Category

Shipping

10 Tips for Managing UPS/FedEx Relationships During this Time of Change

By | Shipping

Properly managing the UPS/FedEx service provider relationship has always been a challenge, but more so today than ever before. The dynamic pricing environment and COVID-driven supply chain disruptions are a handful to manage for all parties involved with both B2B and B2C parcel shipping transactions.

However, it is not just the businesses that ship products across America feeling the pain right now. UPS and FedEx are having to manage through unplanned growth, resulting in capacity constraints. Additionally, while the two mega-carriers are experiencing unbridled growth, that growth is in the lowest margin segment of their business: the residential delivery.

UPS and FedEx do an amazing job shipping nearly 40 million packages every day, and in general, provide excellent service on the ground and in the air. However, their operations and employees are realizing considerable stress in trying to provide the best service possible under difficult circumstances.

For shippers and merchants, forging a close working partnership with UPS/FedEx is crucial for managing during these challenging times. Here are some suggestions for keeping the carrier relationship strong, while at the same time, holding them accountable.

  • Put expectations in writing: Carrier representatives are the face of UPS/FedEx and it is up to the customer to take the lead in negotiating guidelines for maintaining open lines of communication between the two parties and setting expectations. To prevent misunderstandings, it is a good idea to put those communication guidelines and carrier expectations in writing.
  • Treat your sales professional with respect: It is not an easy job representing UPS or FedEx, and in most cases, your carrier representative is not directly responsible for bad things that happen. Give the carrier representative the required time to fix a bad situation, and to explain what is driving a bad result. Carrier representatives are more likely to provide excellent customer support if they are respected and treated professionally.
  • Embrace electronic interface with carrier representatives: The carrier representative position can be an overly demanding job, so returning calls to the customer in a timely fashion can be a challenge. I recommend using e-mail and texting to communicate less urgent matters with the rep and embracing Zoom-like teleconferencing platforms for discussion and review of critical matters. While the face-to-face visit is not dead, it may be on life-support thanks to client interface behavioral changes driven by the pandemic.
  • Use online problem-solving tools: Save the critical issues for the carrier representatives and use web-based, problem-solving tools for resolving issues of lesser importance.
  • Avoid accepting gifts from the carrier: Historically, the carriers have curried favor with customers via gifts and entertainment. This should be avoided as carrier performance, pricing and effective representation should be the primary factors considered when assessing the carrier relationships. Business lunches paid for by the carrier are still an effective communication platform for both parties.
  • Commit to periodic performance reviews: Require quarterly business reviews to go over carrier performance, shipping cost and carrier news/policy changes with the carrier representative.
  • Respect your negotiated pick-up time: UPS and FedEx measure the seconds between stops, and it is critical to carrier operations that drivers/parcel loads return to the terminal on time. Respect this carrier requirement by having your shipments ready for pick-up at the scheduled time.
  • Understand the rate negotiation process: Expect this process to be drawn out and be prepared to quantify your claims and positions with the carrier representative. Hold the carrier responsible for meeting progress deadlines during the negotiation process.
  • Do not share pricing proposals across the two carriers: Consider how important a solid, long-term relationship is with both carriers as there are no other integrated carrier options beyond UPS and FedEx. Mutual trust earned with a carrier can be destroyed by directly sharing a carrier pricing proposal with the competing carrier. Additionally, carrier agreements prohibit a customer from engaging in such practices.
  • Understand carrier fiduciary responsibility to shareholders: UPS and FedEx rates are a direct result of balancing what the carriers believe their customers will pay for their overall value propositions against required profit margins to support return on shareholder equity.

Having said all this, the shipper must evaluate the entire carrier value proposition, which is a combination of price, representation, and service, when determining the carrier of choice.

About the author

Contributing editor Dean Maciuba is Managing Partner of Last Mile Experts, an e-commerce last mile CEP consultancy. He advises clients on e-commerce, last mile, and courier express & parcel matters in the US and Canada.

