PARCEL
MAY-JUNE 2016
www.PARCELindustry.com
CONFUSED ABOUT CROSS-BORDER TRADE? HERE’S A CRASH COURSE. P.24
GLOBAL ADDRESS DATA QUALITY: TRUST, BUT VERIFY. P.28
THE OPTIMAL WAY TO STREAMLINE YOUR FULFILLMENT OPERATIONS. P.30
REGIONAL CARRIERS: A VALUABLE PARTNERSHIP HIDING IN PLAIN SIGHT. P.12
CONTENTS MAY-JUNE 2016 | volume 23 | issue 3
Features
Departments 06 Editor’s Note
Tackling Cross-Border Trade By Amanda Armendariz
07 Ship Right
Multi-Carrier Competence: The New Shipping Essential
By Chris Giles
08 Spend Perspectives
The APAC Small Parcel Market: Opportunities and Challenges By John Haber
12 Special Regional Carrier Section
Get to know some of the leading players in this industry.
09 Operational Efficiencies “Decisioning” Process Critical for Success
By Susan Rider
10 Supply Chain Success FedEx’s Solution to Managing E-Commerce
By Elijah Moon
33 PARCEL Counsel
Who Can See The Data? And Who Owns The Data?
24 Cross-Border 101: A Primer 28 Global Address Quality There are differences between shipping internationally and cross-border trade; here’s a rundown of what’s what.
You’ve heard the old adage: trust, but verify. Rarely does this hold more true than it does in the international shipping arena.
By Krishna Iyer
By Sheila Donovan
30 Optimizing Your
Fulfillment Operations
Every organization has something that they could be doing better. If you’re looking for ways to excel in fulfillment, here are some tips and tricks. By Jim McLafferty
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By Brent Wm. Primus, JD
34 Wrap Up
Summer Thoughts By Michael J. Ryan
president chad griepentrog publisher ken waddell editor amanda armendariz [ amanda.c@rbpub.com ]
editorial director allison lloyd [ allison.l@rbpub.com ]
audience development manager rachel chapman [ rachel@rbpub.com ]
marketing cierra bauer creative director kelli cooke advertising ken waddell (o) 608.442.5064 (m) 608.235.2212 [ ken.w@rbpub.com ]
PARCEL PARCEL (ISSN 1081-4035) is published 6 times a year by RB Publishing Inc. All material in this magazine is copyrighted 2016 Š by RB Publishing Inc. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to PARCEL, RB Publishing Inc. or its staff becomes the property of RB Publishing, Inc. The articles in this magazine represent the views of the authors and not those of RB Publishing Inc. or PARCEL. RB Publishing Inc. and/or PARCEL expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine. SUBSCRIPTIONS: Free to qualified recipients: $12 per year to all others in the United States. Subscription rate for Canada or Mexico is $35 for one year and for elsewhere outside of the United States is $55. Back-issue rate is $5. Send subscriptions or change of address to: PARCEL, P.O. Box 259098 Madison WI 53725-9098 Allow six weeks for new subscriptions or address changes. REPRINTS: For high-quality reprints, please contact our exclusive reprint provider, ReprintPros, 949.702.5390, www.ReprintPros.com. 2901 International Lane Madison WI 53704-3128 p: 608-241-8777 f: 608-241-8666 www.PARCELindustry.com
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EDITOR’S NOTE BY AMANDA ARMENDARIZ
Tackling Cross-Border Trade Are you signed up for our e-newsletter? t’s often difficult to keep up with the ever-changing world of the small shipment industry, and the international arena is no exception. If anything, international trade is even harder to stay on top of, since each country has its own rules, regulations, customs, and taxes. There’s no doubt that international shipping is overwhelming, but there’s also no doubt that it is here to stay. With our ever-increasing interconnectedness, the world is getting smaller and smaller, at least from an e-commerce perspective. In fact, I’m always surprised now when I meet a shipper who doesn’t, in some way, deal with international trade. But just because it’s a growing movement, doesn’t mean it’s easily understood. So we’ve provided a great primer on cross-border trade, so you can learn what it is and how exactly it differs from plain old international shipping (as if that term can really be used to describe anything international!) Check it out on page 24, and you’ll be able to rest easier knowing your shipments are traveling the globe in the most cost-effective, efficient way possible. And remember, discussions on pressing topics like these are par for the course at our annual PARCEL Forum. The conference is a fantastic way to meet with other logistics professionals and network; these connections often lead to brainstorming and, subsequently, the implementation of ideas that one might not have come up with on one’s own. So if you haven’t already registered, visit www.PARCELForum.com for more information. I look forward to discussing your forays into the international arena — and other logistical challenges you’re experiencing! — at this year’s show in Dallas, Texas. As always, thanks for reading PARCEL.
If not, what are you waiting for? As of press time, these were some of our most popular articles from recent e-newsletters: • Additional Charges Coming for FedEx Shippers
• UPS to Follow FedEx’s Plans to Reduce the Maximum Length for the Additional Handling Fee • On-Time Performance (Not-so) Well-Done To get great articles like these emailed to you on a regular basis, just scan the QR code above or go to www.PARCELindustry.com/enews.
Thursday’s Tip
Have you signed up for our Thursday’s Tip feature yet? If not, you’re missing out on some great information emailed to you every week! Don’t worry, we know you’re busy, so these tips are brief and easy to read — but yet much-needed information for any transportation professional! All you need to do is sign up for our e-newsletter and you’ll get this information emailed to you the third Thursday of the month (plus an occasional extra one when we have some pressing news!).
CONNECT WITH US FOLLOW @ PARCELmedia Join PARCEL Magazine Group
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SHIP RIGHT BY CHRIS GILES
Multi-Carrier Competence: The New Shipping Essential here was a time when organizations could get by with one or two shipping options. That’s not the case today. Not only are you shipping more, you’re paying more for each piece. Rates from traditional carriers rose from five percent to 10% this year. Plus, shippers are increasingly being asked to absorb this increase. In some industries, customers may even expect you to pick up the full cost of shipping. Now, more than ever, organizations need a smart, well-coordinated multi-carrier strategy. Regional carriers can play an important role. While UPS, FedEx, and the United States Postal Service are often the default go-to carriers, regional carriers may provide you with options for better service or pricing in a particular geography. Some carriers co-mingle parcels and induct them directly into USPS destination facilities, which could lead to faster delivery and better tracking. You may be able to add greater flexibility to your shipping options, with more affordable next-day shipping. Others can help you introduce incentives, such as flat-rate shipping or free pick-up. In some cases, you could reduce your cost-per-parcel by as much as 40%. Regional carriers, however, are not a cure-all. While all offer some advantages, there are many instances where the “big three” will perform better (and at lower costs). In order to increase profits and satisfy customers, you need to get better at managing multiple carriers.
