"We're just doing what we can to bring a little red, white and blue into a Big Brown world." So says Parcel Connections' President Stephen Donovan about his company's successful partnership with the United States Postal Service in a burgeoning niche market.
Currently, most large parcel consolidators require shipments of 500 packages or more per day from corporate customers. This large volume qualification eliminates many potential corporate clients. "For many businesses, shipping 20 to 50 packages a day is more realistic," notes Stephen Foster, U.S. Postal Service account manager for Parcel Connections. "Parcel Connections essentially handles the smaller volumes and integrates with the larger consolidators for the best price."
Parcel Connections evolved from a logistics management company and joined the Postal Service nearly five years ago, after helping a client save approximately $80,000 on 65,000 packages by shipping them through the U.S. Postal Service.
Now, working with the Postal Service through its Parcel Select program, the Hopkinton, Massachusetts-based mini-consolidator offers smaller shippers many advantages over the competition. "We found that customers in the Brown (UPS) and FedEx world were looking for an alternative to high prices and minimal customer service," explains Donovan. "We are able to offer a reliable parcel transportation service with great customer assistance and competitive pricing through the U.S. Postal Service."
One of the most popular benefits of the program is the online tracking and delivery confirmation feature. "Unlike the competition, all of the packages we move have a confirmation upon delivery," states Donovan. He reports one very satisfied customer, an infomercial company, was able to eliminate 90% of its credit card fraud issues because of the door-to-door tracking capabilities.
Other specific solutions for B2C shippers include shipping manifest software, which enables shippers to print out barcodes and labels so that packages may be processed correctly. A new Web-based shipping system is also being introduced this year, which will allow customers to process packages from their own PCs. According to Donovan, it's another way to streamline the process while keeping costs down at the same time.
"If a system misfires, we normally have to go on site and fix it," he says. "With the Web, we'll be able to make adjustments from our home base, which saves everyone money."
All parcels shipped by Parcel Connections through the Parcel Select program are automatically insured, providing another unique and welcome benefit. "The post office agreed to do this, even though it has zero liability with packages," notes Donovan. "Now we include insurance up to $100 per package."
Donovan says Parcel Connections welcomes APO/FPO addresses, and delivering to post office boxes is not a problem. In addition, deliveries to Puerto Rico, the Virgin Islands and all US territories can be made at ground rates. Saturday deliveries are also a standard part of the service.
Transit times vary from two to three days (within the New England region) to five to seven days to the West Coast and approximately four to six days to regions in between. While Donovan admits the delivery may be slower than some of its competitors, he says the discount pricing (shippers can usually save between 10% to 20%) and the ability to provide "in-transit visibility" via Parcel Connections' state-of-the art online tracking page make up for the slight lag.
And how about that customer service? Custom work is evidently an important part of this niche market. "We will batch print labels in order to be compliant with the Parcel Select program," he explains. "This has been helpful to shippers who have monthly or one time projects."
Donovan sites Flying Noodle Inc., an online gourmet pasta retailer, as a perfect example. "The company has a Pasta Club shipment going out each month," he says. "It e-mails us its addresses, and we pick up the cases of pasta at its distribution center. Back at our sort center, we batch print the labels for it, sort and ship them all out."
Another client ships packages daily. The parcels include only barcodes containing the order number. Address files are e-mailed to Parcel Connections. When the packages come into the sort center, the barcodes are scanned, and the U.S. Postal Service-compliant shipping label is printed. "The packages are sent, and we send back-tracking and billing information. It's a win-win," says Donovan.
While Parcel Connections is currently operating in a small corner of the parcel consolidating world, its boundaries are about to get bigger.
"We would love to expand," exclaims Donovan. "In fact, we're growing all the time." Besides launching its new Web-based shipping system, the expansion has included offering other new services such as the Featherweight Program. Targeted for customers whose packages weigh from six to 16 ounces, the service is ideal for shipping items such as annual reports, DVDs, CDs, audiocassettes and videos or any general merchandise weighing under one pound.
On the upper end of the scale, Parcel Connections also offers services for customers wanting to ship bound printed materials weighing one to 15 pounds, such as directories, manuals, catalogs and books. All the same benefits such as insurance, labeling and tracking apply to these programs as well.
"Parcel Connections is a pioneer in this market," says Foster. "It has actually worked out a lot of bugs that were prevalent in this type of niche market. If it can duplicate its method, it can definitely spread to the rest of the country."
According to Foster, the postal rate hike that goes into effect June 30 may actually help Parcel Select customers. "With other rates going up, it could mean the Parcel Select rates will go down! It could be more efficient for some customers to use Parcel Select after June 30," he explains.
Meanwhile, the successful partnership between Parcel Connections and the U.S. Postal Service remains strong and continues to develop. "We found that people are looking for an alternative," says Donovan. "Our goal is to sell the U.S. Postal Service's image as a reliable, economical way to deliver packages."
"Some people still think of the Postal Service's parcel delivery as 'Fourth-Class Mail,' " he continues. "It had the reputation of being slower. Of course, today's Parcel Select service is much more efficient and much faster."
Indeed, millions of parcels are currently shipped through the Parcel Select program each month, thanks in part to the Parcel Connections affiliation.
"People will try us once," argues Donovan. "If we're successful, we have them for life. If not, they go back to the competition."
Nevertheless, in the U.S. Postal Service/Parcel Connections' corner of the package-shipping world, a dash of competitive color continues to be a nice contrast to Brown.