B Networks and directly refers to the 3 billion people on the planet that do not currently have internet access. Could Google be on the verge of disrupting the transportation industry? Before beginning to answer, take a new look at Google Earth that now has 3D, canyons, under seas and far flung galaxies
in addition to your home town and mine. A little mind trick I sometimes use is called reversing the telescope to look through the proverbial big end of the scope in order to identify possibilities. In this case, I came up with the biggest problems that transportation has not yet overcome: 1. Transportation is simultaneously labor and capital intensive. Reducing either one significantly would be a huge win. Driverless vehicles in mass could certainly reduce labor. Eliminating one of these will open the market to many more players. 2. Transportation is one of the biggest users of fuel. Solving or reducing it considerably would also be a huge win for the planet. Google X’s Project Loon involving large hot air balloons could be a smoke screen to cover some kind of zeppelin that would move freight at a significantly lower fuel rate. If they were 300 yards long, they would cost much lower labor and capital expenditures while burning less fuel (zeppelins do not have to follow roads). As bizarre as it may seem, it would certainly fulfill the mantra of Google X ambitions. If hundreds of our biggest corporate entities were thinking and investing longer term, we could quit worrying about any other countries’ designs on how to separate us from our money and freedom. That would be the kind of disruption we could all herald as game changing progress. This is all obviously conjecture based on a few facts, but the world is rapidly changing and things like this are on the benefit side. At the very least, if the satellites involve three billion more people, the market grows exponentially.
ROB SHIRLEY is CEO of ExpresShip, a strategic consultancy in the global supply chain. Contact him at rsxpship@gmail.com or www.xpship.com.
APPLICATION ARTICLE
REVOLUTIONIZING HI-VALUE SHIPPING WITH WELLS FARGO INSURANCE & THE USPS In 1861, Wells Fargo was the first company to operate the Pony Express — protecting high-value mail shipments to the California Coast. Now software innovator TransGuardian, using Wells Fargo Insurance and insuring USPS parcels, continues the tradition by giving sellers of high-value merchandise a way to ship more, spend less, and grow their business, even in a challenging economy. “We’re revolutionizing insured shipping,” says TransGuardian’s CEO, Jim Moseley. “Our insurance policy, brokered by Wells Fargo Insurance and underwritten at Lloyds, is helping us securely streamline logistics in the jewelry trade. Wells Fargo Insurance is the largest provider ever to enter this industry. Their trusted brand, efficiency, and high integrity have delivered tangible value to our clients.” Of the $29 billion of diamond jewelry sold annually in America, 90% of it flows through what Moseley calls “Glitter Street” — New York’s Diamond District at West 47th Street and Fifth Avenue. The N.Y. Diamond Dealers Club (DDC) has been at the heart of the District for 83 years. “This is the NY Stock Exchange for diamonds,” says Basant Johari, DDC Vice President. “Deals worth thousands and even millions close on a handshake. To move our diamonds safely to the rest of America, I’m pleased that TransGuardian has an office inside the DDC.” While UPS and FedEx remain important carriers for high-value shippers, they have raised prices 28% in the last 6 years with another 5% announced for 2015. With online retail’s “free shipping” model becoming more prevalent in every industry, containing logistics costs is a challenge. “One might think that diamond profits are so large that shipping costs don’t matter,” said Ronnie VanderLinden, President of the Diamond Manufacturers & Importers Association of America and a TransGuardian client. “Actually, higher-priced items have narrower margins due to the competitive nature of our business; so, every penny counts.” While TransGuardian covers all major carriers, insuring the USPS brings diamond dealers a new competitive edge. For example, a diamond shipped in a Priority Mail Express Envelope travels overnight on a FedEx jet, but costs 20-50% less than overnight by commercial carrier. A Priority Mail Small Flat Rate Box costs 50% less than a commercial ground carrier and travels 1-3 days faster.
In 1990, the jewelry industry shipped 90% of its parcels by the USPS. By 2010, they moved 98% to FedEx and UPS. Now, with TransGuardian, USPS services and savings are a perfect match for 40% the industry’s parcels. Security is key. Not only does TransGuardian’s proprietary software mitigate risk automatically, the USPS is the only carrier that has its own Federal law enforcement agency — the US Postal Inspection Service (USPIS), founded by Benjamin Franklin in 1775. If the USPS has a security issue, they don’t have to call the police — they are the police. Any crime involving US mail is a felony. “We maintain close ties to the USPIS,” says Moseley. “As a postal customer, we consider their protection of our clients’ parcels a priceless benefit.” This combination has proven so successful over nine years that TransGuardian can provide coverage of up to $150,000 per parcel at 30-50% savings compared to other 3PL insurance providers. The USPS is making huge advances in other areas, too, further benefitting high-value shippers. “This is not your grandfather’s Post Office,” says Madlene Moseley, TransGuardian’s COO. “The USPS has a wide range of services — flat-rate, light-weight, overnight, 2-day and more. They’ve invested millions in new state-of-the-art technology for enhanced accountability. The Postmaster General, Pat Donahoe, told us at the Pasadena Rose Bowl on June 5 that the USPS is committed to being the fastest, most competitive, and most trackable parcel service in the world. Our clients’ experience is proving him right.” One of the world’s top luxury watch brands ships nearly all of its product via USPS Registered Mail under TransGuardian’s policy. They have achieved six figures of annual savings and maintain outstanding customer satisfaction. And, to encourage shippers to shift shipments to the USPS, TransGuardian can provide special discounts on US postage. Wells Fargo’s Pony Express was at the leading edge of high-value shipping in 1861. Now, TransGuardian, with Wells Fargo Insurance, leads again.
www.transguardian.com jim@transguardian.com 877.570.7447
SPEND PERSPECTIVES BY JOHN HABER
Enter the Peak Season with a Plan ccurately forecasting and maintaining adequate inventory levels is an extremely challenging priority for businesses. Any hint of a disruption within the supply chain can have a negative impact, affecting one’s financial outlook, brand identity, and customer satisfaction. Earlier this year, in my article, “Could the Peak Season Debacle Have Been Avoided?” I discussed the need for businesses to be prepared for any potential risks that may arise and the steps necessary to take to manage customer expectations, prevent delays in delivery and minimize unexpected costs. As we enter the 2014 peak retail season, have shippers and carriers learned from last year’s obstacles? The on-going contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association have magnified the importance of dynamic and strategic planning. US West Coast ports play a critical role in global trade, handling an estimated 44% of U.S. import and export container cargo traffic. While promises of no work stoppages have been made, both sides appear to be holding firm on their core objectives. As of late July the two sides had not reached a new agreement, however there have been minimal disruptions. Especially when compared to contentious contract negotiations in 2002 and 2008. The great news is that many businesses have been prepared and imported goods early. West coast container shipments at the Ports of Los Angeles and Long 14
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Beach spiked in April and to a lesser degree in May. Shipper contingency plans have shifted volumes to other ports, especially East Coast U.S. ports such as Charleston, Savannah and Northwestern ports which extend beyond U.S boundaries. In May 2014, Canada’s Port Metro Vancouver noted a 14.5% year-over-year increase in containers after a 2.7% rise in April. Global economic forecasts have not eased the pressure as estimates from the National Retail Federation and Hackett Associates suggest imports into the U.S. ports may hit a five-year high in July 2014 of 1.5 million containers, a 4.3% increase from last year. How prepared are businesses for the rest of this year with the upcoming backto-school and the holiday seasons? There are certainly plenty of questions that need to be addressed by shippers as they determine how best to maintain consistent inventory levels and prepare for potential changes not only at the ports but across their entire networks. While no solution is fool-proof, having a flexible and adaptable supply chain plan strategy that eases complex decisions during critical times is essential. Here are five important guidelines shippers should be following as they enter peak season: 1. Don’t put all of your eggs in one basket • Shippers need to have backup carriers in place that are receiving volumes — even if it’s only 5% to 10% of your total volume 2. Open lines of communication • You need to understand your providers’ peak operating plans and they need to know yours — consider hav-
ing them agree to specific service levels during peak as part of your contracting process 3. Closely monitor carrier service levels • Shippers should always measure their provider service levels but especially during peak times — it’s critical to be pro-active rather than re-active 4. Understand the calendar • Last year many shippers and carriers did not properly plan for a shortened time frame between Thanksgiving and Christmas — 2014 is tight as well with exactly four weeks between holidays 5. Set reasonable expectations • While carrier service levels were a major problem last year many of the shipping breakdowns were self-inflicted — make sure your operational plans are aligned to meet the commitments you are making to your customers Addressing these five areas won’t solve all of the potential issues however they will set a firm foundation and help ensure a successful peak season!