THE FIVE ESSENTIALS FOR MULTI-CARRIER SUCCESS Each carrier you add increases the complexity of your shipping operations. In order to excel in a multi-carrier environment, focus on building five core competencies: 01. Instant rate shopping Success starts with your ability to calculate an exact cost. You’ll want to compare rates instantly, taking into consideration any fees or surcharges, so you can identify the best shipping option across all carriers. 02. Rules-based selection Price is not the only factor. What level of service is required? Ground, 2-day, nextday, same-day? With the right system, you can set well-defined rules that dictate what level of service is appropriate for each shipment. You can even customize these rules based for specific users, departments, clients, or use-cases, so your shipping costs are always aligned with value. 03. Simplified processing Each carrier has their own forms, rules, and requirements. Today, this can all be automated. Look for ways to generate labels and process parcels across multiple carriers, adding accuracy and efficiency at every step. 04. Total visibility No one has time to toggle between different websites. With the right technology, you can view all of your shipments in one place, giving you the power to manage and track across multiple carriers.
formed at every step. Automated emails and client-portals can help keep customers in the loop, while reducing the number of phone calls you receive. Once you have the ability to manage multiple carriers, you need to carefully assess which ones will add value to your business. Not all regional carriers are the same. Ask for details about their rates, fees, geographic reach, customer experience, and service levels. Dig deep to find out whether they are a serious player in the parcel shipping space. Technology can be a good indicator. When making a selection, look for: } Strong transportation infrastructure } Well-defined security and tracking procedures } High level of automation } Ability to rapidly respond to increase in volumes } End-to-end track and trace } Full visibility throughout the process The right mix of carriers can provide several advantages when it comes to shipping. In addition to the big national players, you should establish a relationship with one or more regional carrier in order to satisfy customers in ways your competitors can’t. Before moving ahead, however, you should first assess your ability to manage multiple carriers. In today’s world, it takes a smart, coordinated strategy to succeed. ¾
CHRIS GILES is Vice President, Business Development, Global Product Management, Pitney Bowes.
05. Built-in communication Lastly, you’ll want to keep customers inMAY-JUNE 2016 | www.PARCELindustry.com
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SPEND PERSPECTIVES BY JOHN HABER
The APAC Small Parcel Market: Opportunities and Challenges sia-Pacific has long been a major destination for multi-national businesses as supply chains have globalized and demand from Western countries for Asian exports has increased. As the region shifts from an export-dependent economy to one that is consumer-driven, logistics dynamics have changed. What was once an international supply chain dominated by air and ocean freight providers has evolved into a regional supply chain driven by e-commerce and influenced by domestic express and small parcel providers. Unlike the US, the Asia-Pac market is a fragmented and immature market struggling to keep up with huge demand. As a result, many retailers and e-commerce providers have established their own logistics solutions. According to market research company, eMarketer, a rising middle class in China, India, and Indonesia combined with a rapid adoption of mobile devices has resulted in a boom in e-commerce spending. Retail e-commerce spend in Asia-Pacific is estimated at $877.6 billion in 2015, up 35.7% from 2014, making the region the largest digital retail market in the world with 52.5% of the total global market. Despite the rise in online spending, Asia-Pacific’s domestic supply chain is underdeveloped compared to its export supply chain. Some of the challenges being faced are inadequate warehousing, a fragmented delivery market lacking in technology, competition based solely on rates, and poor customer service and service levels. As a result, logistics is viewed as a differentiator for businesses and for 8
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many e-retailers such as JD.com, Rakuten, and Flipkart, where logistics practices are kept in-house. E-tailers JD.com and Flipkart have created such successful logistics subsidiaries that they are now providing delivery and warehousing services to other businesses. Meanwhile, the largest e-commerce provider, Alibaba, has opted to establish a subsidiary in which logistics providers such as SF Express and YTO Express are considered partners and therefore operate as separate entities. The subsidiary, Cainiao, is approximately 40% owned by Alibaba and includes a very robust technology network. Consumers are able to track parcels as well as pick and rate delivery partners. The ability to access key data, analyze it, and implement service enhancements based on such analysis rivals Amazon’s own web services here in the US. Even though Amazon has been remarkably successful in the United States and Europe, its presence in Asia-Pacific is muted in comparison. Amazon has less than five percent market share in China’s market, where Alibaba dominates with 80% market share. Amazon is investing heavily in India. India’s domestic parcel market is crowded as government eases regulatory requirements for foreign entrants. DHL, Gati, DTDC along with Flipkart, Snapdeal, and more are all vying for a piece of the India small parcel market by building out networks and warehouses. Asia-Pac is also an appealing market for FedEx and UPS. Despite obtaining licenses to operate in defined local Chinese markets as well as in other Asian domestic markets, FedEx and UPS have placed more emphasis in serving their multi-national customers. With acquisitions of cross-border specialty businesses by both
companies, additional opportunities in Asia-Pacific’s domestic small parcel market exist for FedEx and UPS. Expanding cross-border solutions is high on many providers’ strategic priorities. For example, Alibaba acquired a 14.5% stake in Singapore Post, an innovative postal operator that has reinvented itself by focusing on e-commerce small parcel solutions in Southeast Asia. It is also establishing a partnership with struggling Australia Post to link Chinese consumers and businesses to those of Australia. Another example is Japan Post, which is expanding its cross-border reach by partnering with retailers such as FamilyMart and online auction provider eBay. In addition, the Japanese government issued an IPO for Japan Post last fall and in early 2015, the post office acquired Australian 3PL, Toll Holdings. The IPO and acquisition of a major global 3PL could see Japan Post expanding its global reach further. Asia’s logistics market is ripe with opportunities but is also one in which domestic providers dominate in a heavily fragmented market. Often described as the “wild west,” Asia-Pacific is undergoing domestic infrastructure improvements to benefit the growing needs of consumers. While many businesses opt to keep logistics in-house, multi-national retailers wishing to expand into the region are partnering with e-commerce providers Alibaba, JD.com, Rakuten, or postal provider Singapore Post to sell their goods to the Asian consumer. ¾
JOHN HABER is the Founder and CEO of Spend Management Experts. Contact John at solutions@ spendmgmt.com.
