Parcel - October 2008 - (Page 14)

2008 SURVEY RESULTS Discounted Transportation Rates Overall Discounts1 Next Day FedEx UPS DHL DHL Two Day FedEx UPS DHL Ground FedEx UPS 43% 46% 38% 36% 47% 34% 17% 26% 25% >> DHL decreased its discounts for all service levels, while FedEx and UPS increased discounts from last year. USPS Enters Discount Game2 Don’t Know 33% Don’t Know 6% No 74% Yes 20% No 44% Yes 23% >> According to Morgan Stanley, “More rational pricing from the USPS is good for the industry, but could also create a more challenging competition for the private carriers.” Would a volume discount cause you to shift more volume to the USPS? Have you been approached by the USPS regarding volume discounts? 8 7 6 >> There has been no growth 5 in the number of companies 4 (11%) that use consultants 3 to negotiate rates in the past three years, even though 2 it 1 has 40 been 40 demonstrated they 0 help35 attain35 deeper discounts.1 Aggressiveness 7 6 5 4 3 2 1 Sept. ‘06 % of Respondents 11% >> Shippers say carriers are being more aggressive in trying to win business.2 8 40% 40 35 30 25 20 15 10 5 Accepting smaller rate increase 39% 38% 32% 6.4 6.2 4.5 8 8 Sept. ‘07 30 30 5 25 5 25 4 20 4 20 3 15 3 15 “While we see no signs of a price war, shippers’ responses 2 10 2 10 indicate that carriers are becoming slightly more aggressive 1 5 1 5 0 0 in using price to win business,” according 0 to Morgan 0 7 March 7 ‘07 6 6 40 6.3 35 30 25 20 15 10 5 March 0 ‘08 Raised rates More willing more than to negotiate prior years rates No change in price behavior 8 7 6 5 4 3 2 1 0 bringing up the ﬂoor on pricing, which may reduce the need to discount, according to Morgan Stanley’s spring survey results. When asked if legal challenges to FDX Ground’s independent contractor model caused any service issues, an overwhelming number of shippers (94%) responded with a resounding no. And of those few who were affected, only 30% were looking to shift freight to another carrier as a result.2 Stanley. On top of the US economic backdrop and with DHL’s reorganization of its US market, UPS and FedEx seem a bit more competitive on pricing to attract any business no longer served by DHL. Rate increases by carriers have been limited due to our economy, but larger rate increases from DHL and USPS are 1. Data from PARCEL’s August ‘08 Survey. 2. Data from Morgan Stanley’s March ‘08 Survey of PARCEL readers and other shippers. 14 October 2008 www.PARCELindustry.com http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - October 2008

Parcel - October 2008 Contents Editor's Note What Would Augello Say? Best Practices Survey Results Going with the Flow Is Your Parcel Network Optimized? Last (Mile), but Not Least Moving From Manual to Automated Fulfillment A Race for Excellence Making Ends Meet Is Your Job Killing You? Software Selection Demystified Controlling Costs On the Mark Product Profile New Products & Services Advertiser Index Wrap Up

Parcel - October 2008

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