Pandemic Driven Change in the Workplace: More to Come

By | Shipping

COVID is driving disruption in the workplace, and parcel carriers and 3PL providers are not immune to that change. Whether driven by management, the employee, or government, the response to the pandemic has forever changed the way we live, work and play.  We are entering a period of hypersensitivity in the workplace, especially as it applies to preventing the spread of infectious disease while at work.   That hypersensitivity will continue to drive change.

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5 Reasons Why USPS Is the Best Hope for UPL Adoption

By | Shipping

The UPL is an automated, electronically connected network of parcel lockers, usually managed by a single entity, that can accept parcels across multiple parcel carriers/retailers or users. No such truly universal parcel locker networks of any size exist in the US, although the concept is gaining popularity in some smaller European countries.

Why Does UPL make sense?

  • It allows the parcel carriers to consolidate costly residential deliveries at a single, automated, and secured pick-up point.
  • The UPL is environmentally friendly as it will drive the reduction of delivery vehicles on our congested streets.
  • Consumers are generally concerned about the theft of unsecured, released e-commerce shipments outside of their home. The UPL is a totally secured delivery option for the consumer and provides 24/7 access to support recipient pick-up.
  • The consumer can request direct shipment from a merchant to the UPL or redirect shipments to the UPL via carrier delivery apps.
  • Return shipments can be dropped off at the UPL.

The enormous cost of privately developing a UPL network is a problem, and as a result, the parcel carriers have been more inclined to develop retail access point relationships with national retailers. However, this type of retail store-based, consolidated pick-up solution is fraught with problems.

Why is UPL Difficult?

  • Retail access points are limited to the store’s operating hours and do not provide 24/7 consumer access.
  • Shipments holding for pickup at a retail access point are normally not stored in secured venues within the store and in most cases, visible to the public.
  • The consumer must wait in line for the store associate to process their transaction as handling a parcel pick-up is just one of many tasks a store associate must support.
  • Dedicated pack & ship stores offer a superior service experience for the consumer versus access points like Walgreens and CVS. However, you must still interface with a store associate to retrieve your package, which is becoming a less optimal solution for a consumer that prefers a totally automated solution.

Why is USPS the Perfect UPL Solution?

Our US postal service offers the best solution for the development of a national UPL network, for the following reasons:

  1. The USPS already operates nearly 30,000 post office locations that in most cases, could support an outdoor UPL with 24/7 access.
  2. US Post offices are conveniently located and normally fully developed retail venues with consumer-friendly ingress/egress and abundant parking.
  3. The timing is perfect for the USPS to coordinate further development of its GOPOST parcel locker initiative and morph their small, proprietary parcel locker network into a universal parcel locker solution.
  4. The USPS could reduce operating cost and improve the consumer experience by consolidating some of their services via an automated, UPL solution.
  5. It makes sense for UPS, FedEx, Amazon, and the USPS to join forces and share the cost of developing a single, universal parcel locker network. The two mega-carriers, UPS and FedEx, have historically rejected any type of partnership that would comingle operations to reduce operational cost and drive consumer convenience. However, the two carriers recently worked together on developing the Corona Virus distribution solution here in the US. Quite possibly, this joint initiative will open the door to more collaboration, that could lead to the private carriers linking with the USPS, to mutually sponsor the development of a UPL network.

Whatever you call it, Carrier Agnostic, Universal (UPL) or Carrier Neutral, the timing and circumstances are right for the USPS to take the lead in developing the Universal Parcel Locker concept, across America.

About the Author

Contributing editor Dean Maciuba is Managing Partner of Last Mile Experts, an e-commerce last mile CEP consultancy. He advises clients on e-commerce, last mile, and courier express & parcel matters in the US and Canada.

The Drone Delivery Challenge

By | Shipping

It was in February of 2014 that Jeff Bezos announced on 60 minutes that Amazon was developing the technology to support a residential drone delivery solution. Fast forward to 2021, and Amazon is still testing residential delivery via drones, while UPS’s focus is on the business delivery. FedEx is also in the game, but to a lesser extent via a partnership with Wing Aviation.