OPERATIONAL EFFICIENCIES BY SUSAN RIDER
“Decisioning” Process Critical for Success new buzzword for leaders and managers is “decisioning.” Some may call it making a choice or discerning the best outcome, but whatever you call it, the process is critical. Unfortunately, decisioning, whether in business or life, is not taught in school. In the supply chain world, it is common to see issues and even fiascos because the wrong decision was made on a partner, equipment, software, team, etc. Therefore, it is critical that you go through a proper “decisioning process” before discerning what steps you take on large projects. Reviewing the process and referring back to the initial criteria developed for the decision avoids impulse or emotional buying. The process below will work for identifying partners, equipment, or software. Decisioning Process Suggestions 1. The first thing you need to do is document the scope of the project, the objective of the project, the return on investment desired, and the budget. 2. Develop a selection criteria. Once you have the criteria that is important to you, prioritize the criteria and give it some weighting. This is very important at this stage but becomes even more important at the end when a decision must be made. Usually, by then, an emotional decision is taking over. Make sure you go back to your initial selection criteria and confirm your decision is in sync with this criteria. Some criteria may be functionality, design specifications, integrity, customer service, finan-
cial viability of company, reputation, or best product, just to name a few. 3. Develop a time frame to get your proposed list of vendors and their pricing done, followed by a selection of your partner. Be realistic! One of the biggest issues in projects affecting the supply chain is people trying to do a six-month project in two. Do not try, unless positively necessary, to cram in a project right before peak season. 4. Do your research. Develop a list of possible vendors. Look at industry reports, analysts, etc. to confirm your list is a strong one. 5. Send out a Request for Information. You will need to give a definition of scope if you desire to have some budgetary numbers returned. Pricing on services contracts should be included. 6. Compare your results with the criteria you developed for decisioning. You may require additional information to be able to make a decision. Try to get the information as apples to apples as possible. 7. Talk to industry peers and industry SME (subject matter experts) find out what you can about each vendor. 8. Make sure all vendors have your vertical expertise. If they don’t, make sure they have done similar operational flows at customers’ sites. See for your own eyes those sites and question not just the executive, but the actual users of the product. 9. Create a scorecard and compare to your selection criteria. Weight the priorities that are important to you and downsize your list. 10.Once you have seen the product, review the plans and process of each vendor, along with pricing. If there is no clear winner based on your criteria,
you may have to go back to the drawing board. Don’t be afraid to call back in someone that didn’t meet the short list. Some- times the best solution may be someone that is not as “sales pretty.” Selecting a vendor is much like a beauty contest. They are putting their best foot forward and only telling and sharing the good stuff. It’s up to you to unearth the “real truth” about each vendor. The time has come to select the right partner for your future. Your decisioning plan has been in place, but many times at this stage, buyers tend to get emotional and want to make an emotional decision. Recently when I asked a company how they selected a company for their project, the manager said, “We just went with the biggest company in the space. No one ever got fired for selecting IBM.” This isn’t your grandfather’s supply chain; you need better decisioning than this old adage. Lastly, when the product, service, or software is coming up for renewal, don’t automatically renew. YOU are not captive and have the option of selecting something else. Many people are really not happy with current suppliers but continue renewing the service because they feel they are stuck or it’s too much trouble to switch. Crazy, right? If you are experiencing poor customer service or it takes too long to get items fixed, it’s critical in this fast-paced world that you find a supplier where YOU are valued and the customer service reflects your value to the supplier. ¾
SUSAN RIDER, Supply Chain Consultant, Executive/ Life Coach can be reached at susanrider@msn.com. MAY-JUNE 2016 | www.PARCELindustry.com
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SUPPLY CHAIN SUCCESS BY ELIJAH MOON
FedEx’s Solution to Managing E-Commerce hippers already pay enough in General Rate Increase (GRI) cost, but will they have to pay more? E-commerce volumes have increased exponentially over the past several years, and it could start getting costly for shippers. Parcel giant FedEx has made investments in its ground network to better manage the demands of e-commerce and, in an effort to expand its global and e-commerce portfolio, has acquired Bongo International, GENCO, and TNT Express. So what does this mean for shippers? Well, it’s good and bad. The good news is shippers can take advantage of FedEx’s new capabilities which, largely due to the GENCO acquisition, will support their online shipping returns and reverse logistics models. The bad news is FedEx plans to pass on the cost of these investments to shippers through higher GRIs. Chairman and CEO of FedEx, Fred Smith, acknowledges in FedEx’s 2015 annual report that “. . . we took action to ensure we’re more adequately compensated for the high-quality services we provide customers.” Part of that action includes increasing the rates on accessorial charges, especially those related to large packages. It’s no secret by now that parcel carriers are passionate about limiting large items in their networks, or at least ensuring that the associated revenues more than offset the cost. Consequently, it should come as no surprise that, as FedEx continues to expand in the e-commerce space, 10
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shippers with large packages will take on much of the cost. Each year when FedEx announces its average GRI, the increase to accessorial charges are not being factored; the pricing for these charges can be adjusted throughout the year, and most tend to increase between four and 17%. Accessorial charges pertaining to large packages, however, take a much higher increase. When FedEx applied the 2015 dimensional pricing logic across all shipments, it marked the first step in addressing its large package problem. Since then, it has followed up with more pricing changes at advantageous times. On November 2, 2015, right before peak season, FedEx increased the cost of its unauthorized oversize charges from $57.50 to $110; that is a 91% cost increase, and is one of the largest surcharge increases we’ve seen. On March 16, 2016, FedEx Executive Vice President, Mike Glenn, outlined changes to the additional handling surcharge. As it currently stands, additional handling applies to packages with a length greater than 60 inches, but effective June 1, 2016, that threshold will be reduced to 48 inches. Additional handling currently costs $10.50 per package. FedEx also believes that the U.S. Postal Service (USPS) will have to increase its rates in order to support future e-commerce volumes. FedEx and UPS both work with USPS in its SmartPost and SurePost delivery options. By utilizing USPS to make the final stop, the national carriers are able to increase profitability from very expensive, low density-per-stop residential deliveries. When FedEx prices its SmartPost service, it includes the negotiated rate between FedEx and USPS. FedEx alludes that as e-commerce vol-
umes increase, the negotiated rates between the parties will increase, thus the SmartPost rates will increase. According to FedEx’s 2015 annual report, operating income on ground actually increased by $151M from 2014, but overall operating margins have slowly decreased since 2013. FEDEX ANNUAL GROUND FINANCIALS TOTAL REVENUES
2015 $12,984
2014 $11,617
2013 $10,578
TOTAL EXPENSES
($10,812) ($9,596)
($8,719)
OPERATING IN-COME $2,172
$2,021
$1,859
OPERATING MARGIN 16.7%
17.4%
17.6%
(dollars in millions)
The integration cost and asset debts with the GENCO acquisition are expected to put ground operating margins even lower in 2016; FedEx is trying to minimize this damage through GRIs, and large package shippers should be warned. The decline in ground’s operating margin may be giving FedEx a reason to justify a higher GRI, but with its e-commerce expansion, existing GRI, and record low fuel prices, FedEx stands to make another billion dollars this year without digging further in shippers’ pockets.
ELIJAH MOON is a Transportation Analyst with the Transportation Solutions Consulting Group at enVista. Elijah is responsible for identifying and measuring key transportation opportunities that allow clients to optimize cost for domestic and international shipping. He has extensive knowledge of carrier agreements, data collection, modeling tools, and route planning that allow clients to reduce cost and maximize carrier performance.