JOHN HABER is an expert in shipping, freight and transportation spend management. In his current role he provides the vision, and the execution knowhow, that helps companies save 10% to 20% or more in logistics spend. Contact him at jhaber@ spendmanagementexperts.com.
CONTACT INFO: COMPANY: Agile Network, LLC
PHONE:
866.686.2445
WEBSITE:
www.agile-network.com
B
EMAIL: ig Brands Count on Agile Network for Global Parcel Shipping Software The world’s largest retail and consumer product companies rely on AgileShip to deliver more features, carrier selections, certified business application integrations, multi-origin shipping capabilities, and high volume performance required for enterprise fulfillment.
sales@agile-network.com
Full-Featured, Multi-Carrier, Multi-Location Enterprise Shipping & TMS Platform AgileShip handles the entire supply chain execution process — from order-level rating and routing, through pack verification, weighing, consolidation, manifesting, and labeling — in ‘black box’, ‘attended station’, and ‘print-and-apply’ configurations. The business rules-based solution includes a complete management dashboard and fully integrated invoice reconciliation — features which helped earn Agile Network exclusive status as a FedEx Diamond Compatible Solution Provider. Broadest Selection of Carriers & Services AgileShip provides 100% compatible support for all FedEx, UPS, DHL, and US Post Office delivery services. The solution also supports certified rating, routing, and execution through hundreds of regional freight and parcel carriers, including: TNT, OnTrac, Eastern Connection, CanPar, Purolator, Royal Mail, Deutsche Post, La Poste, DPD and more. Greater selection means more ability to meet the customer need with a moneysaving option. Certified Integration with Every Major ERP and WMS AgileShip provides unprecedented ability to integrate with leading supply chain applications through multiple touch points. This includes support for Oracle EBS and OTM, SAP, Microsoft Dynamics, Epicor, JDA, Manhattan Associates, and HighJump, among others. The solution also offers plug-and-play integration with leading material handling and robotic warehouse solutions. OmniChannel Capability & Enterprise Grade Performance AgileShip supports deployment throughout the supply chain; delivering integrated shipping capabilities to suppliers, distribution centers, and retail locations. The solution also provides benchmarked performance required to rate, route, and execute more than 60,000 shipments per hour. Learn how Agile Network can optimize your own operation with a free 360º Assessment. 16
JULY-AUGUST 2014 | www.PARCELindustry.com
COMPANIES
2014 2013
CONTACT INFO: COMPANY: CT Logistics
PHONE:
216.267.2000, ext. 2190
WEBSITE: ctlogistics.com
EMAIL: PARCEL AUDITS Reduce parcel costs and save money with the industry’s most advanced and comprehensive package audit program. CTrak’s proven benefits include a totally automated, Global audit system that delivers maximized savings. Customized Accounting Services: CTrak provides automation for general ledger account code allocations for every shipment and visibility of details at the shipment level. Complete automation ensures all pricing conditions & costs are rated including: optional bundled pricing rates, for all countries, for all currencies, including hundred weight pricing and third-party shipments. CT’s Cognos Business Intelligent Reports, Graphs and Dashboards produce effective and efficient management insight into your total freight spend.
sales@ctlogistics.com
CONFIDENCE 91 years of experience allows us to create a full range of freight management solutions — all tailored to meet your company’s unique requirements. CT Logistics is one of the preeminent providers of freight payment services and transportation management solutions. CT will work with you by creating customized solutions so that you can focus on your firm/s core competencies — ensuring a quality, efficient, effective and robust supply chain management system for your global needs. TRUST Firms of all sizes, including Fortune 100 corporations across the country and around the globe, rely on CT Logistics to assist them in making solid, informed decisions regarding their freight audit, payment and business intelligence needs. Our team of professionals has been instrumental in assisting our clients in leveraging expertise, technology and best-in-class processes to maximize return on the client’s investment. SOC II and ISO 9001:2008 certified. LEADERSHIP CT Logistics is a leader in the freight payment and transportation management services industry. With FreitRater — the industry’s first choice for freight management and TMS software — and our customized solutions for your global freight payment systems, our AuditPay and TranSaver solutions will exceed your expectations. CT creates customized solutions allowing your firm to focus and maintain a competitive advantage. CONFIDENCE, TRUST AND LEADERSHIP ... TRADITIONS SINCE 1923 All of these attributes are woven into our corporate philosophy, the foundation and tradition that our clients have relied on for 91 years. But just as important, is the future that the CT Logistics team will help you build. Our services and software are evolving to provide you with the latest, leading-edge applications and systems that will enable you to better manage and reduce supply chain costs while adding more visibility and control to your organization, positively impacting your bottom line; that’s our commitment to you.
COMPANIES
2014 2013
CONTACT INFO: COMPANY: Datatrac
PHONE:
800.827.2677
WEBSITE:
www.datatrac.com
EMAIL: Developing More than Software For more than three decades, Datatrac has been providing carriers, shippers and logistics companies with technology to support mission-critical business systems and processes. Several customer-centric tenants guide our technology solutions. 1. Keep up to date with the most advanced technology and intuitive design elements 2. Leverage the specialized expertise of our staff for professional services 3. Engage in collaborative efforts with our strategic partners and customers 4. Provide optimal value at the customer’s desired level of investment Datatrac continues to empower carriers and shippers to take control of the supply chain.
s81es@datatrac.com
New Innovative Solutions from Datatrac Ascend is more than a software solution, it’s a new platform that brings speed, agility and functionality to any logistics enterprise, large or small. Ascend has been configured to be a modular system or to interface with a full suite of operational products and proprietary systems. No other solution provides the depth of scalability, integration or functionality in managing logistics operations. Ranger provides the essence of mobility solutions in a robust application capable of managing the most challenging customized solutions. Visibility is the key functionality of Ranger and the feature rich design provides order detail status at every critical milestone, to include full signature capture and GPS tracking capability for today’s demanding real-time visibility requirements. Ranger works on a variety of mobile devices and operating systems and integrates with all providers, regardless of platform. IPD Mobile is designed to connect delivery companies with independent professional drivers who are available for immediate dispatch. Using IPD Mobile’s dispatching application, delivery companies gain immediate access to an outside pool of qualified drivers allowing their business to rapidly expand to meet daily demand. Independent Contractors gain access to additional immediate no-hassle work opportunities through IPD Mobile’s mobile application. Accounting requirements are managed through IPD Mobile’s settlement process. IPD Mobile is ready to help grow your business! Datatrac Provides Consulting Services for Logistics Businesses Our customers recognize and benefit from the consultative approach we take with our selling processes. We assist our customers in understanding the cost, risk, strategic importance and return on investments in the IT landscape of their organizations. We’ll assist management in architecting IT solutions that keep the business agile, responsive and strategic in today’s rapidly evolving environment.
