The June 30, 2002 postal rate increase has created a very promising and lucrative market opportunity for parcel consolidators and transportation companies nationwide. The industry is expanding at breakneck speed to take advantage of higher postal rates for some services and more stable rates in others. This widened rate gap, coupled with relatively expensive residential delivery rates by parcel giants UPS and FedEx, provides companies with new market opportunities that can meet a large shipper's need to efficiently and economically get its consumer products to its customers. Nationally, there are just a few companies that pick up, sort and transport packages across the
The stage is set for win-win relationships for shippers and parcel consolidation companies nationwide, but a win-win situation is sometimes really hard to find unless a consolidator is willing to really work hard for its customers' business. You might think that it happens everywhere; surprisingly enough however, true win wins are sometimes still very scarce.
It is important that consolidators develop their networks around the specific needs of each individual customer. The premise is really very simple: perform a service that meets the customer's requirements and exceeds its expectations. The key is to be content with just enough margins to expand, solidify and grow the business.
A company really has to work hard to accomplish such a broad undertaking for its customers. Many regional consolidators develop networks around providing delivery to only specific five-digit ZIP Codes that work for them. This limitation is a win only for the consolidator and not always a win for the shipper. Other consolidators provide deliveries to larger geographic areas but require shippers to drop into multiple facilities to achieve discounts for transportation and delivery once again, a win for the consolidator and not always a win for the shipper. Still others develop complicated rate structures to serve a shipper so profitability can be achieved on every package instead of looking at the overall picture to find sufficient profitability. Again, a win for the consolidator and not always a win for the shipper.
Consolidators should focus on meeting the needs of all customers every time. It is important to focus on a customer's total shipping volume and what can be done for all of it, not always just what provides a win for the company. It is equally important to provide a win for the shipper! No company can be successful without customers, so the key to success is the success of your customers. Develop a shipping solution centered on shipper requirements and a win for them not just what you want!
When is enough really enough? When the consolidator and the shipper both win in the business relationship. And that means when a consolidator actually does what it professes to do and provides specific pricing for a customer based on the individual needs of that customer. It also requires pricing that doesn't impose an unfair burden on the small- to medium-sized shipper because those are the ones that are providing the necessary margins to give the largest shippers discounts at a loss.
Enough is really enough when everyone wins. That's the way a company should work.
John Fluty is the vice president of Sales for DDU Express. For more information, visit www.dduexpress.com.