SPECIAL REGIONAL CARRIER SECTION Regional carriers are important players in the parcel industry. Nobody disputes the fact that the Big Two (UPS and FedEx) hold that title for a reason; they have the network capacity and the manpower to deliver just about any package to any recipient. But, many shippers fall into the trap of only using the Big Two for their shipping needs. And, hey, on the surface, I get it; it seems easier to handle just one carrier contract negotiation, monitor just one account, etc. But what shippers who adopt this mindset are missing is the fact that regional carriers are uniquely poised to better deliver a substantial portion of shippers’ packages, especially when those packages tend to be distributed throughout one specific geographic region. So why aren’t more shippers embracing the regional carrier partnership? Well, more and more do every year, of course, but I suspect the hesitation from others lies in the fact that some logistics pros think it’s either/or: “Either we use UPS/FedEx, or we use regional carriers.” And nothing could be further from the truth. UPS and FedEx do — and will continue to — deliver exceptional service to shippers. But for those shipments that could be better served by regional carriers, it pays to explore this valuable partnership that is, often, hidden in plain sight.
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Dicom
Lasership
PITT OHIO
OH, WV, PA, MD, DE, NJ, CT, RI, MA, NY, VT, NH, ME and parts of MI, IN and KY
AL, CT, DE, FL, GA, IN, KY, ME, MD, MA, MI, NH, NJ, NY, NC, OH, PA, RI, SC, VT, VA, WV, and Washington DC
CT, MD, MA, MN, NJ, OH, PA, RI, WV, WI and parts of IN, IL and MI
GSO LSO
CA, NV, AZ and NM
TX, OK, LA, AR, TN and AL
International Bridge HI, AK, PR and US territories including American Samoa Guam, Northern Mariana Islands, Virgin Islands Federated States of Micronesia, Marshall Islands and Palau
OnTrac
United Delivery IA, IL, IN, MI, MN and WI
US Cargo OH, WV, and parts of IN, PA and KY
CA, AZ, NV, OR, WA, UT, CO and ID
IOWA
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COMPANY PROFILE
Providing Overnight Delivery Since 1995 CA, AZ, NV and NM In business since 1995, GSO is a regional carrier offering Priority Overnight, Next-Day Ground parcel and LTL service throughout California, Nevada, Arizona, and New Mexico. By focusing on a specific geographic footprint, GSO can provide its customers with the flexibility, convenience, cost savings and customer service that other carriers can’t match. Our Next-Day Ground service delivers packages overnight across a vast geography that the global carriers would take multiple days to deliver. GSO Freight, with its straightforward per-pallet pricing model and next-day delivery, has simplified the LTL shipping process by eliminating the complicated shipping routines that come with using a traditional freight vendor. And for customers who need Priority Overnight delivery service, GSO Priority offers shippers later pickup times, Saturday delivery, and cost savings of 40% when compared to the global carriers. With Priority, Ground, and Freight service, GSO can accommodate the shipping needs of thousands of companies across a variety of industries, while focusing on unsurpassed customer service and specialized account management operations to fit specialized shipper requirements. To meet the technological needs of shippers, GSO continuously invests in innovative technology that allows for integration with enterprise and third-party systems, real-time tracking, POD capture, and robust reporting capabilities. While GSO has seen tremendous growth over the years — with 36 distribution centers and thousands of packages delivered each day — our small-company values remain intact. We make it a point to provide a high level of personalized service with a dedicated customer service center and an account management group that can assist with any questions or issues. We’d like to learn about your shipping needs. Contact us today.
www.gso.com 888.744.7476 sales@gso.com MAY-JUNE 2015 | www.PARCELindustry.com
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COMPANY PROFILE
OnTrac Celebrates 25 Years OnTrac is the largest regional package delivery company in the United States. Founded in 1991 as a division of Express Messenger Services Inc., OnTrac has grown to become a top choice for e-commerce and companies looking to speed up delivery without the cost of express shipping. Now as the premier regional parcel carrier in the Western United States, OnTrac provides overnight delivery at ground rates to more than 60 million consumers. In February 2016, OnTrac celebrated their 25th anniversary of doing business. OnTrac strives to offer the most convenient, reliable and cost-effective shipping possible. Based on these values, OnTrac offers later pickup times, which increases your productivity and allows you to process more packages per day. OnTrac’s specialized regional model enables next-day ground deliveries at distances of up to 500 miles with fewer fees and lower surcharges within every ZIP code in California and the major metropolitan areas of Arizona, Nevada, Oregon, Washington, Utah, Colorado, and Idaho. OnTrac’s reputation for delivering excellent customer service and “can do” attitude sets them apart from other carriers. The Money-Back Service Guarantee assures you that OnTrac is committed to exceeding the expectations of their customers.
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In 2014, OnTrac launched DirectPost, and became the first regional carrier to offer a USPS Package Consolidation Service, which combines the speed of the OnTrac Ground service with the last-mile delivery network of the Post Office. As a SmartWay Transport Partner, OnTrac promises to do its part to save the environment by getting your shipments there with cleaner air. In addition, OnTrac is a USPS Workshare Partner, and is integrated with over thirty different multi-carrier software providers. OnTrac is comprised of three divisions based on service offerings; overnight, messenger, and international. For more information on overnight services, call 800.334.5000 or visit ontrac.com. For more information on messenger services, call 888.334.5001 or visit ontracmessenger.com. For more information on international services, call 800.628.4868 or visit ontracinternational.com.
www.ontrac.com 800.334.5000
COMPANY PROFILE
Why Choose LSO? Regional parcel carriers like LSO offer more flexible and economical shipping solutions than the global giants. And regional carriers are looking even more attractive with customers’ continued reliance on ground versus air transport, lower operating costs and fewer accessorial charges. The bottom line? Regional carriers like LSO can save shippers up to 40% for express overnight deliveries. No wonder shippers across the U.S. have turned to regionals as an alternative complement to fill voids in the market. Consider a regional carrier strategy with LSO — the South’s premier regional carrier for 25 years. Our one-of-a-kind shipping model provides you with your own personal rapid delivery system. More responsive, more flexible and more friendly than any other shipping company. That’s the power of LSO.
www.LSO.com 800.800.8984 info@lso.com
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COMPANY PROFILE
E-Commerce Delivery Solutions International Bridge provides many of the largest e-commerce retailers in the world small-parcel delivery solutions for consumers who are demanding rapid and inexpensive shipping. Domestically, we connect merchants with their consumers in Alaska, Hawaii, Puerto Rico, and other U.S. territories. Internationally, we provide retailers with parcel delivery and rapid customs clearance from Asia to the U.S. and from the U.S. to Asia. Our services also include air transportation, robust tracking, and direct-delivery to the consumer. Our unique solutions decrease costs, increase customer satisfaction, and deliver enjoyment to consumers every day. Contact us to find out how we go the distance to deliver your parcels.