COMPANIES
2014 2013
CONTACT INFO: COMPANY: EAM-Mosca Corporation
PHONE:
800.456.3420
WEBSITE:
www.eammosca.com
EMAIL: Mosca Equipment Meeting Needs of Parcel Industry EAM-Mosca, a high performance strapping systems provider is building an impressive base in the parcel and distribution markets. The company’s product range spans solutions from operator cycled to fully automatic systems that strap cartons of varying sizes and styles at high speed with minimal or no operator intervention.
info@eammosca.com
High Performance and Productivity Goals EAM-Mosca, based in Northeastern Pennsylvania, has placed over 20,000 machines in the Americas in industries as diverse as mailing, logistics, corrugated, protein and more. German parent company Mosca GmbH has been providing strapping solutions since 1966. The company’s stated goal is to serve customers reliably for millions of cycles over many years by combining innovative equipment, high quality strapping materials, and support programs to help performance driven customers meet productivity goals. Significant Cost Savings Possible The high cycle efficiency of Mosca systems along with more secure seals often result in the ability to reduce strap sizes — not only cutting costs but positively contributing to sustainability. The high reliability of Mosca systems also means less costly downtime and improved deliverability. Strapping to unitize multiple cartons shipped to the same address can quickly contribute substantial cost savings. Range of System Sizes and Automation Options In addition to the entry-level Fusion walk-up model, EAM-Mosca offers the ROMP-6 Evolution operator cycled, walk-up strapper for hand-pick and off-line applications; and its inline, automated belt or roller conveyor top models for high-speed automated operations. Its compact footprint, high reliability and Mosca’s heat seal or proprietary ultrasonic, tamper-evident seal make it a good fit for many applications. The Evolution offers a range of arch sizes, and can apply PP strapping in widths of 5mm to 12mm at speeds of up to 52 cycles per minute. The ROMP-6 Evolution is equipped with either a thermostatically controlled heat seal or Mosca’s patented Sonixs technology, a smokeless ultrasonic welding technique. The Evolution design includes a compact cabinet, side or front coil loading for convenient changeover, push-button strap threading, and a fully enclosed strap feed track for exceptionally reliable feeding. New, TR-6 models with sophisticated control options feature the innovative Standard-6 precision strap path and direct drive sealer with sealed bearing construction. The control program can be tailored to meet individual needs and accessories are available to make it the best solution for high-volume, performance intensive applications.
COMPANIES
2014 2013
CONTACT INFO: COMPANY:
Eastern Connection
PHONE:
800.877.4745
WEBSITE:
www.easternconnection.com
EMAIL:
F
or more than three decades, Eastern Connection has been driven to deliver the most reliable, flexible, and cost-effective shipping and logistics solutions in the industry. We are one of the longest-operating and highly respected carriers with original ownership. We are also one of the largest regional, small-package overnight carriers on the East Coast, covering 6,800 zip codes from Maine to Virginia and extending west into the “Rust Belt.” Based in Cumberland, RI, we have 16 facilities, and we are open 24/7, 365 days a year. Services • Ground • Priority Overnight • Same-Day Rapid Response • Logistics & Warehousing • Expedited Mail • Medical Logistics Accolades • Recognized as “Entrepreneur of the Year” by Inc. Magazine • Recognized for company-wide “green” initiatives • Numerous customer service awards • Public service awards from American Heart Association • Widely published in WSJ, business, and trade journals • During the 2013 holiday season marked by e-commerce delivery snags by UPS and FedEx, Eastern Connection received national attention as a top regional alternative.
Advantages • Later pickups and earlier deliveries • Pricing that is significantly less than the nationals • Flexible, customized solutions • Industry-best efficiency performance rating of 98.6% • Only express parcel service in Northeast that provides next-day ground deliveries by end of day • Superior record for claims damage • Superior Safe-Driver “Modification Factor” • Best-in-class technology that matches or exceeds that of the nationals • Advanced technology systems include bar-coding and real-time scanning; online tracking, tracing, billing, and same-day POD management reports; automated sorting systems; shipping integration systems; and instant communication with drivers • Trademark personalized service, including “over the threshold”
We guarantee better prices and greater flexibility and reliability than the giants. Plus, we are a leader among the carriers in the “super regional” network, combining personalized customer service along with “big-company” sophistication that’s second to none. Contact us today for a free, no-obligation analysis of your shipping needs!
sales@easternconnection.com
COMPANIES
2014 2013
CONTACT INFO: COMPANY: Engineering Innovation Inc.
PHONE:
800.350.6450
WEBSITE:
www.eii-online.com
E
II’s parcel solutions include the revolutionary EZ-WorkDesk and EZ-Parcels systems which rapidly process parcels for induction and routing. EZ-WorkDesk provides quick parcel induction capabilities with the lowest initial investment, EZ-Parcels adds greater automation, speed and versatile routing with package diverter sections. Both parcel solutions products can capture data from the face of the package, capture weight and dimensions, and apply a shipping label.
EMAIL:
sales@eii-online.com
In line with EII’s commitment to provide the mailing industry with cost effective solutions for maximizing postage savings, these systems open up new savings/revenue opportunities for fulfillment, consolidators, returns package processing, mailers, and shippers. All equipment includes options for Wide Area Barcode Reader, UMove Move Update processes, processing International Mail, and processing Inbound Mail. EII combines more than 30 years of mailroom experience with over 20 years of postal automation design experience to develop solutions that work for mailers of all sizes. EII’s mission is to develop practical products that work in the real-world and to provide service after the sale that is second to none.
COMPANIES
2014 2013
CONTACT INFO: COMPANY: enVista
PHONE:
877.684.7700
WEBSITE:
www.envistacorp.com TM
Consistently deliver customer delight — optimize your transportation strategy with enVista.
EMAIL:
info@envistacorp.com
enVista is a leading supply chain consulting and IT services firm, delivering leading transportation spend management services that reduce cost and improve visibility for clients across the globe. enVista’s experienced team of transportation management professionals and former carrier pricing managers bring significant expertise reducing transportation spend and optimizing transportation operations. Services & Solutions: • Global Freight Audit & Payment • Proprietary myShipInfo transportation cost management solution offers multi-lingual, multi-currency, VAT considerations, and a robust, real-time rating engine to ensure carrier compliance for global shippers and 3PLs • Carrier Contract Analysis & Negotiation • Managed Operations • Transportation Consulting • Business Intelligence • Capacity Solutions • Leveraging strategic carrier networks and aggregated buying power for shippers Expertise: • Hundreds of clients across multiple industries • Robust methodology • Highly experienced team of transportation experts • Inc. 500I5000 fastest growing transportation & logistics company (four years) Client Testimonial: “enVista has provided significant value to Vera Bradley by identifying service failures and other invalid charges and by working with our carrier to retrieve the appropriate credits. In addition, enVista has given us visibility to cost savings opportunities and has helped us reduce our annual transportation spend by renegotiating our parcel contract.” ~ VP Operations, Vera Bradley Improve profitability. Reduce waste. Enhance customer experiences.
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COMPANIES
2014 2013
CONTACT INFO: COMPANY: LaserShip
PHONE:
800.527.3764
WEBSITE:
www.lasership.com
EMAIL: LaserShip is an industry-leading parcel carrier facilitating last mile delivery to Eastern U.S. markets for businesses that desire reduced transit times, greater flexibility, and the elimination of excess costs within their supply chain.
sales@lasership.com
Our expedited delivery solutions help time-critical businesses achieve the right service mix of same day, one day and extended day delivery for optimal customer flexibility and cost-effectiveness. We are strategically located to reach the high population areas of the east coast, with one day service hubs reaching into the Northeast, Mid-Atlantic, Southeast, and Florida. Without the time burdens of a rigid, “one size fits all” distribution system, LaserShip arranges pick-ups and deliveries based on customer need. As a collaborative partner for B2C and B2B, LaserShip offers solutions that give you the competitive edge in the marketplace: • Later pull times • No accessorial fees • Shortened transit times • Flexible delivery network • Saturday and Sunday delivery • One day footprint reaching large segments of East Coast population • Same day service in metro markets • Full visibility into the last mile of your supply chain for you and your customers • Central customer service LaserShip will help consumers get your products more quickly while lowering the cost of distribution for your business. Our consultants are available to help you design the solutions that best meet your supply chain objectives. Contact us today!
COMPANIES
2014 2013
CONTACT INFO: COMPANY: Melissa Data
PHONE:
800.635.4772
WEBSITE:
www.MelissaData.com
C
ommitment to quality contact data For nearly 30 years Melissa Data has provided companies data quality solutions for challenges faced in mailing operations. We specialize in affordable data quality tools to help you achieve the greatest level of contact accuracy for high response, low-cost direct mail and fulfillment applications. With ever-changing mailer requirements, we invest in the future of shipping and mailing services in U.S., Canada, and internationally with sophisticated solutions for address verification, change of address, geocoding and transliteration for a global world.
