AVOID THOSE HIDDEN SHIPPING CHARGES!
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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
DHL
Formerly Airborne
FedEx
UPS
USPS
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Today’s Competitive Marketplace
Carriers are battling it out for
market share and competition is
greater than ever before
Why is this happening now?
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Recent Industry Trend: Carriers Now Offer a Full
Portfolio of Services
A number of factors have converged to create the most
competitive small parcel marketplace ever
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
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
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
Economy
Package volume growth has been flat
Not as many new packages are being shipped
Carriers must get their additional volume from other
carriers
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
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
New Services
Faster Ground networks
Residential offerings
Special freight services
UPS store
FedEx Kinkos
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
UPS and FedEx have enhanced ground delivery
times; ground shipments are now day-definite
and guaranteed
FedEx Home Delivery now serves the entire US
The merger of Airborne & DHL creates a new,
strong competitor
USPS Parcel Select: new service enhancements,
new partners
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New Air Competition
On-time performance is at an all time high for all
carriers
Carriers have switched most customers from flatrate (unzoned) pricing, to zone-based pricing
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
While domestic growth is flat, international growth is in
double digits
FedEx and UPS have added new overseas infrastructure,
new hubs
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:
Address corrections
Residential delivery
Oversize charges (ground)
Dimensional charges (air)
Saturday delivery
Declared value (insurance)
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New Add On Charges:
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
Ground -- All carriers dropped fuel surcharge
USPS -- No surcharge
They’re no longer “temporary”
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Residential Surcharges
FedEx air & ground $1.75
FedEx Home Delivery $1.40
DHL $1.75
UPS $1.40
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Rural Surcharges
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
FedEx and UPS – Dramatically Improved
Ground Transit Time
DHL – Adding New Ground Hubs (to be completed in 2005)
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Ground Pricing
UPS, FedEx And DHL Have Essentially The Same
Base Ground Rates
USPS-Has It’s Own Pricing
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Air Pricing:
Flat Rates VS Zoned Rates
Carriers Are Moving From Flat To Zoned Rates
Big Change In Priority Mail Last June - Only 1lb is Now
Flat Rate
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
Many New “EXCEPTION CODES”
Some New Contracts Prohibit Refunds
New Penalty Charges
Shorter Audit Times
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QUESTIONS?
THANK YOU!
[email protected]
1-800-246-3521
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