www.myib.com 877.727.2354 sales@myib.com
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COMPANY PROFILE
Customer Loyalty, Delivered. Founded 30 years, LaserShip has grown to become the largest regional carrier in the Eastern U.S. With a footprint covering 22 states and Washington D.C., 63 distribution centers and four sort centers, LaserShip makes same-day, next-day and two-day deliveries a reality for consumers. The past couple of years have proven to be telling for everyone involved in e-commerce. Customers’ expectations continue to increase not only for shipping, but their overall experience. Now more than ever, consumers have endless companies to choose from where they want to shop, leaving retailers scrambling to meet their expectations. What’s more, it’s evident that retailers need to be one step ahead of the game in order to win customer loyalty. In order to stay ahead of that curve, LaserShip has not only continuously expanded their footprint in order to meet the increasing e-commerce demand, but this year they are also expanding and streamlining their technological infrastructure. In May, LaserShip announced a partnership with OpenLogix, an IBM Premier Business Partner, in order to develop an omni-channel digital and mobile strategy. This
will allow LaserShip to choose touch points throughout the service lifecycle in order to provide a more personalized and improved experience for its customers and the consumer. The first of four parts of the program is set to begin roll-out at the end of July, starting with the development of a mobile application that will employ geo-fencing technology using the IBM MobileFirst platform. The application will generate event-driven push notifications in order to expand interactions with shippers, consumers, and other supply-chain partners. LaserShip continues to make the last-mile delivery process faster and more flexible for shippers. Find out more about LaserShip’s shipping solutions, the digital and mobile strategy, and meet the team at booth #441 at the PARCEL Forum this September!
www.lasership.com 703.761.9030 solutions@lasership.com
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CROSS-BORDER 101:
A PRIMER
T
he concept of international shipping — and cross-border trade in both business-to-consumer and business-to-business environments — has been a vexing issue for merchants and shippers in general. According to the 2015 UPS Pulse of the Online Shopper, 80% of global shoppers abandon their carts due to questions about the total order cost, high shipping cost, and missing local options. Thus, transparency of costs, delivery options, and the customer experience for the 97% of online shoppers outside of the US become critical to success. DEFINING CROSS-BORDER TRADE: CROSS-BORDER VERSUS JUST SHIPPING INTERNATIONALLY B2C cross-border trade is defined here as the convergence of a seller and recipient for the delivery of goods in two distinct foreign markets, the selling price of the goods sold, the value
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a customs authority places on the good, the cost of transportation, the cost of clearance and ancillary fees, the necessary documentation for customs authorities, and finally, the duties and taxes associated with the product. The key component here is the “fully landed cost;” that is, the cost of the product sold, along with the cost of transportation, duties and taxes, and any clearance/ancillary fees that are either collected before the transaction is completed (i.e. in a shopping cart checkout) or in a collection process after the fact that makes it clear to the recipient that these charges will be part of the transaction. The table on the next page demonstrates the differences between a cross-border trade transaction versus a typical international parcel shipping transaction (US outbound). There are many pitfalls that come with starting a B2C cross-border shipping practice. The biggest of these challenges are the customs and regulatory laws of bringing a product (or
By Krishna Iyer
products) into a market. These laws can vary by market. Some of the more interesting ones are regulations that were likely implemented years ago to either protect a certain industry in a market or for cultural reasons, but have little relevance now in the age of e-commerce. For example, there are strict regulations and prohibitions on bringing in used goods, especially textiles and clothing, into India. Additionally, there is a regulation prohibiting the importation of horror comic books into the United Kingdom. Many of these regulations are not enforced now, but some can have serious consequences for shippers, as well as the importers. For example, many countries have a prohibition on “items offensive to Muslim culture.” The interpretation of what this can mean, as a very broad based regulation, is often left to conjecture and guesswork. Thus, it is important to find out exactly what items can be imported into each market — and without the customer being the one to find this out the hard way.
ISSUE
B2C CROSS-BORDER TRADE (CBT)
SHIPPING INTERNATIONALLY
DUTIES AND TAXES
Typically paid up front as a “fully landed cost” unless utilizing a tax treatment program (i.e. NRI, low value clearance)
Shipper/recipient receives a bill back from a customs authority
B2B OR B2C TRANSACTION
B2C (especially B2C e-commerce)
B2B or B2C or B2B2C
TYPICAL TRANSACTION SIZE (INCLUDING DUTIES AND TAXES)
Single package or a few parcels; typically less than $70 per item sold (excluding duties/taxes & shipping)
Can vary greatly
MODE OF SHIPPING
Typically air parcel, ground parcel, or an international parcel post product
Can be parcel, air/LTL/ TL freight, rail, ocean, or forwarding
DOCUMENTATION REQUIRED
Typically only Commercial Invoice and/or Pro Forma Invoice. A packing list is sometimes required/ encouraged.
Can vary greatly, but can include Commercial Invoice, SED/EEI, Consular Invoice, Export licenses, etc.
TYPICAL COUNTRIES US, UK, AU, CA, China, INVOLVED (US OUT-BOUND) Germany, South Korea
All countries where trade is allowed/permitted
COMMODITY/PRODUCT SHIPPED
Varies based on shipper, shipment, and recipient
Typical categories include consumer electronics, children’s toys, apparel, consumer items
Along the same lines as the regulations, the actual paperwork associated with international shipping can be vexing to many. Often times, the penalties for completing this paperwork incorrectly or not submitting it with the shipment can result in fines, penalties, returned shipments, and shipments held or seized by a customs authority. Another key pitfall in starting a cross-border trade shipping practice is that certain companies or specific parties have exclusive rights to import/distribute certain brands. While this can be easy to ascertain for certain “tier one” brands, it can be more difficult to know this for less commonly known brands. Often times, a retailer will depend on adding this to their vendor contracts with distributors and the parties with whom they purchase from as a way of managing this issue, but it remains a major challenge in starting a cross-border practice, as many items can be held up in customs as a result without a clear indication beforehand that a party had exclusive rights to the brand in market. Finally, a major stumbling block in expanding cross-border trade for retailers are importation value limits (often known as “de minimis values”) that can be imported in without duties. Many markets, such as Australia, have a high de minimis of around $1,000 USD, while others can have very low limits of less than $100. Other markets, such as Russia, have personal importation limits of goods less than $1,000 in a 30-day period. An additional wrinkle here is that the US has loosened the MAY-JUNE 2016 | www.PARCELindustry.com
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restrictions on imports coming from Europe to the US; the de minimis limit has been raised from $200 to $800 as of March 2016. Thus, cross-border trade is expected to rise on the “other side of the pond,” as more European retailers attempt to get into the US market and sell to US consumers. WHAT TO LOOK FOR IN A CROSS-BORDER TRADE PROVIDER? With the many potential stumbling blocks related to cross-border shipping, many would wonder if it is even worth the investment. The answer is a resounding “yes.” According to Forrester Research, cross-border retail sales are expected to grow by nearly 40% by 2021 and to over $400 billion in sales. Additionally, the share of retail e-commerce sales that comes from cross-border is expected to be 15% of online retail sales by 2021. With that in mind, here are some considerations to remember when considering a cross-border provider: 1. Does the partner guarantee their landed cost estimates? What information does the provider need to make the landed cost estimation? How much liability will you then assume? 2. What is the source of their landed cost estimates? Is it an algorithm, a human being, another company’s engine? What will be the timing of sending them the information on the item you are sending and the value returned? 3. How do they manage exclusivity and branding? Do they leave you “on your own” or can they be consultative to help with a solution to this problem? 4. What carriers do they utilize for shipping? Do they single source or use different ones? A single carrier may offer consistency of tracking events but may not offer the cost benefits that a company that has many carriers can offer. 5. Does the partner have BOTH capabilities to complete international documentation and/or allow you to complete it? Is there a fee for completing international documentation? 6. What is their experience with launching the “easiest” CBT markets like Australia, Canada, and the United Kingdom? 7. How are they managing the returns process? Do you even want the returns coming back to the US, and if not, do they have capabilities or partners for liquidation? While cross-border can be complex to navigate at first, it is critical to growth in the future and the payoff can be high for B2C retailers. ¾
KRISHNA IYER is Director, Shipping and Tracking Solutions, Neopost USA. He can be reached at k.iyer@neopost.com.