EMAIL:
sales@melissadata.com
CONTACT ZONE: An easy-to-use, powerful tool for enterprise and small businesses to get databases squared away with the least amount of technical expertise for maximum postal savings. It’s designed to improve marketing response rates and customer communication with comprehensive data quality solutions that cleanses addresses, dedupes records, presorts mail, and updates address information and moves (NCOALink). In addition, it parses, validates, and standardizes global contact data, geocodes international postal addresses, and presorts U.S. mailings for maximum postage discounts. Various components available feature: generating CASS Form 3553 for postal discounts, and presort First-Class and Standard Mail. Contact Zone allows output to any source: IBM D82 +,Microsoft SQL Server, SAP, Oracle, dBase, Excel and many more. GLOBAL ADDRESS VERIFICATION: A solution for worldwide address capture, clean, and complete to meet the challenge of mail to international customers. The cloud-based tool corrects address data for over 240 countries and territories, provides international geocoding for 40+ countries, standardizes addresses to a country’s local format, adds missing components such as postal codes, regions, and more. Other features: transliterates native character sets and optimizes online transactions to verify correct postal addresses for international billing and delivery to increase mailing accuracy. SMARTMOVER MOVE-UPDATE SERVICES: Hassle-free services include USPS NCOALink 48-month processing, Canada Post NCOA 72-month processing, plus PCOA (proprietary) and MCOA (multisource) change-of-address processing. Available for batch, real time, fully-automated, and custom processing. MAILING LISTS: Target the businesses you want. Get online counts, purchase and download mailing lists in minutes, or let a list specialist help you select the best for your business. We have APIs available that can integrate into custom applications to get counts and pull lists for internal or retail use. 24
JULY-AUGUST 2014 | www.PARCELindustry.com
COMPANIES
2014 2013
CONTACT INFO: COMPANY: Neopost USA
PHONE:
800.636.7678
WEBSITE:
www.neopostusa.com
EMAIL: You Have to Know Where to Look for Shipping Savings
neomkt@neopost.com
There is gold in your shipping organization and Neopost USA can help you mine it. You may have a good strategy to control your shipping costs. However, there is more value on the table that you may have overlooked. Business leaders should consider shipments generated from their business operations vs. their distribution network as areas to con trol cost. The everescalating, but controllable, cost of shipping is an obvious and often overlooked costsaving opportunity. Neopost USA has the solution: an enterprisewide desktop shipping application that can be utilized by homeoffice and field employees to help you control excessive shipping expenses. Sound Familiar? Without uniform shipping processes, your employees can easily overspend on shipping, be seduced by air bills that are attractive on the outside, subject you to un necessary address correction fees or make internal accounting mistakes. If you say, “Yeah, that’s us” to any one of these issues, you are spending more than you should for shipping. Neopost USA Has The Solutions to Your Problems. Neopost USA can help you implement a few, easytoadopt functions into your operation that will control your shipping spend: • • • • •
Utilize multiple carriers and services. Develop an inbound shipping plan for packages to be tracked. Develop easytofollow but disciplined business shipping rules. Incorporate a shipping system that automates your process. Increase the visibility and control of shippers within your organization.
Introducing Neopost USA’s desktop shipping strategy into your organization could result in potential savings of 15 to 30 percent. If you control the means and methods your employ ees use to make shipping decisions, you will strike gold in the conveniently exchangeable form of found money. And you will find that extra cash simply by tending to your shipping procedures. Implementing an enterprisewide shipping application brings an intrinsic set of control, compliance, costmanagement and accounting benefits. That’s in addition to the smart choices you can make with carrier rate and service comparisons and the control you can have when monitoring misuse or unauthorized shipping activities. The Peace of Mind You Deserve. Neopost USA, a leader in multicarrier shipping software, has the solutions you can use right away to reverse costly shipping practices and realize the financial benefits of a controlled process. The gold is there. You just have to know where to look.
COMPANIES
2014 2013
CONTACT INFO: COMPANY: NPI
PHONE:
888.821.SORT
WEBSITE:
www.NPISorters.com
N
EMAIL: PI is proud to introduce Xstream, our high-speed, automated flats mail and parcel sorting solution. With throughputs up to 30,000 articles per hour, a modular design that facilitates future expansion, and an ergonomic footprint, Xstream makes flat and parcel automation faster and more efficient.
michelle@npisorters.com
Xstream processes both Incoming and Outgoing articles with ease, including bagged, polywrapped, and otherwise non-machinable flats with ease. Xstream sorts a wide variety of articles weighting up to 70 lbs having dimensions up to 24” long, 17” wide, and 12” thick. Xstream features two independent feed stations that easily accommodate plant rolling stock or may be alternately integrated with existing conveyor systems to expedite the presentation of articles into the process stream. Xstream features state-of-the-art Barcode Reading (BCR) processes operating in a userfriendly Microsoft Windows based software environment. In addition, Xstream may be configured with a Weigh-On-Fly scale that supports Manifest Mailings. After weighing the articles (if equipped), reading the address blocks, or decoding the barcodes, articles are quickly and accurately sorted to output destinations according to he currently loaded sort plan. In its basic, dual-sided configuration, Xstream features up to 120 sort destinations. Articles are transported by grooved conveyor belts until one or more carbon fiber blocks known as “shoes” move across the conveyor belt and gently push an article into the destination handling unit or takeaway conveyor. Handling units include but are not limited to tubs, sacks, gondolas, or gaylords. Xstream is supported by time-tested software applications and utilities for system control and diagnostics, barcode processing, sort plan and report generation. Xstream is the perfect solution for any processing environment, including but not limited to the following: • Magazine Publishers 2013 • Postal Organizations • Courier Companies 26
JULY-AUGUST 2014 | www.PARCELindustry.com
• E-Commerce Distributors • Basic Material Handling Companies, and… • You!
COMPANIES
2014 2013
CONTACT INFO: COMPANY: OnTrac
PHONE:
800.334.5000
WEBSITE:
www.ontrac.com
EMAIL: When you choose a shipping company, you’re choosing flexibility, cost reduction, faster ground delivery and increased productivity.
Info@ontrac.com
With OnTrac, the largest regional overnight parcel delivery company in the 8 western states, you get all of that. We’ll enable your company to gain the competitive advantage, grow revenue and improve shareholder value while experiencing a faster, more cost effective form of delivery. Regional advantages include service, savings and convenience. With OnTrac, your company gets all the reliability you expect from the National Carriers, without the hassle and big volume commitments. Plus, you get fewer surcharges and simple, easy to understand contracts. Our ability to offer next-day delivery at Ground rates to more than 60 million consumers, and delivery to every ZIP Code in California, means OnTrac is your regional alternative. Guaranteed next-day delivery at Ground rates to Zone 4 destinations up to 500-600 miles from your distribution center means that OnTrac can help with last minute shipments, especially during peak season. Our customers enjoy later pickup times and because of our flexibility, they are able to send more shipments per day. This will be especially helpful in years when there are fewer shipping days between Thanksgiving and Christmas. (Keep in mind that in 2013, there were 17 shipping days in that time period and this year there will still only be 18). At OnTrac, it is our business to provide your company with a sustainable, competitive advantage plus better pricing improves expense management and ensures your profits aren’t lost in shipping. Our services are easy to use and we have all the latest mobile device and tracking capabilities. We will even offer you free, convenient pickups! The three divisions of OnTrac, Overnight, Messenger and International Mail, offer customers a broad range of services and encompass an extensive geographical area. OnTrac has supported each one of our shipments with a Money-Back Service Guarantee since we started our overnight division in 1991. As a SmartWay partner, OnTrac promises to do its part to save the environment, getting your shipments there with cleaner air.
COMPANIES
2014 2013
CONTACT INFO: COMPANY: PITT OHIO
PHONE:
800.366.7488
WEBSITE:
www.pittohio.com
P
ITT OHIO is a service organization dedicated to providing high-value transportation and supply chain solutions to our customers. PITT OHIO is “Customer Driven, People Driven and Quality Driven.” As an organization we remain committed to innovating in every area of our company with our SUPPLY CHAIN, GROUND, LTL and TRUCKLOAD services. We strive to take it to the next level by providing diverse transportation solutions that help optimize your supply chain.
EMAIL:
GroundShip@pittohio.com
At PITT OHIO we understand that when it comes to small package shipping, one size does not fit all. We provide a more flexible alternative to your small package shipping and we are able to deliver a GROUND service that is customizable, reliable and more cost effective. Our GROUND service is able to extend your range of service based on volume to offer a competitive GROUND solution. We also specialize in handling non-conveyable products that you may have claims issues with today such as paint, liquids or rakes. Our on-time performance for our GROUND service exceeds 97% and we have few damages with a shipment integrity that is better than the competition with 1 in 4000 packages experiencing a claim. For a seamless transition, complete integration services are ossible with our ShipStation shipping software and our dedicated customer service is available to provide you with quick resolution with any issue. PITT OHIO’s customer-centric mindset has allowed us to give more customers what they want and need to be more competitive in the marketplace. This customer-centric mindset is evident with our participation in The Reliance Network (TRNET) an alliance consisting of ourselves and six other regional LTL carriers who provide service throughout North America. PITT OHIO continually strives to provide the most reliable service and is committed to our customers, our employees, and our community; We’re Always There For You!
COMPANIES
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CONTACT INFO: COMPANY: Postea, Inc.
PHONE:
703.204.1695
WEBSITE:
www.postea.com
P
EMAIL: ostea was founded in 2007 and it wasn’t long before the company was awarded the first of its patents and was well on its way to developing its breakthrough product, QubeVu.
bizdev@postea.com
QubeVu. Instant dims and data, from almost anything. With QubeVu, dimensioning is just the beginning. In a single, instantaneous scan, QubeVu captures dimensions, weight, barcodes and OCR data — even a photo of the item for verification and claim protection. QubeVu scans anything: parcels, documents, tubes, polybags, pallets, and non-conveyable freight — even irregular shapes. Volumetric management, revenue optimization and compliance From e-commerce and express logistics to bulk freight, supply chain and retail QubeVu brings a new level of intelligence to every scan — enabling system-wide volumetric management and enhancing revenue optimization and compliance. No matter your industry, QubeVu can help you capture significantly more revenue and manage resources more efficiently. And QubeVu supports Big Data analysis to reveal even more savings and growth opportunities. Painless integration QubeVu’s patented 3D dimensioning technology outperforms other systems at a fraction of the cost — all in an economical, zero-footprint design requiring no buildout. Add QubeVu seamlessly to existing operations or flexibly deploy units to spread load and eliminate bottlenecks. Pole, wall, and ceiling mount options mean QubeVu can be used anywhere — over rollers, tables, or floor scales. And our new Handheld version is now in Alpha release. Unparalleled reliability and ease of use QubeVu is packed with smarts, not belts and gears. No moving parts means greater reliability, simpler repair (MTTR < 10 minutes), and incredibly easy operation. QubeVu requires no parcel alignment or special handling and, of course, no waiting, so efficiency goes up while labor costs go down.
COMPANIES
2014 2013
CONTACT INFO: COMPANY: Stamps.com
PHONE:
888.927.8267
WEBSITE:
www.stamps.com/parcel
T
he Leader in USPS Shipping Technology and Automation As a strategic partner of the United States Postal Service since 1999, Stamps.com has been providing award-winning shipping and postal technology for some of the world’s largest companies. With over 500,000 customers and over 100 patents, Stamps.com has become the world leader in online postage technology and automation. Our shipping integrations with Amazon.com, eBay, Yahoo! and Paypal have also established Stamps.com as a driving force in global e-commerce shipping. Whether it’s our powerful stand-alone batch shipping software (with direct database integration) or our complete Web Services API, Stamps.com has solutions in place to increase the effectiveness and efficiency of your shipping and fulfillment process.
EMAIL:
solutions@stamps.com
Seamlessly integrate low-cost USPS shipping into your existing operations With Stamps.com, you can easily integrate USPS shipping services into your existing warehouse workflow. Wherever, whenever, however you need USPS services, Stamps.com delivers. Integrated directly into your e-commerce platform? Sure. Warehouse, transportation or ERP management systems? No problem. API? Easy. Stamps.com gives you the power to completely customize the shipping process to meet the needs of your business. Best of all, we make the USPS as easy to use as any private carrier. We even have USPS postage invoicing options. Automation makes USPS shipping easier From importing and managing orders to selecting the best shipping methods, Stamps.com can help your warehouse practically run itself… faster, smarter and more efficiently. • • • • • •
Selects best rates based on custom shipping rules and customer preferences Links multiple workstations and warehouses for better control and visibility Auto-generates USPS-compliant labels and documents (Domestic and International) Improves shipping operational efficiencies and transportation costs Automates post-back from export files/ODBC Improves delivery accuracy with automated address cleansing
Unmatched Speed and Proven Reliability You don’t have time to sit and wait for orders to be processed and shipped. Not a worry with Stamps.com. With lightning-fast batch shipping and API, Stamps.com can process thousands of orders in minutes. Of course, speed means nothing without reliability. Our 99.9% uptime leads the industry. It’s no wonder Amazon.com, USPS.com and Intuit count on us for their shipping technology… along with over 500,000 other Stamps.com customers that process over 3,000,000 shipments daily.
COMPANIES
2014 2013
CONTACT INFO: COMPANY: U.S. Cargo
PHONE:
614.552.2746
WEBSITE:
www.us-cargo.com
EMAIL: U.S Cargo a Regional Small Package Transportation Company Specializing In Providing Flexible and Customized Solutions.
Rrichter@us-cargo.com
U.S Cargo is a specialized regional courier and package delivery company providing consistent, cost-effective, and reliable ground, premium, and customized services. We offer diversified ground services to our customers and provide them with high-value, low-cost solutions. At U.S. Cargo, we identify, design, and deliver innovative, flexible, and servicesensitive transportation solutions encompassing dedicated courier, final mile, pool distribution, parcel, and lightweight LTL. Our solutions create sustainable, long-term value for our customers, business partners, and employees. U.S. Cargo differentiates itself by offering a personalized approach and commitment to meeting and exceeding our customer’s transportation and logistical needs, whether their requirements are standard or unique. If you need your freight delivered earlier than a standard delivery time, our Premium Delivery Services are available upon request. We specialize in being flexible when it comes to your shipping of parcels and small packages. The ability to offer customized solutions distinguishes our company from the others. We are able to handle inventory pick/pack and distribution, management of dedicated transportation systems, and white glove delivery services including assembly and installation. And these are just a few of the solutions U.S. Cargo can provide! We work with you on the solution that best fits your supply chain. Since 1972, we have provided superior on-time service and optimal package handling. We believe in having a hands-on approach to package sorting, and we offer better shipment integrity than our competition. Only 1 in 6,000 packages in our system experience a claim. U.S. Cargo’s comprehensive website puts visibility at your fingertips, providing you with full tracking and tracing capability in real time as well as enabling you to conveniently print your shipping labels. At U.S. Cargo, customers are not just a number. We have a dedicated Customer Service team at both the corporate and the local service station levels in order to ensure that you receive prompt and professional response and follow-up. We pride ourselves in being a strong regional carrier who delivers consistent, cost-effective, and reliable service and solutions to accommodate our customers.