Drone Delivery Solutions Have Been Slow to Develop

Why aren’t drones used in mainstream logistics and fulfillment? There have been numerous barriers to successfully developing residential drone delivery solutions, with commercial deliveries being easier to implement.

  • Drone technology continues to evolve, and the service providers will be able to take advantage of superior, new technology if they wait for the technology to further develop before they go to market.
  • The commercial and residential deliveries are two very different opportunities and require different solutions.
  • Government regulation continues to slowly advance in support of commercial drone delivery.

Five Specific Factors Affecting Drone Delivery Adoption

Disparate Technologies: No single technology or platform has emerged as dominant, so the various participants are focusing on different technologies and solutions. This is not about refining existing, universally accepted platforms and tech. This is about designing and implementing new technology, which is an arduous process, especially with very few professionals in the space with any kind of serious experience. Moreover, tech advancements have not been able to adequately address the problem of short flight duration, resulting in a limited range for drones.

Residential Delivery Challenges: The consensus has been that rural home delivery should be a natural fit. However, with limited range capability, rural drone deliveries would need to be launched and received from mobile dispatch platforms, close to the address, which means the rural residential delivery is only partially displaced.

Releasing a drone-dropped parcel in immediate proximity to a designated spot, and close to a designated home access point (porch or front door), is also still a challenge.

Furthermore, multi-unit residential complexes and towers would not be suitable for drone delivery.

Business Delivery Opportunites: Drone delivery will simply not work in dense urban environments for obvious reasons. However, hospital and campus-like developments that can designate landing pads should work very well to accommodate drone delivery. This is exactly the focus of UPS’ Flight Forward initiative, which should be successful as health care service providers will likely pay handsomely for immediate delivery of life-sustaining medications and products.

Inclement Weather: Wind, rain, snow, and delivery in ultra-cold temperatures will limit drone delivery operations.

Incongruous Regulations: While slow to develop, we are seeing regulatory changes that support drone delivery. Line-of-sight rule requirements are being relaxed in test markets and must be eliminated, for drone delivery to develop beyond the testing stage.

Very recently, the FAA’s Part 135 certification was a critically important development in support of drone delivery and includes the following relaxed rules:

  • Out of the operator’s line of sight (with appropriate approvals)
  • Over people
  • With cargo weighing more than 55 pounds
  • At night

UPS has already been certified via part 135 for their Flight Forward service, but local municipal ordinances could still restrict drone operations.

If not now, when?

The slow development of drone delivery has further confirmed that designing and implementing new and complex technology takes a long time. However, the question begs: how long is too long?

 

About the author

Contributing editor Dean Maciuba is Managing Partner of Last Mile Experts, an e-commerce last mile CEP consultancy. He advises clients on e-commerce, last mile, and courier express & parcel matters in the US and Canada.

(Q&A) DynoSafe: Open Architecture Platform for Unattended Home Delivery

By | Shipping

The home delivery is the most important component of the e-commerce value proposition and we are starting to see that value proposition challenged via efforts to redirect residential deliveries to retail access points for consumer pick-up.

Personally, I do not want to go to Walmart or Walgreens to pick up my on-line purchase as I prefer to have those items, including groceries and meals, delivered to my house, and securely released if I am not home to accept the delivery.

It is obvious to me that the solution is a personal, residential smart-box (lockbox) that is based upon an open architecture platform that can universally accept and secure, home-delivered parcels, perishable groceries and meals from any carrier or merchant. One such product is DynoSafe.

I have many questions about personal smart boxes that support the released, unattended home delivery and CEO/Founder of DynoSafe, Rebecca Romanucci, has agreed to answer those questions.

Dean Maciuba (DM): Tell us about DynoSafe and how it works?

Rebecca Romanucci, DynoSafe (RR): DynoSafe is an IoT, smart home, temperature-controlled lock-box safe that secures to your home, protecting your deliveries from theft and the elements and from exposure to organisms that can cause illness, such as the virus that causes COVID-19.

