Transcript AVOID THOSE HIDDEN SHIPPING CHARGES!

Small Package Shipping State of the Industry
Presented By:
Mike Erickson, President/CEO
AIMED Fall Conference - St. Louis
Friday, October 22nd 3:00 - 4:00pm
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We Are Comparing The Four Integrated Carriers
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DHL
 Formerly Airborne
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FedEx
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UPS
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USPS
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Today’s Competitive Marketplace
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Carriers are battling it out for
market share and competition is
greater than ever before
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Why is this happening now?
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Recent Industry Trend: Carriers Now Offer a Full
Portfolio of Services
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A number of factors have converged to create the most
competitive small parcel marketplace ever
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In prior years, each carrier had a unique market niche,
and were content to concentrate on that area: there was
little or no market overlap
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UPS, FedEx, DHL, and the Postal Service now offer a
full suite of air, ground, and international shipping options
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Late 1990’s: Each Carrier Had A Market Niche
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UPS was the ground carrier of choice
FedEx was the air carrier of choice
DHL was the strongest international carrier
USPS concentrated on mail and residential small
parcel shipments
Airborne-low cost express
RPS-commercial ground shipments to metro
areas
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Factors Contributing To Increased Competition
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Economy
 Package volume growth has been flat
 Not as many new packages are being shipped
 Carriers must get their additional volume from other
carriers
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Available Capacity
 New regional hubs, larger truck networks and enhanced
technology allow carriers to handle more volume
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Factors Contributing To Increased Competition
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Technology
 Sorting Facilities
 Bar-coding
 Tracking
 Shipping Automation
 Interactive Websites
 EDI Billing Advances
 Data Capture Technology
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UPS Technology
UPS CampusShip
 UPS WorldShip
 UPS OnLine Compatible Solutions
 ConnectShip UPS Toolkit
 UPS Address Validation
 The Quantum View
 Billing Format Options
 Flat File Bill
 EDI-generated bill
 Paper bill
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FedEx Technology
FedEx Café
 FedEx Ship Manager
 FedEx.com - online shipping
 FedEx Insight
 Adhoc Reporting
 Billing Options
 EDI
 Datalink
 Download invoices from Fedex.com
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Factors Contributing To Increased Competition
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New Services
 Faster Ground networks
 Residential offerings
 Special freight services
 UPS store
 FedEx Kinkos
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Portfolio Pricing – The single biggest factor!
 Carriers offer the maximum discounts only if you
give them most, if not all of your business
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New Ground Competition
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UPS and FedEx have enhanced ground delivery
times; ground shipments are now day-definite
and guaranteed
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FedEx Home Delivery now serves the entire US
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The merger of Airborne & DHL creates a new,
strong competitor
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USPS Parcel Select: new service enhancements,
new partners
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New Air Competition
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On-time performance is at an all time high for all
carriers
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Carriers have switched most customers from flatrate (unzoned) pricing, to zone-based pricing
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Carriers are now targeting specific segments of
the air market (letters, heavier and larger
shipments, industry groups, etc.)
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New International Competition
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While domestic growth is flat, international growth is in
double digits
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FedEx and UPS have added new overseas infrastructure,
new hubs
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Airborne, formerly weak in the international segment, has
now become a key player thanks to the deal with DHL
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Knowledge is Power
Carrier Reports Equal Knowledge
and Opportunity!
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Common Add On Charges:
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Address corrections
Residential delivery
Oversize charges (ground)
Dimensional charges (air)
Saturday delivery
Declared value (insurance)
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New Add On Charges:
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Fuel surcharges
Delivery area surcharge on air shipments
Excess tracking fee
Package return charges
Security surcharges
At last count, there are more than 80!
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Fuel Surcharges - Are At An All Time High!
UPS - 9.5%
 FedEx - 9.5%
 DHL - 9.8%
*These new rates were effective October 4th, 2004
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Ground -- All carriers dropped fuel surcharge
USPS -- No surcharge
They’re no longer “temporary”
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Residential Surcharges
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FedEx air & ground $1.75
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FedEx Home Delivery $1.40
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DHL $1.75
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UPS $1.40
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Rural Surcharges
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Carriers call them “delivery area surcharges”
$1.00 Commercial
$1.75 Residential
$15.00 Alaska
You can obtain DAS files from carrier websites
AFMS can email you a DAS file we co-developed with
Postal World Magazine - has all carriers and includes
zip, city and state
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Ground Delivery - Delays
UPS, FedEx Ground & Express, DHL:
Monday Through Friday
FedEx Home Delivery:
Tuesday Through Saturday
USPS:
Monday Through Saturday
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Ground Transit Times
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FedEx and UPS – Dramatically Improved
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Ground Transit Time
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DHL – Adding New Ground Hubs (to be completed in 2005)
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Ground Pricing
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UPS, FedEx And DHL Have Essentially The Same
Base Ground Rates
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USPS-Has It’s Own Pricing
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Air Pricing:
Flat Rates VS Zoned Rates
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Carriers Are Moving From Flat To Zoned Rates
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Big Change In Priority Mail Last June - Only 1lb is Now
Flat Rate
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Are You Better Off With Flat Or Zoned Rates?
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What They Say
All Air And Ground Commercial Packages
Are Guaranteed To Be Delivered On-Time...
Or You Get Your Money Back!
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What They Actually Do
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Many New “EXCEPTION CODES”
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Some New Contracts Prohibit Refunds
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New Penalty Charges
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Shorter Audit Times
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QUESTIONS?
THANK YOU!
[email protected]
1-800-246-3521
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