As a part of OnTrac’s continued effort to improve the quality and efficiency of our customer’s shipping experience, the company has launched an initiative that will include installing material handling systems in all of our facilities and expanded operations in its San Diego facility.
The facility, located at 7077 Consolidated Way #G, San Diego, CA. 92121, increased more than 40,000 square feet from its previous location. The building has 18 dock doors positioned for both inbound and out bound loads that will be picking up and delivering in the San Diego area.
With the expanded San Diego location, OnTrac will be adding additional sorters, projects and increase the number of service providers to the San Diego area.
As a compliment to its effort to increase the operation in San Diego, OnTrac installed a material handling system. This decision enables OnTrac to improve the customer experience and reduce the number of handles per package.
Benefits of Material Handling in San Diego
- The new material handling system will improve operational capacity, process rate, and improve efficiency to service our customers in the San Diego area.
- The expanded San Diego building will increase OnTrac’s package flow and double the sort capacity.
- The facility services the cities of Escondido, Bonsall, Fallbrook, Carlsbad, Encinitas, Oceanside, Ramona, Del Mar, Rancho Santa Fe, La Costa, Mira Mesa, San Diego, National City, San Ysidro, Chula Vista, La Jolla, Pacific Beach, Mission Beach and Mission Valley.
From San Diego, OnTrac delivers overnight to every ZIP Code in California and the major metropolitan areas of Arizona and Nevada, with two-day service to Washington, Oregon, Utah, Colorado and Idaho.
Faster deliveries and more aggressive rates are a welcome concept for any business these days. These upgrades come as a direct response to the increasing number of businesses choosing OnTrac for all their overnight shipping, and guaranteed delivery needs. OnTrac is proud to offer the highest quality of service at the most competitive rates.
Saving time and money is the pinnacle of Supply Chain Management (SCM). It is the very goal of this profession and the prevailing paradigm of this case study. Through innovation and excellence, regional parcel delivery companies have developed win-win solutions to strengthen the Supply Chain and deliver advantages to companies that distribute parcels business to business and business to consumer. This case study will focus on OnTrac, the fifth largest parcel delivery company in North America, and the largest regional parcel delivery company in the United States. Originating from consumer demands for overnight delivery at less-than-ground service costs, and the OnTrac mission to be the leader in regional overnight delivery, the company has exceeded customer expectations, provided unsurpassed service, quality, flexibility and innovation to the Supply Chain.
Throughout its 22 year history, OnTrac has provided shippers an alternative to the high cost of the National Carriers, by offering a service that not only operates faster and more affordably, but also with the flexibility to provide shippers more options. The global one-stop solution to shipping has become outdated, and as shippers look for ways to save money, they have found solutions in regional carriers. By integrating multicarrier shipping software, and including regional carriers into their shipping mix, shippers are able to diversify their shipping portfolio, streamline their efforts and save time in transit.
Synchronizing Supply and Demand
It all started with shippers. When free shipping was not enough to be competitive in the ever-changing eCommerce world, the largest eCommerce companies, medical and dental supply distributors began searching for new ways to surpass their competition. They found solutions in regional parcel carriers. Not only would the implementation of a regional parcel carrier provide shippers with an alternative to the high cost of national carriers, but it would also save them time in transit and give their customers a reason to keep coming back. The strength and innovation of the regional parcel carrier lies in its ability to operate with a 100 percent customer solution focused business plan.
OnTrac understands that Business to Business customers want to keep very little inventory on hand. Both B2B and Business to Consumer customers want overnight delivery, and every customer demands the lowest possible price. Everything OnTrac does, as a company, is to meet the needs of its customers —to fill the niches that are left open by the national carriers, and to do it in a way that is cost effective and helps shippers exceed their customer’s expectations. The regional hub-and-spoke model OnTrac operates with keeps all its business on the Ground, therefore strategically aligning its facilities and transport lanes throughout the 8 Western United States. This enables OnTrac to provide a one-day Time in Transit (TNT) advantage to major markets where the United Parcel Service and FedEx Ground are only capable of offering customers two or three day ground service.
Additionally, the mega-regions OnTrac caters to create the perfect storm of central location, business friendly laws, great workforce, access to major ports and major interstate highways while all converged to attract major distribution. The company focuses its resources in these regions and is able to provide the very best advantages at the very best price. Reno-Sparks, Nevada is one of those mega-regions where OnTrac’s innovation has synchronized supply and demand by:
- Being the Just in Time (JIT) solution customers want, exceeding the TNT of the industry standard.
- Guaranteed overnight Ground delivery to seven states from Reno-Sparks, Nevada.
- Delivering the best service for less, leveraging a unique business plan, and yielding the lowest cost to serve.
OnTrac customers seek advantages in the markets the company specializes in. They want the latest possible pickup times, the best possible TNT, the most responsive customer service, real time tracking, and flexible IT integration. They want a partner who cares and can make a difference in their business. For these reasons OnTrac is committed to Customer-Centric Logistics, which matches or exceeds the industry standard from each market. This can be seen most dramatically through comparing TNT with the national carriers.
From Reno-Sparks, Nevada, OnTrac customizes plans for each customer to maximize what is most important for them while also boosting profits. For most customers it is TNT. OnTrac provides overnight Ground service to the seven states of California, Nevada, Arizona, Utah, Washington, Oregon, and Idaho from Reno. UPS and FedEx Ground are limited by their national network, capable of providing overnight service by Ground to only two states: CA, NV. This is where the innovation that is a regional carrier comes into play. The demand for overnight delivery exists just the same whether the customer is located in in any of the eight Western states in the OnTrac service area or anywhere in the United States. OnTrac’s network supplies a solution to those companies committed to providing the best service to their customers from their Western regional distribution centers.
By leveraging a unique business model, OnTrac is able to provide the best service at the lowest cost-to-serve. Even with massive discounts from the National Carriers, large global customers believe the OnTrac prices and services are best. One reason seems to be simple economics of a lack of competition in the industry. This result is the duopoly of UPS and FedEx and the ability they have to keep prices high. The other reason is OnTrac’s creative business approach, focusing on specialization, production, and value.
One simple example illustrating this is the Service Provider settlement. Typically, drivers in the industry are paid per hour. The incentive to provide better service and be more productive is not aligned with how they are paid. The prosperity of OnTrac’s Service Providers is directly linked to the success of customers and the company. Better service and the more productivity provided, results in more success for all OnTrac partners.
Furthermore, OnTrac’s dedication to regional overnight delivery requires fewer intermediary sort facilities. In contrast, National Carriers incur intermediary sorting costs and equipment, which are must haves to support their networks. This ultimately results in an overall lower cost to serve.
For more information on this topic, check back next month for Part 2 of OnTrac and the Supply Chain.
OnTrac is pleased to announce its spot in the 2013 Supply & Demand Chain Executive 100, which highlights the industry’s “100 Great Supply Chain Projects.”
OnTrac was nominated by Newegg Inc., the leading electronics-focused e-retailer in the United States, for its role in helping the company improve the customer experience by decreasing delivery times and generating savings.
Newegg added OnTrac to its transportation carrier portfolio in September, 2012 to help service its customers on the West Coast. As a result of using OnTrac, Newegg was able to reduce average transit days and get its products into the hands of customers faster.
“Providing the best possible service to our customers is a top priority at Newegg,” said Kunal Thakkar, