It's an age-old debate: National versus regional express parcel services versus the U.S. Postal Service. Through the years, corporate America has started to appreciate that bigger isn't necessarily better when it comes to shipping its parcels and documents. But even as the Davids have seized market share from the Goliaths, many shippers have continued to make knee-jerk decisions and stick with the giant carriers.
For shippers that were reluctant to diversify their delivery options, a wake-up call came on August 4, 1997, when the UPS strike brought millions of packages to a grinding halt. Four years later, on September 11, 2001, the sense of national emergency took on a whole new meaning to the country, and once again, the shipping industry couldn't rely on air transportation.
Of all the distribution channels, the US mail may have been hit the hardest post-9/11, with delays, tracing problems, bioterrorism scares and losses exceeding $50 million. Today, although tempered, postal paranoia continues, with many mail centers adopting enhanced scrutiny measures and still discarding unsolicited mail.
Even before the UPS strike and 9/11, an increasing number of shippers considered the option of regional overnight services because of the greater flexibility and cost savings. In most cases, regional services offer 24/7 service 365 days a year; they also typically guarantee 9:00 AM next-day deliveries to metro areas at no extra cost. In contrast, most of the national giants deliver at 10:30 AM the next day, unless shippers pay an additional surcharge for earlier delivery.
The Quest for Quality
The age-old benefits of flexibility and cost effectiveness still apply today, but even more important criteria to shippers are safety, efficiency and reliability. Ironically, the perception is that the nationals, with their pervasive brand-name aware-ness, provide superior quality control. But reality reveals a different story, one that has even more significance today as security concerns persist in this new age of terrorism.
Today, many months after the terrorist attacks, Next Flight Out delays continue, couriers often still find it difficult to navigate around airports and there is lingering anxiety about mixing passengers and packages. In this environment, regional carriers, which specialize in ground transportation, provide generally more reliable service. In fact, with fewer exchange points, ground transportation is more efficient than air even in "the best of times."
Regional ground services are also more reliable than the national giants during emergencies like strikes (since work stoppages are much less likely with regional carriers) and winter storms (when airports may be forced to close). For example, in the days immediately following September 11, when flights were cancelled, regional carriers were able to ship vitally needed blood and antibiotics to Ground Zero.
A fair question among shippers is, "How do you measure quality?" To see how your carrier stacks up, it may be useful to look at industry data and benchmarks related to on-time and intact deliveries as well as carrier safety performance.
On time Determine your service's on-time track record and compare that to the industry average of 96%. Be sure to ask how the number is derived does it apply to the standard 10:30 AM delivery time or anytime the next day? And keep in mind that regional services have a higher standard to uphold with a 9:00 AM delivery time.
Intact You can measure intact deliveries based on the amount of damaged, lost or stolen parcels that result in claims against your carrier. Compare the amount of yearly BOLs to the number of claims customers file. Ask for the dollar value of the claim based on a percentage of the company's revenue. The industry average is 50% (much less favorable than that of leading regional services).
Safety performance Ask your carrier about its "modification factor," which reflects the number and cost of worker compensation accidents. The industry average is one percent, and once again, the regionals generally come out on top.
Another key criterion for selecting a carrier is personalized service. With regional services, it is comforting to know you can count on one particular customer service representative rather than one of hundreds of representatives who may take your call at a national carrier. And today, when it's critical to know the origin of shipments, the regional advantage is even more pronounced.
Rating the Regionals
If you put your carrier to the test, you'll see that the leading regional services provide decided advantages over their national counterparts. But not all regionals are the same, so it makes sense to apply additional benchmarks to identify the regional carrier that best meets your needs. For example, does your regional service provide the following:
Drop shipping This allows national companies to transport parcels from one region to another and still reap the advantages of "one zone, one price."
Same-day service This includes on-demand messenger service and Next Flight Out options.
Facilities management Personnel provided to help sort your mail on site.
Online package ordering and tracking Check company Web site for details.
Professional, courteous drivers Couriers should have visible identification.
Specialized medical supply service Special procedures for delivering medical supplies and blood work, as needed.
In the final analysis, you'll find that no one service is likely to satisfy all of your shipping needs. Certainly, regional carriers will never replace the national giants; rather, you should determine how your David could complement your Goliath. It's all part of having a diversified portfolio that will result in greater efficiency, greater savings (time and money) and more customization. So do your homework. Put your carrier to the test. Because today more than ever, it's good to have options when it comes to delivering the goods.
Jim Berluti is president and CEO of Eastern Connection. For more information, please call 800-877-4745 or visit www.ecdelivers.com.