COMPANIES
2014 2013
Unlock and Diversify: Optimizing DTC Parcel Delivery It’s time to reconstruct the mousetrap. That’s good news for shippers locked into a predetermined carrier — complete with multiple touch points, unnecessary fees and less-than-optimal networks — for their delivery services. By its fluid, evolutionary nature — the e-commerce explosion; consumer purchases made from tablets, smartphones and other mobile devices; more flexible, customer-centric return policies — the retail industry has never been more challenging or ripe with opportunity to enhance the consumer experience. Although they’re not the entire narrative, the numbers alone present a compelling storyline. In 2012 U.S. retailers rung up sales of over $3 trillion. E-commerce sales comprised 7.3% of this total, representing the ninth consecutive yearly increase in percentage of overall sales, 32
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and experts predict this will eclipse 10% by 2016. The rising tide of online sales, nearing $300 billion annually and fueled primarily by retailers producing more than $100 million/year in e-commerce sales, boasts a yearly growth rate exceeding 25% and outpaces overall retail growth by three to four times. This consumer clout shows no signs of weakening; in fact, studies show that shoppers are ratcheting up their demands, from expectations for free shipping to the convenience of hassle-free returns policies. Which begs the question: What’s the state of your direct-to-consumer (DTC) delivery network? More specifically, are transit speed and reliability, transportation costs and shipment visibility at optimal levels?
Beyond Brown and Ground It’s a straightforward goal: Deliver products to customers quickly and at the best cost — all backed by complete visibility that reduces calls for WISMO (Where Is My Order?). But depending on which carrier you’re using, shipments encounter many stops and starts, which can cause delays, increase costs and jeopardize customer service. The major carriers are, not surprisingly, UPS and FedEx. Their products and services basically fall into the following buckets: air expedited, core ground and postal integration for residentially destined parcels. In the DTC transportation world, UPS offers not only well-known commercial air and ground products (each tacks on a surcharge for residential delivery), but also two economy postal-integration products. These products — UPS SurePost, a residential ground service focusing on
In an interesting paradox, UPS and FedEx, the two largest postal integrators and USPS partners, are also USPS competitors. Also noteworthy is the concept of “channel conflict” among these two behemoths — that is, engineering networks to protect higher-margin products. Their postal-integration products offer an economical yet slightly slower delivery experience than their core commercial air and ground products. So, if you could receive comparable delivery times from a lower-cost product, which would you choose? The USPS offers several products enabling sophisticated work-share scenarios that maintain the pseudo-federal agency’s focus on its core strength — the final mile — while distinguishing it from other carriers. The USPS recognizes a simple con-
a common partner — the USPS. On any day, on any mail carrier route, parcels injected from all five of these can be present in the USPS network. The closer the injection is to the consumer, the greater the discount, with the greatest discount occurring for injecting at the local post office, or DD¬U.
Optimal Help for the Optimal Mousetrap Monitoring costs and efficiency while meeting your customers’ demands and optimizing speed of transit can be daunting to the point that choosing a carrier trumps any consideration of ensuring an optimal transportation network. Although the major carriers present plenty of options, putting all of your eggs in one basket — a single carrier — limits the potential benefits. Partnering with a third-party logistics (3PL) provider opens many doors for your distribution strategy. 3PL providers have unique insights across the entire supply chain and the expertise to drill down into the specifics of shipping patterns, the nuances of consumer behavior and your objectives. As a result, you might be in unfamiliar territory: using multiple carriers and services. 3PL providers can design a combination of delivery and return options to best fit your product mix, transit expectations and visibility needs. Although most 3PL providers are very knowledgeable about UPS and FedEx, a select few have the same degree of knowledge of final-mile delivery, which is so crucial in today’s environment. The bottom line is, being locked into a contract with a particular carrier might ensure that your products are delivered to your customers. But surcharges and fees, combined with a lack of visibility and onerous restrictions, can hamstring your network. So, are you ready to rebuild your mousetrap?
This begs the question: What’s the state of your direct-to-consumer (DTC) delivery network? By Jaris Briski parcels greater than one pound, and UPS Mail Innovations, which moves parcels less than one pound — rely on the U.S. Postal Service (USPS) for final-mile delivery through the USPS’s Parcel Select work-share discount program. With either product, shipments move in different paths within the UPS network of sort and distribution centers. FedEx is structured similarly, with its own core expedited air products and its ground product, FedEx Ground. Unlike UPS, FedEx has one postal-integration product. FedEx SmartPost, the largest USPS parcel work-share partner, injects hundreds of millions of parcels annually into the USPS network, relying on saturated final-mile delivery six days per week. The target parcel profile is “lightweight” (one to five pounds), though parcels outside this range are also included.
cept: Focusing on final mile, residential delivery yields more work-sharing options, thereby deflecting costs, growing profits and increasing volume. The primary USPS products are Priority Mail, for packages over one pound, and First Class Mail, an affordable service for packages weighing up to 15.99 oz. with delivery in three days or less. Extending the work-sharing concept, the USPS offers several discount options based on preparation (e.g., presorting by ZIP Code, facility or mail-class schemes). DHL Global Mail and Newgistics also provide delivery services in partnership with the USPS. DHL focuses on parcels less than one pound; Newgistics handles parcels both under and over one pound. Both operate networks independent of the larger integrators and rely on a national network of regional parcel carriers to inject parcels into the USPS network. UPS SurePost and Mail Innovations, FedEx SmartPost, Newgistics and DHL Global Mail all are postal integrators, providing a residential delivery option with
JARIS BRISKI is GENCO’s General Manager of Integrated Parcel Solutions. JULY-AUGUST 2014 | www.PARCELindustry.com
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OVERCOMING LOGISTICAL CHALLENGES WITH CREATIVITY Unique relationships with carriers help keep packages flying out the door
Whether you are accessing this article via smartphone, tablet, laptop or some other electronic device, your product of choice was most likely prototyped using parts sourced from global electronic component distributor Digi-Key Corporation. Throughout the 40+ year history of the company, its parts have made their way into numerous industries and applications, even hitching a ride into space on a NASA space shuttle. Digi-Key Corporation is a world-class electronic component distributor, with
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annual sales exceeding $1.6 billion to a global customer base of over 550,000 professional engineers, component purchasers and others interested and/or involved in product design and development. The company stocks over one million individual components, available for immediate shipment from their 800,000 square-foot warehouse. These facts and figures often draw comparisons to other industry leaders, but the basic vital statistics are truly where the similarities end.
Unlike many of their closest competitors, Digi-Key is not based in or near a large metropolitan area. The company is nestled in Thief River Falls, a northwest Minnesota town of less than 9,000 people. Founded in his hometown, Dr. Ronald Stordahl started Digi-Key in 1972 with the intent of overcoming a typical problem for other electronics enthusiasts: sourcing electronic components in non-standard quantities. Prior to having access to Digi-Key’s unique model, electronic components could only be sourced in standard quantities, often in excess of 1,000 individual components. Digi-Key took a novel approach to sourcing these components by taking the carrying cost out of the equation, breaking down the standard packages, and shipping components in quantities as small as a single part. The company enjoyed tremendous success, growing rapidly year over year as customer adoption of the Digi-Key model spread like wildfire. As orders continued to grow unabated, and packages flew off the shelves, they began to realize that timely delivery of these products to a worldwide customer base was a top priority. However, Digi-Key’s lack of proximity to major transit routes and shipping hubs presented a hindrance to continued growth. At that time, Digi-Key stopped processing orders at 4 p.m. to accommodate UPS and FedEx pickup hours. The carriers then made the six-hour trip to Minneapolis, loading the packages onto planes headed to the carriers’ hubs in Louisville and Memphis. Digi-Key quickly realized that if it could process orders later into the day, all involved companies would stand to see increased business, faster order-to-delivery times, and thereby, increased profits. Executives met directly with the carriers to work on finding a solution to the shipping quandary. After much thought and deliberation, the best solution was the simplest: the designation of Digi-Key-specific flights in and out of Thief River Falls. Both carriers now provide multiple flights in and out each day, allowing Digi-Key to process orders
up to as late as 8:00 p.m. while offering the attractive option of overnight delivery anywhere in the country. The arrangement has been well received by all companies involved. UPS and FedEx have been able to streamline their delivery and pickup operations and provide better service, and Digi-Key has realized exponential increases in sales, even expanding operations in Europe, Asia and the Middle East. However, while the concept seems simple in theory, much more than just redirecting a few planes has gone into making this arrangement a success.