DM: You are saying that DynoSafe is also a temperature-controlled personal storage system, correct?

RR: That’s right. When you place an order, you assign a desired temperature for the order. When the delivery is made, it quickly adjusts to that preassigned setting.

DM: So then, is DynoSafe a technology or personal storage solution, or both?

RR: It’s both! DynoSafe is a smart-home IoT device, that is intended to interact with other smart devices, like smartphones, Alexa, and all smart devices. It also can interact with delivery robots, electric AI vehicles, and drones. The locking mechanism, temperature control components, and more are controlled through the app. A person can easily use DynoSafe for personal storage and access control for outgoing and incoming items. Codes can be provided to whoever wishes to make a delivery or pick up an item to be sent out.

DM: How might your average porch pirate feel about DynoSafe?

RR: The idea came about when I mailed $500 of product to a customer. She said she never received it, so of course, I pulled another $500 of product off my shelf and mailed that to her, this time with her signature required at delivery. A week later, one of my nurses received a call from the porch pirate who stole the items off of her porch. I was out over $1,000!

Porch Pirates go for the easy take, like an unattended box exposed on the porch. With DynoSafe, they don’t know if there is something inside or not. DynoSafe also secures to the porch, has a built-in alarm, similar to a car alarm, that will sound if the container is lifted or if the lock is jimmied, and an alert will be sent to the owner’s smart device, warning them. It will not be easy to lift and toss into a car.

 

DM: Have the major parcel carriers agreed to integrate your access technology into their delivery platforms and can smaller, last-mile delivery companies easily integrate with DynoSafe?

RR: At face level, technical integration is not a barrier for utilizing DynoSafe. DynoSafe can be functionally utilized by all major logistics/fulfillment companies without the need to directly integrate. In fact, our testing in Seattle and Scottsdale has revealed 100% success of deliveries by all major carriers, including FedEx, UPS, grocery deliveries, third-party logistics companies, restaurant food deliveries, and more. We have never needed to instruct on how to use DynoSafe. In fact, we have never even used a sign.

However, due to the functionality of our smart device, we will offer integrations that allow even more functionality and convenience for both the provider and customer. Abilities like access to delivery and recovery times, temperature logs, and the ability to pre-cool the device before delivery will all be functions that will available to providers who partner with us.

DM: Are you still in the developmental stages of the solution or are you operating in any countries/markets?

RR: We are in the final steps of software completion and are in discussion with manufacturers and distributors regarding licensing opportunities. We have been approached by non-US countries and recognize the opportunities that DynoSafe will not be limited to one market but will solve the unattended delivery problems in multiple markets such as grocery, pharmacy, restaurant food deliveries, and all e-commerce retail delivery and returns.

DM: Is it the consumer that purchases the DynoSafe solution or do the parcel carriers/e-commerce merchants offer the service?

RR: Our research and relationships with retailers have demonstrated that the grocery industry is currently the market that is most negatively affected by ‘attended delivery’. Grocery delivery logistics are inefficient, forced to accommodate ‘customer-driven’ delivery windows that have excessive fuel, labor, and truck consumption during high-peak traffic time periods. We are rolling DynoSafe out as a B2B model, licensing with manufacturers who will sell white-box DynoSafe to (grocery and other) parcel carriers and e-commerce merchants.

DM: What might a consumer expect to pay for DynoSafe and what if they do not have an electrical outlet close to where they want to place the storage unit?

RR: We are in discussion with manufacturers at this time. The cost per unit will be dependent on the final design and features that the manufacturer chooses to include. The base unit is affordable both to the retailer and the consumer. Most homes constructed after 1960 include an outlet on the porch and installing an outlet is approximately $100-$120.

DM: Consumer purchasing behavior has changed dramatically because of COVID-19.  What will the impact be on DynoSafe and will consumers be less inclined to retrieve their e-commerce shipments at a retail access point?

