Parcel express shippers must use “leverage”

Recent news signaling a reduction in USPS service has parcel express shippers concerned about the expense of relying on the UPS-FedEx “duopoly.”

But there are still strategic and tactical methods available to control costs and improve efficiency, said Rob Martinez, president & CEO of Shipware Systems Corp.

In an exclusive interview with SCMR, he provided readers with several supply chain management tips. First and foremost, he advised to leverage the fact that FedEx and UPS are now multi-modal transportation providers.

“If you use these carriers exclusively for domestic parcel services, but have other transportation needs (LTL, TL, international forwarding, ocean), your combined volumes may enhance your overall discounts,” he said.

Martinez also recommends that residential shippers should explore deferred services like FedEx SmartPost, UPS Mail Innovation, UPS Basic, Newgistics and other USPS Parcel Select providers.

“These services leverage the private carriers’ core transportation expertise with the Postal Service’s final mile residential delivery expertise,” he said. “Transit times are competitive with rates that are less than Ground with fewer accessorial charges.”

Shippers should also consider using regional carriers or the USPS for a percentage of their traffic.

“Priority Mail is a terrific product that offers 2-3 delivery at competitive rates and no accessorial charges for lightweight shipments,” said Martinez.

He added that Volume shippers are entitled to “Commercial Plus” discounts or even negotiated pricing.

“But you don’t have to be a large shipper to realize savings,” he said. “Compare USPS flat rate products with the private carrier pricing. And companies like USS Logistics are authorized USPS resellers that can pass along significant savings.”

Finally, said Martinez, shippers should seek help.

“There are many qualified freight auditors, consulting companies and/or 3PL’s that can identify and recover bottom line savings,” he observed.

Martinez noted that shippers surveyed in the Morgan Stanley “Annual Best Practices Survey” reported savings up to 49 percent greater using third party resources than they were able to achieve without the help.

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