hangar on-site at the airport provides a controlled environment for loading and housing freight aircraft. Following suit, the city and county formed an airport authority in 2013 to support future upgrades and maintenance of the airport. As far back as its earliest origins in 1972, Digi-Key has traditionally taken the path less traveled, opting to seek out what would be best for its customers, rather than looking over their shoulder to see what everyone else was doing. Eschewing traditional business models and blazing a new trail within the electronic
Digi-Key orders are typically entered, boxed and ready for shipment in a matter of minutes following a confirmed order from a customer. Digi-Key orders are typically entered, boxed and ready for shipment in a matter of minutes following a confirmed order from a customer. Enabling the carriers to smoothly transition these parcels onto their trucks and out to the airport necessitated another creative solution. Digi-Key has designated specific areas within the PDC (Product Distribution Center) to allow the carriers to prepare and stage shipments. UPS and FedEx employees are onsite during the pick and pack process, scanning and loading packages. The packages are pre-sorted by Digi-Key into containers by ZIP Code, shipping method, or by the specific region to which the package will be sent. FedEx has even gone so far as to pack the boxes directly into their unique shipping containers, which can then be easily loaded onto the waiting planes at the airport. With a sizeable portion of the county employed at Digi-Key, the city and airport recognized the need to continue fostering the growth of the company, and rallied to provide much needed support for the initiative. A new 20,000 square-foot
component distribution industry has allowed the company to realize incredible growth. Whether through innovations such as early adoption of the e-commerce model, a wealth of online technical resources, and 24/7 product support, or through low-tech value such as speaking with a real person whenever you pick up the phone to call Digi-Key, the company has made a living out of bucking trends and making customers happy. “Though it may sound cliché, our customers are our greatest resource,” said Dave Doherty, Executive Vice President of Operations at Digi-Key. “We have built a business around getting the right product into the hands of our customers, on their timeline, and providing support throughout the process of bringing their designs from prototype to production. Our unique relationship with our carriers has been integral in continuing to make good on this value proposition, and we look forward to continuing to grow our businesses together.”
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IS SOMEDAY’S SAME-DAY
TODAY? By Andrea Obston
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S
ame-day. It’s the Holy Grail of the logistics and delivery world. No one doubts that same-day delivery of products will be the norm someday. But is that “someday” today? And what will it take to make that happen? We asked a panel of industry veterans what they thought about those issues and what they think it will take to make same-day right for today. Our panel included three members of the Board of Directors from the Customized Logistics and Delivery Association (CLDA), the industry’s largest trade association. They included: Steve Howard, President, Esquire Express, Inc. / Esquire Logistics Company in Hialeah, FL; Charles R. Moyer, CEO, Express Courier in Franklin, TN and Monte O’Hara, CEO/President of Capital Express, Inc. in Omaha, NE.
QUESTION: We all know same-day is the center of a lot of conversations in our industry. What are your thoughts? MOYER: The topic is certainly getting plenty of press. In evaluating these opportunities with my colleagues we all feel that ultimately same- day will become the “new norm”. When you’ve got giants like Amazon and eBay trying to make it work, you know it’s going to happen. But right now, everyone is looking for the right formula. It’s like when Fred Smith was starting FedEx. Before then, people would say, “There’s no need for that. If people can get things in two days why would they need them the next day?” Well, we all know what happened there. Once FedEx made it do-able and reliable, overnight became expected. From my perspective same-day will do the same in the near future, and in many cases already being done today for various customers by companies like Express. HOWARD: Where will this trend play out? I don’t think anyone knows for sure. Look, the big guys like Target and Kmart
have already begun the process of looking at same-day deliveries. They know it’s how they will stay alive and compete because consumers are going that way. But, even the big guys haven’t quite mastered same-day. Our largest grocery chain here in South Florida is Publix. I get my meds there and I keep asking them, “When are you going to be able to deliver those to me same-day?” They say, “We’d love to but we haven’t figured it out yet.” For these guys to do it, they are going to have to partner in some way with those who do the deliveries. They could go out and reinvent the wheel on this, but they’re more likely to look for ways to get together with existing customized and logistics and delivery companies. We already know how to do it. That’s why eBay bought up Shutl.
in their cars to pick up the merchandise. That’s certainly the wave of the future. Heck, even Burger King’s getting into the act. If they are rolling out free deliveries in our market. They are testing it here, but how long will it be before they offer it all over the country?
Are the Big Retailers Close to Making Same-Day it Happen? O’HARA: They have certainly been thinking about it, but they are well aware of the challenges it presents. I’ve been in the conference rooms of several big retailers about this service multiple times. They’ve been trying to make this work. In fact, I know several that have been looking at this for three and four years. The Big Retailers have the advantage of
I believe that same-day delivery from the Big Retailers will eventually become the norm. Consumer demand will make it happen. It’s not just the delivery component. It’s everything that gets you to the delivery, tying together shopping on-line, finding the product in your system, pulling the product and getting it ready for the delivery. Right now, they don’t know how to make that work. The delivery is the very end. Without it, nothing works. Otherwise the customers could just come and pick it up themselves. And big retailers already have that part figured out. You can place an order on-line. The retailer says, “Give us two hours to pull it and you can come pick it up.” What they still can’t master is putting together the convenience of shopping on-line and offering a same-day delivery component. They know the consumer wants the convenience of shopping without having to get
having multiple locations throughout the US that could be used as mini-distribution centers for same-day delivery. It’s all about putting the merchandise as close to the end user as possible. But, it’s the logistics that are holding them up. They have been asking themselves if they want to spend the money to integrate a software system that, when someone’s online, locates the store that’s closest to them and has the item they want. Most of them already have this capability. But they still have to create a whole process in the store to pull that product and stage it for delivery to the end user. This would probably drive additional transportation costs from the distribution centers. Then, they will need to integrate with a sameday company that can manage a large
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network of courier companies across the US to provide the service at a price point that makes sense for them. In my opinion, they still don’t feel the customer need is high enough except in the most populated cities to make it worth their while to adapt their models. That’s why they are talking to members of our industry. It’s in our DNA to deliver whatever, whenever the customer needs it
Let’s talk more about the software issue. MOYER: My theory is if any retailers had the capacity to link their on-line purchasing software (website) to each phase of the supply chain, it would make same-day a reality. If I went onto Chuck’s Value Mart website and wanted to order an item, I’d just click on that item, the system would cross reference my geographic location with the retailers inventory, provide the buyer the information on the item as well as available delivery options, allowing the purchaser to select their preferred options and communicate the details of the purchase to the buyer, seller, warehouse personnel and delivery company. Once the purchase was confirmed then the product would be tracked each step of the process with confirmation to all parties once delivered. To make it work, they’d need to have arrangements and system integrations with service providers. When the order was placed, the system would have the store or warehouse pull the item, and send an alert to the regional carrier to come pick it up and delivery it. In this enviroment, the software would have a specified radius (or zip codes) around the store and would offer the consumer the options and costs of those options within that specified area. If, for example, the consumer lived three miles from the store, their options would be different than for someone who lived 30 miles away.
We’ve spent a lot of time on large retailers. How will this affect the smaller ones?
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HOWARD: It’s going to be tough on them. As soon as an Amazon gets into same-day it’s going to put a strain on them to compete. If Amazon offers same-day and they continue to be the low price leader how are regional and larger retailers going to compete? It will be a challenge. For example I was talking a local furniture store. They wanted me to do sameday and next-day deliveries for them. They know they have to compete with on-line shopping. But they don’t have the people and money to do things like updating their website every time something comes in. It’s tough for them to compete with those who do. It’s different with high-end retailers. We’re working with a number of them. They have customers who buy a lot of merchandise. They’ll contact us to deliver it to their customers’ homes. But that’s different than offering it to the masses. They want ways to shop on-line and then have ways to make it easy and cheap for them to ask for a same-day, home delivery. Those two elements have to fit together and it’s tough on smaller establishments. Then there’s the return issue. Say someone orders a piece of furniture on-line and doesn’t like it. The cost of getting it back to the retailer who shipped it is prohibitive. This is a big issue for smaller retailers. They are struggling with that. If customers are shopping on-line, they demand the option to return it. They get it from most on-line retailers. But for a small establishment, that’s a big cost.