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GLOBAL PARCEL ADDRESSING – TRUST BUT VERIFY
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hen a parcel is not delivered, the first person to be blamed is often the last person in the process: the shipper. The reason for delivery failure is often a poor quality address. These costly mistakes not only diminish profitability on shipping services, they damage customer relationships. Ducking the responsibility for address quality in the realm of international parcel shipping seems to be the norm for many organizations, and for good reason. Global addresses are complicated, and achieving good address quality is a challenge. With so many platforms available to develop an online shopping cart, it is hard to keep track of how well each platform handles global addresses.
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The common assumption is that the consumer knows their address. While this is probably true in most circumstances, it is not a guarantee. Depending on the nation, the consumer may not adhere to the most current postal addressing standards, especially in countries where the postal administration has modified the addressing system or has not educated the population on the official standards. Other factors determine the quality of a shipping address. For some nations, the consumer may not be able to fit their address into the preset template on the ordering website. More astounding is the fact that the address may accidentally be modified or truncated as it migrates from ordering site to company database and is ultimately printed on a label. You can trust that your customers give you good address data, but the reality is
that you must verify. Here are some helpful hints for building your verification process. Developed versus Developing Nations The level of data coverage offered by a postal administration varies by country. More specifically, some postal administrations offer street and premise level support for addresses, while others countries offer only city level coverage. In general, developed nations have developed postal data, and developing nations have developing postal data. Visit the country’s postal administration website or the Universal Postal Union (www. upu.int) for a detailed coverage list. Common Sense Is King In virtually every part of the world, large urban centers have large populations and large numbers of addresses. When there
By Sheila Donovan not always accurate in terms of postal delivery standards. A simple, low cost strategy for verifying global addresses is to use the free, publicly available tools and apply common sense. Again, if you are shipping to a major population center anywhere in the world, the delivery address line should be specific and contain numbers and a street or a specific building. It Is a Team Effort Put knowledge at the center of your production environment. Educate your employees about the addressing standards for your top countries and make it a team effort. When a parcel comes back as undelivered due to bad address, challenge the production employees to find out what is wrong with the address. Many postal administrations around the globe have post code look-up tools, and you can find them through the Universal Postal Union (www.upu.int) or through a Google search. Have maps and reference charts available and make global knowledge part of your training. Reward employees that advance their global knowledge. are large numbers of addresses, house numbers or building names are assigned to distinguish one address from another. For example, in highly populated India you might see an address that contains Bose Pukur Road 75/12, indicating house number 75 on Bose Pukur Rd and unit number 12. You might also see an address that simply contains Elanjikal House, New Avadi Road W without a number. Although there is no house number in this address, this information identifies a particular house on a particular street and should be sufficient for delivery assuming that the address contains an accurate sub-city, city, and postcode. Google maps can often help you determine if you have the required geographic elements in an address, but beware. Google maps will often return an approximate address in many nations, which is
Develop Input File Quality Standards for Your Customers All parcel shipment information must be sent electronically these days. Receiving the data in advance of the actual shipment gives the shipper an opportunity to inspect, audit, and even correct data files. At a minimum, develop applications or procedures to audit input files for the presence of key address elements and truncation. Truncation of address data is a common an issue in global addressing. For example, in many parts of the world, the house number comes at the end of the street name so when truncation does occur, the house or apartment number is lost. A good rule of thumb is that if the address is in a major city in a developed nation, it should have at least a house number, building name, and street, and maybe an apartment number.
Scanning address lines for the presence of house numbers in developed nations is a first step in building useful logic. Create standards for your top countries, and make your clients aware of these standards. When the input file standards are not met, you may have to hold parcels or an entire shipment until the data quality issues can be analyzed. Some customers may balk at your new standards, but in the end, you will save them money and headaches. Take the Next Step Addressing standards are high in the US logistics industry. Major players like UPS and FedEx charge hefty fees for a single address correction. Be a proactive solution provider and take the next step. Implement an automated global address correction service. Consider charging a small fee for each address correction or for processing an entire file. If your organization has not implemented an addressing solution, now is a good time to start investigating options. You will want to find a solution that offers depth of coverage in your key markets. More specifically, you want to be sure that the providers offer street-level information in developed nations. You should also ensure that it handles multi-national character sets and diacritics so that you can cover a variety of languages and encoding systems. If you are shipping parcels internationally and want to offer top-notch service, you should become as proficient in global addressing as you are in domestic addressing. Yes, I know that is a tall order, but devising an implementation plan is easier than you think. Remember, Rome was not built in a day, so take it one step at a time. ž
SHEILA DONOVAN is President of Global DM Solutions and specializes in global contact data management and marketing. She can be reached via email at sheilad@globaldmsolutions.com MAY-JUNE 2016 | www.PARCELindustry.com
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OPTIMIZING YOUR FULFILLMENT OPERATIONS By Jim McLafferty
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oday’s consumers are focused on convenience, and they want retailers to provide this convenience across all channels. As an internet retailer, e-commerce, or direct sales company, you work hard to build the customer relationship in many different ways. Order fulfillment is a critical part of customer experience, and retailers need to make sure that customers are taken care of so they will continue to order from them. There are many factors involved at every link in the supply chain for customer satisfaction, but optimizing store and e-commerce fulfillment is key.
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In the past, retailers built two types of distribution centers, one (or two) on the east and west coasts of the US to handle store fulfillment, and another to handle strictly e-commerce. These distribution centers were built to handle their own specific type of fulfillment and none other. The retail stores on the East Coast were fulfilled from the closest DC, while the outlets on the West Coast were fulfilled from a DC located in the western US. Fulfillment typically took one to two days, but for stores in the central US, they had to live with three- to fiveday fulfillment. If the retailer received an e-commerce order, regardless of the
location of the buyer, that order was fulfilled out of the e-commerce-only warehouse. The consumer could be located next door to the West Coast distribution center, but since he ordered his item online, it would only be shipped from the e-commerce DC, and he’d have to wait to receive it. Large retailers, because of the heavy footprint they have with physical stores, have to leverage every piece of square-footage to maximize profit and revenue. Some retailers offer ship-from-store to customers. Using stores as distribution points lowers parcel shipment costs and drives a decrease in cost of goods sold. Plus,
ship-from-store leads to increased inventory turns and decreased safety stock at distribution centers. Many retailers may be best able to meet omni-channel fulfillment challenges by retrofitting existing operations or adding new processes and technology. However, very few existing distribution centers of more than a few years old are set up to accommodate the needs of an omni-channel distribution strategy. Retailers can significantly reduce fulfillment times by consolidating their store-replenishment and direct-to-customer shipping operations into a single facility. Fulfilling both store and e-commerce distribution channels from the same inventory stock has its complexities, mainly because stores order in bulk while e-commerce orders are smaller, often containing
only one or two items. As a result, material handling equipment and processes are different for each. But sharing a single set of inventory between channels offers the huge advantage of making all merchandise fully available at all times to both channels. Sharing inventory reduces the need to have duplicate goods sitting in bulk storage. An effective combined fulfillment solution must be modular and flexible, so that orders for each channel can be filled simultaneously; at the same time, processes should be dynamic, so that capacity can be shifted according to each channel’s fluctuating demand. Combined fulfillment systems can be a cost-effective way to optimize fulfillment flexibility and processing speed, regardless of the source or destination of the order.
Many traditional warehouse operations are not set up to efficiently accommodate a large range of orders with varying units and lines per order characteristics typical of multi-channel orders. When your operation tops 3000+ orders each day with 500+ SKUs in inventory, you will need an order fulfillment automation solution to keep throughput and accuracy numbers satisfactory. To be successful and profitable in omni-channel retailing, retailers need to have distribution centers that are flexible and offer: Real-time visibility into the entire pool of inventory to reduce safety stock and inventory carrying costs. Dynamic control over access and allocation of inventory in real-time.
There are also extra services you can provide within your fulfillment operations to ensure customer loyalty. These include: } Special Boxes or Packaging - Having a special box for your store is a good way to stand out, and it also helps with branding. It can make a strong impression on your customers. Make sure your box includes your logo and company name along with the URL so people can easily find you again. I know one retailer that has a beautiful yellow box that items are shipped in. Each item is wrapped in matching yellow paper and the box is tied with a big yellow bow. The boxes are so pretty you can’t help but want to open it, and the packaging makes you feel like this retailer really cares about their products.
} Include a New Catalog or Flyer - Make the most of your shipments by including catalogs, flyers, or brochures. Doing so gives you a chance to cross-sell other products or services. Personalize the customer experience by adding flyers that showcase items related to the ones that the customers purchased. Alternatively, you can tailor the flyers based on the season or time of year. For instance, if your annual holiday sale is coming up, then advertise it on flyers during the months leading up to it. Alternatively, you can print your company story on the back of the packing slip or advertise new products.
} Give Out Free Samples or Small Gifts - Anytime I order something from 1-800-PetMeds, I get a dog bone with my order. It is a nice touch. Including samples of new products or small gifts in your next shipment is a good way for customers to experience other products that you offer. Hopefully customers will end up buying the new product after they try it. You can include a discount coupon for the new products also as a way to entice consumers to purchase your products. If it fits your product type, have trial sizes you can include in the order. Your customer gets an unexpected reward and you get to introduce them to a new product they may later buy. Even a mint or refrigerator magnet may brighten someone’s day and differentiate your service from the others at very low cost. Throwing in a little extra in your shipments can go a long way both in customer retention and word of mouth referrals.
} Write a Personalized Note - A personalized, hand-written note is a nice touch that will make you more memorable to the customer. It shows that you are happy to have them as a customer and makes them feel more welcome. If you can spend a few minutes each day adding a personal thank you to just a few of your orders, you can help build the goodwill and “star” rating that helps build your brand. Sign a hundred thank-you cards during a boring meeting and have the fulfillment team add them to the next order wave. If you collect data from your customers, find out when their birthday or anniversary is. Then send them a discount coupon or note prior to the date. Everybody loves a Happy Birthday card with a 20% discount; this encourages consumers to spend more with you. There are many ways to let the customer know they are special.
} Give Something Extra if Shipments Are Delayed - If you have a delay in a shipment, do something extra so your customer won’t be unhappy with you. You can upgrade the shipping method to overnight express or give them free shipping. You can also include an extra product or two for free within your shipment. I once ordered a pair of bowling shoes, and for some reason, the order was lost. When I notified the company, they overnighted me the shoes along with a free bowling bag. Next time I need some bowling equipment, you can be sure that I will check this company out first.
} Offer Shipping Deals - Free shipping is here to stay and can help you to win business, especially if you compete against big box retailers. It’s an effective incentive that can drive conversions and keep your best customers coming back. If you can’t waive shipping costs altogether, try to give customers a complimentary upgrade from one shipping method to another. Plus, automating your fulfillment processes with material handling equipment that moves products faster through your warehouse can lower fulfillment costs while speeding delivery to your end customers.
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Processing and shipping of individual orders at the lowest cost, either direct-to-consumer or direct-to-store. Fully automated distribution processes that will increase productivity and fulfillment rates using a variety of material handling equipment. Flexible fulfillment paths to meet demand, regardless of which channel it comes from. Maximized efficiency in every part of the supply chain to meet customer expectations. Minimum cost to serve. Material-handling systems are a requirement in fulfillment operations to get products into the hands of customers more quickly and at less cost. Typical equipment used in fulfillment includes: An inventory management system that spans the entire supply chain for achieving real-time visibility
A distributed order management system to decide cost-effectively whether to drop orders into a DC, e-commerce fulfillment center, combination DC, or store to meet customer service levels Warehouse Management System Warehouse Control System to direct the flow of materials within the warehouse and communicate with all the material handling equipment Conveyors for moving products around the warehouse to appropriate locations Sortation units that deliver items to shipping locations Picking/Packing Systems for directing workers what to pick, how many, where to pick or pack, etc. Some DCs are starting to use robotic picking technology, too. Automatic Storage and Retrieval Systems (AS/RS) Miscellaneous: Robotics, goods-to-person, transportation management systems, RFID, equipment to apply labels to cartons, etc.
