Parcel - November 2008 - (Page 23) Add to the equation another dramatic development: Recent financial woes of DHL are causing the company to relinquish its US ground operation. As a result, with one less competitor, FedEx, UPS, the regionals and USPS are poised to grab parts of that business. As the economy remains unstable, shippers, in an attempt to cut costs, are being more selective about the volume of their shipments and their method of distribution. Accordingly, more companies are considering ground services. And in the process, they are comparing the giants and the regionals. The differences of ground vs. air and nationals vs. regional are thus becoming more apparent and some age-old myths are being shattered. cameras and multi-carrier shipping systems enabled through proprietary partnership software with industry vendors. Regarding ZIP Code coverage, the giants can’t be matched in the United States and overseas. But that dynamic is shifting as well, with the regionals now providing service in 70% of ZIP Codes nationwide through business as well as residential deliveries. And then there’s that great equalizer: cost. Since May Peirstorff was “mailed” as a rail parcel, shippers have sought the most costeffective solutions. But today, pricing is more paramount than ever as cost-conscious companies realize that they can save millions of dollars in annual transport expenses. So, when regional carriers demonstrate they can be 15% to 25% more economical than the giants, companies are apt to take a second look. Looking ahead, air transport will certainly remain a critical part of supply chain management. But ground revenues should continue to increase, with the ground offerings of UPS and FedEx becoming greater profit centers. At the same time, in the battle of David vs. Goliath, the Davids may now be on even more solid ground. Ted Kauffman is Chairman of Eastern Connection (EC). Founded in 1983 and based in Woburn, Mass., EC, with 20 locations, is the largest regional parcel carrier on the East Coast. For more information, visit www.easternconnection.com. A Regional Groundswell With regard to flexibility, the nationals take up to three days or more to ship via ground. In contrast, Eastern Connection, through its latest deferred offering, guarantees next-day ground delivery by 5 PM in the same footprint. In terms of efficiency, regional ground transport, with fewer exchange points, has fewer margins for error, better damage control at sort centers and fewer claims. Despite public perception, ground transit is traditionally more reliable than air. Efficiency is improving among regionals now that technology in most cases is on par with the giants. This includes automated web-based shipping and tracking, digital scanners with www.PARCELindustry.com November 2008 23 http://www.easternconnection.com http://www.precisionsoftware.com http://www.precisionsoftware.com http://www.PARCELindustry.com
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