What’s the bottom line on same-day for retailers, big and small? O’HARA: I believe that retailers want to do it, but they don’t think the demand is high enough for them to invest in the resources to make it happen in most of the US yet. There’s been a lot of talk about same-day, but we aren’t seeing a big enough demand to make retailers want to invest in the resources needed to make it happen. Some retailers are making it happen on a small level in the most populated
cities now. But I don’t believe that they are ready to make the investment to make it available across the country. I just don’t believe they feel the density is there yet. As everyone knows, Amazon has offered same-day for some time from their 11 main distribution centers. They’ve started to build forward stocking locations to get merchandise closer to the end user so that they can expand on this service. But, for the most part, Amazon’s only offering same-day delivery near these existing distribution centers and those are in the densest part of the country. For example, when I did a test about 18 months ago in Chicago, Amazon offered same-day delivery by 8:00 PM through their warehouse outside Indianapolis. If, for example, you order a DeWalt drill, you can select FedEx overnight delivery. You can also get it next day for a delivery charge of approximately $30.00. If you chose same-day delivery that they were offering in selected areas including Chicago, the delivery charge was less than half the delivery cost of the FedEx Over-night. The cut off time to order the same-day service was early morning at that time. They were using members of the CLDA to handle the same day services. As far as the small retailers, strategic stocking locations to provide same-day delivery in select areas, seems to be their best option. I believe that same-day delivery from the Big Retailers will eventually become the norm. Consumer demand will make it happen. But in my opinion, today “sameday” is a number of days away for many parts of the US.
ANDREA OBSTON is Director of Public Relations, Customized Logistics and Delivery Association
PARCEL COUNSEL BY BRENT WM. PRIMUS, J.D
Damages, Damages, Damages Part II n the last installment of PARCEL Counsel we focused on three categories of “damages.” As explained there, the term “damages” is applied to losses sustained by one party as the result of another party’s conduct. The types of damages that we focused on in the last installment were actual damages, consequential damages, and irreparable damages.
JUMP IN! THE WATER IS FINE? Another category of damages are liquidated damages. These are also referred to as stipulated damages. These terms are used to describe the situation where the parties have agreed in a contract that if one party breaches the contract, the amount owed to the other party will be a specified amount. The amount of the liquidated damages can be, and usually are, either more or less than the actual damages. The benefit of having a liquidated damage clause in a contract is that it only leaves open the question as to whether a party has breached the contract and avoids the necessity of having to litigate the appropriate dollar amount to compensate for such a breach.
TWOFERS: CONSIGNEE CHARGEBACKS As used here, the term “consignee chargebacks” refers to a process whereby a purchaser of goods deducts a certain dollar amount when paying the seller’s invoice based upon the terms of the sales agreement between the seller (shipper) and buyer (receiver). Consignee chargebacks have been around in various forms 40
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for a long time. However, in recent years a new form has arrived which gives rise to a new set of problems for sellers of goods and their carriers. The more recent form of consignee chargebacks arises out of a problem with the manner or way in which the goods are delivered — as opposed to a problem with the goods themselves. An example of this category of chargebacks is when the seller’s carrier misses a delivery appointment. If the carrier arrives at destination outside of a specified window of time, the receiving buyer reduces the seller’s invoice by a certain amount, that is, a chargeback as liquidated damages for the late delivery In addition to deductions for missing a delivery appointment, there can also be chargebacks for rescheduling a delivery appointment and other sundry items such as a missing packing list. It is my understanding that these chargebacks can range from $100 to as much as $500. For a certain delivery there could be multiple chargebacks. An interesting aspect of consignee chargebacks is that they can simultaneously be both liquidated and consequential damages. They are liquidated damages in the context of the agreement between a seller and buyer of goods that is, when the parties have agreed that the buyer may deduct certain amounts from those otherwise due in the event of certain occurrences, e.g., a late delivery appointment or missing packing slip. However, as a seller starts to feel the economic pinch of the chargebacks, the carriers may also become involved. This is because the seller will look to the carrier for compensation and file a claim with the carrier to recover its loss. However, the carriers will almost universally reject
such claims on the grounds that they are in the nature of “consequential” or “incidental” damages, which, as discussed in the last installment, are generally not recoverable unless reasonably foreseeable. It should be noted that most carriers will state in their tariffs that consequential damages are not recoverable even if reasonably foreseeable. So far as I’m aware, the enforceability of such a provision has not been tested in court.
WARNING! STAY CLEAR OF THESE!! The last category of damages that we will consider are those known as punitive damages, exemplary damages, or treble damages. These are damages which are imposed to punish the offending party and/or serve as an example to others not to engage in such conduct. The laws relating as to when a court may or may not impose such damages are set by the laws of each state, as well as by federal law. In some instances, treble damages are set by a specific statute. Alternatively, punitive damages can be awarded according to court decisions authorizing them when the harm is caused by someone “acting with a conscious disregard of the rights of others”. As a general principle, such state law remedies are not allowed in cargo claims asserted against a motor carrier or rail carrier operating in interstate commerce. All for now!
BRENT WM. PRIMUS, J.D., is the CEO of Primus Law Office, P.A. and the Senior Editor of transportlawtexts, inc. Previous columns, including those of William J. Augello, may be found in the “Content Library” on the PARCEL website (www.PARCELindustry.com). Your questions are welcome at brent@primuslawoffice.com.
WRAP UP BY MICHAEL J. RYAN
Multi-Carrier Strategy he recent announcement from FedEx and then UPS about charging dimensional weight for ground shipments is becoming a game changer in the parcel industry. It is interesting that both these announcements were about a month apart. This is still a residual effect of DHL leaving the domestic market in the US. The USPS is taking an offensive charge at FedEx and UPS with its recent Priority Mail rate reduction announcement, which is scheduled for September. There is a need in the US parcel business to start to drive to “un-bundle” the single carrier strategy. The major carriers have touted this approach to seek more business from existing clients and drive down their total cost. Here are three approaches to optimize your parcel spend: 1. Multi-Carrier Shipping Platforms: In order to begin a multi-carrier strategy, you will need to move off the carrier-supplied platforms and deploy a multiple carrier platform. This will instantly create a “bargaining” position with your primary carrier. If they know you have the ability to move your business in a flip of a button, they will be more willing to negotiate with you. There are many different systems in the market. Here are a few of them: iABOL, Pro Ship, ADSI, Logicor, Kewill, Varsity and Pitney Bowes. 2. Carrier Contracts: Simply put, you need a contract with each carrier. This can be
done in a number of ways. You can go directly to each carrier and sign a contract. You will be expected to make a revenue commitment to each carrier; do your homework with this approach. You can also look at using a 3PL’s agreement or resellers (for smaller shippers), which is usually non-contractual. The USPS should be looked at for all lightweight shipments (1-10 lbs). The USPS is truly the new “challenger” competitor. 3. 3PN: I am a strong proponent of using third party negotiators. They are experts in analyzing contracts, data and identifying negotiation opportunities. There are many ways of reducing your parcel costs, and they will find them for you. There is also a new software on the market that allows the shippers to obtain the “tools” similar to the 3PNs; check out www.parcelview.com as an alterna-
tive solution. Please keep in mind that you do not get the expertise of the 3PN when you take this approach. The peak season is right around the corner and most shippers are preparing for another successful holiday season. Please keep in mind that the parcel industry will experience the largest price increase in the history of shipping in the US with the new dimensional weight rule for ground services. FedEx and UPS have built highly effective distribution networks in the US but it’s time to take control of how you spend your parcel dollars. A multi-carrier approach maintains a competitive spirit for all carriers and allows the shipper to optimize their parcel spend.
MICHAEL J. RYAN is the Executive Vice President at Pro Star Logistics and has over 25 years’ experience in the parcel industry. He can be reached at 708.224.1498 or michael.ryan@prostar.com.
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JULY-AUGUST 2014 | www.PARCELindustry.com
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