While there are many challenges in optimizing order fulfillment operations, businesses need to design their operations with the customer in mind, providing flexibility to handle any kind of order delivered to any location at any time. Done right, the result is a win-win for distribution and supply-chain providers, retailers, and consumers. ¾
JIM MCLAFFERTY is Director, Professional Services Group, DMW&H. With 25+ years of experience in the material handling and supply chain industries, Jim brings to the DMW&H team industry knowledge of the warehousing and distribution sectors, along with the ability to build lasting partnerships with clients by delivering cost effective, high quality, systems integration services. Jim is a thought leader in postal deliveries and parcel shipments, and the equipment and systems needed within a warehouse or distribution center to facilitate package deliveries.
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PARCEL COUNSEL BY BRENT WM. PRIMUS, J.D
Who Can See The Data? And Who Owns The Data? s used here, the term “data” means the historical information relating to the shipping of goods by a parcel shipper. In recent years, there have been numerous articles in PARCEL relating to how a parcel shipper can use this information relating to prior shipments to increase efficiency, lower costs, and better negotiate with carriers. In this installment of PARCEL Counsel, we will look at another aspect of data: the two interrelated legal issues relating to data — who can see it and who owns it. As a starting point, there is a federal statute (49 U.S.C. 14908) that prohibits the unauthorized disclosure of information. It reads, in part, as follows: “A [regulated interstate] carrier or broker… or an officer, receiver, trustee, lessee, or employee of that carrier or broker, or another person authorized by that carrier or broker to receive information from that carrier or broker may not disclose to another person, except the shipper or consignee, and a person may not solicit, or receive, information about the nature, kind, quantity, destination, consignee, or routing of property tendered or delivered to that carrier or broker for transportation provided under this part without the consent of the shipper or consignee if that information may be used to the detriment of the shipper or consignee or may disclose improperly to a competitor the business transactions of the shipper or consignee.” A variation of this statute has been in effect since at least 1978. This statute also provides for a civil penalty of $2,000.00 for anyone who violates it.
While many shippers have confidentiality clauses in their contracts with their transportation providers, this statute also protects the greater number of shippers who do not have contracts with their transportation providers. For those involved in transportation, the significance of this statute cannot be understated.
cal law library. However, the thought then occurred to me that, as so often happens with the law, there may not have been many court decisions on this topic… or else there would have been many decisions addressing particular situations. Either way, any research would be unlikely to lead to a definitive rule.
It is also significant to note that this statute does not apply to entities providing service as an air carrier. For example, if one were to know “the nature, kind, and quantity” of products shipped, one could, at least in theory, figure out the legendary secret formula for Coca-Cola. A more mundane example would be the disclosure of a shipper’s routing and transportation pricing to a competitor of the shipper. It is also significant to note that this statute does not apply to entities providing service as an air carrier. As an example, the statute would apply to UPS ground service and FedEx Freight, but not UPS or FedEx when operating as an air carrier. This leads us to the issue of the ownership of the data. While many larger shippers have sophisticated software so that they can generate and maintain information relating to their shipping patterns, many other shippers do not. On the other hand, most carriers (and especially the larger ones) do have sophisticated systems for tracking a particular customer’s data. Several years ago I received a call and was asked, “Who owns the data?” My first instinct was to head over to the lo-
Having considered the issue further, I believe the true question is whether or not a carrier has to share the information it compiles with its shipper-customer. Which then leads to the conclusion that the solution to this legal question — as with others where there is no bright line answer — is to address the issue in a contract. For instance, a contract would have a clause stating unambiguously that the shipper has ready access to all data generated by the carrier in the course of providing service to that shipper-customer. At the same time, it should be noted that carriers might resist such a clause, or seek to narrow it, since one of the uses of the historical data would be to use it to solicit bids from a different provider. ¾
BRENT WM. PRIMUS, J.D., is the CEO of Primus Law Office, P.A. and the Senior Editor of transportlawtexts, inc. Previous columns, including those of William J. Augello, may be found on the PARCEL website (www. parcelindustry.com). Your questions are welcome at brent@primuslawoffice.com. MAY-JUNE 2016 | www.PARCELindustry.com
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WRAP UP BY MICHAEL J. RYAN
Summer Thoughts s you are gearing up for the summer months and taking some time off, it is always great to let your mind wander and come up with new and better ideas to enhance your parcel shipping program. It is a very non-threatening environment, and anything goes; just have a pen and paper nearby or your phone to take notes. Some of the most innovative ideas come from a very relaxed state of mind. Here are some of my thoughts that you may want to ponder during this time: partnerships, technology, and consultants. Let me address each one of these: 1. Partnerships: Many large shippers have the volume to negotiate fairly decent agreements (but I would still encourage the use of parcel consultants; read on). For many small shippers, this is a key element in maximizing the discounts that you can get. As many of you know, UPS has two primary resellers (Uni-Shippers and Worldwide Express). FedEx has not embraced the reseller concept, and DHL Express has 20 resellers. The USPS has a multitude of Business Alliance Partners that can help reduce your B2C shipping cost. There are also many regional carriers and/or local couriers that can provide equal or better service than the big carriers. 2. Technology: There are three different areas that you should think through 34
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while you are enjoying your time at the pool or beach: multi-carrier shipping systems, dimensional equipment, and scales. There are many providers of multi-carrier shipping platforms on the market. Some are designed for high-volume shippers, and some are designed for the SMB customer. No matter what, this is a no-brainer to have as it requires minimal cost and can help in selecting the best cost for
agreements and invoicing so complicated, everyone needs the assistance of an industry expert. The challenge is when any shipper that spends less than one million in parcel shipping, it is difficult for the consultants to bring value to the relationship. Many of the parcel consultants have partnerships with other organizations to help them with these smaller clients… you just need to ask them.
There are low-cost solutions on the market; you just need to do a little research. the service (at your fingertips). As for grabbing the DIM weight of all your packages, it is essential that this type of equipment is part of your operation. Again, not a problem for big shippers, but it is really needed for small shippers. There are low-cost solutions on the market; you just need to do a little research. As for scales, most shippers have them, but for those that do not have them, this lack can cause a lot of hidden cost in the post shipment billing process. For many e-commerce shippers, this can be a drag on your margin. If you can integrate your DIM equipment and scales with your multi-carrier system, then you are on the right track. 3. Parcel Consultants: I am a strong advocate for the use of parcel consultants. The carriers have made their
As you are relaxing, please think of the areas above and put your creative juices to work to come up with some of your own summer thoughts! ¾
MICHAEL J. RYAN is the Executive Vice President – Parcel Solutions at Pro Star Logistics and has over 25 years of experience in the parcel industry. He can be reached at 708.224.1498 or michael.ryan@ prostar.com