PARCEL - Weathering the Winter Storms: Finding a Way to Deliver

Type:  Announcements  

 

By: Ted Kauffman, Chairman, Eastern Connection

 

 

 

 

 

 

 

This winter, weather extremes were the norm throughout the country—but no area was hit harder than the Northeast, where areas like eastern Massachusetts recorded epic amounts of snow and frigid temperatures. In the wake of these storms, companies lost billions of dollars, millions of shipments were delayed, countless parcels were damaged, and countless customers were disappointed. Yes, spring is almost here, but that doesn’t mean an end to nasty storms. In fact, year-round, the weather presents various challenges for shippers, and there are certainly lessons to be learned from our experience the last couple of months.

 

The overall takeaway of this experience for shippers? If you rely on the duopoly of UPS and FedEx, you are limiting your options and chances for deliveries that are on-time, intact, and on the money.

 

Consider the following:

 

  • Ground vs. air transport. Customers that were expecting timely shipments via air flight were at a loss when storms caused airports to shut down. On the other hand, the regionals, which utilize ground service, were basically on the job around-the-clock.

Tip to shippers: Whenever possible, insist on next-day or second-day ground service, a reliable and cost-effective alternative.

 

  • Damage. Ground transport is generally more efficient than air since there are fewer points of exchange and less margin for error.

Tip to shippers: Ask your carrier to share information about their claims for damaged, lost, or stolen packages. Note that the dollar value of claims is expressed as a percentage of the carrier’s total revenue, with an average industry average of .50%.*

 

  • Driver safety. Tied to the above, safe driving standards are obviously important as well, with extenuating risks in the snow and ice.

Tip to shippers: Ask your carrier about its safe driving training programs and track record.**

 

  • Personalization. What about packages left outside and subject to the elements?

Tip to shippers: Ask if your carrier provides an “over the threshold” service that allows drivers to enter offices and homes with precious cargo.

 

  • Cost factors. What happens when weather-related circumstances cause carriers to incur extra costs? Well, consider what happened to UPS during the last two Christmas seasons. In 2013, more than one million of the carrier’s express packages arrived late. Trying to avoid a similar fate the next year, UPS significantly increased its manpower and fleet rentals, which cost them $200 million more than expected. The upshot was declining earnings…and higher charges passed along to customers.

Tip to shippers: Be leery of seasonal price adjustments, don’t be afraid to negotiate your contracts, and be sure you understand the small print on accessorial charges, DIM costs, and contingencies.

 

Overall, when it comes to dealing with the duopoly, you need to perform your due diligence. Compare how the giants and regionals measure up in the snow and in any conditions throughout the year. This may well help you weather the storms and protect your bottom line.

 

*Eastern Connection’s damages are 1 per 14,500 pieces, or less than .0007%.

**No Eastern Connection vehicles were involved in accidents this winter.