RR: The pandemic has catapulted e-commerce, years ahead of what was predicted. Online food and beverage sales are now predicted to top $100 billion in 2021 and become $250 billion in a few years. 90% of those who currently order groceries online are expected to continue to do so, even after the pandemic. For now, it appears that customers want a mix of options, shopping in brick mortar stores, ordering online and picking up at the store, and ordering online for delivery at home.

DM: Given the temperature control capabilities of DynoSafe, the perishable products market must be a huge opportunity for DynoSafe?

RR: That’s right. Perishable items have always been more expensive to ship and deliver to customers. Grocers are eager to roll out DynoSafe to have an unattended delivery solution. Currently, grocery deliveries are completed at the grocer’s inconvenience, during high traffic time periods using inefficient logistics, and by placing the bags directly onto the porch, which is far from hygienic, and at the inconvenience of the customer, as they must be home to retrieve it immediately, and they place these bags directly onto their kitchen countertops. Unattended delivery into a DynoSafe can be delivered at the grocer’s convenience, directly inside a sanitary container, protected at the right temperature to be retrieved at the customer’s convenience.

DM: Are there numerous competitors developing their own solutions in support of the unattended delivery?

RR: Actually, the competitive landscape is in its infancy with few participants. DynoSafe is uniquely positioned to support the temperature-controlled, unattended/released home delivery for both perishable and nonperishable products.

About the author

Contributing editor Dean Maciuba is Managing Partner of Last Mile Experts, an e-commerce last mile CEP consultancy. He advises clients on e-commerce, last mile, and courier express & parcel matters in the US and Canada.

Questions to Ask Before Entering a Shipping and Fulfillment Partnership

By | Shipping

Starting your own eCommerce venture is a labor of love. Beginning with conceptualizing and designing products to building a marketing strategy, and finally packing and shipping your products to customers – each step gets you closer to running a successful eCommerce enterprise. As your business expands, there will be lots to do, leaving you with little time to devote to the eCommerce fulfillment process. This is where a fulfillment partner can ease your burden, ensuring you stay on top of the packaging, shipping and delivery service. If you are considering outsourcing the order fulfillment process to a vendor, here are the top questions to ask a shipping company. Also, take a look at what you need to determine yourself before selecting an order fulfillment service provider.

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Fulfillment Center Costs: What Retail Startups Need to Know

By | Shipping

If you are an e-commerce retailer, at some point you may consider enlisting the services of a fulfillment center. Partnering with a fulfillment center has many benefits, but there are a few drawbacks as well. Here we’ll focus on what factors into fulfillment center costs, specifically those that may be prohibitive for a small business looking to expand its e-commerce presence.

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Order Fulfillment: What It Is and Why Getting It Right Is Essential for Your Business

By | Shipping, Supply Chain Management
Order fulfillment includes the entire process of receiving, processing, picking, packing and shipping orders to your customers. Without a good order fulfillment strategy in place, customers may never receive their product, or have the wrong items shipped. When either of these occurs, the likelihood of a customer choosing to continue using your company is slim. Understanding the processes and using them correctly for both in-house and e-commerce order fulfillment will help your business retain customers.

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Things That Could Go Wrong with In-House Fulfillment

By | Shipping, Supply Chain Management
Whether you run a small business or a large corporation, in-house fulfillment mistakes can happen. With the many moving parts that go into storing, packaging and shipping products to your customers, these processes offer plenty of room for error. While most orders ship out correctly, the ones that are delayed or even incorrect can have a major impact on your revenue and brand image, even if it something out of your control. From a traditional warehouse setting to e-commerce fulfillment services, the following mistakes can happen for a number of reasons. The key is knowing how to avoid them and keep your business running smoothly.

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What Should I Look for in a 3PL Provider?

By | Shipping, Supply Chain Management
Finding the right 3PL provider takes a lot of analysis and consideration. There are so many different options that it can be hard to know which one is the best one for your business, or will fulfill your current logistical needs, and can scale into the future. In this article, we cover some things that any online business can use to evaluate 3PL services and decide which one is best for their current fulfillment needs.

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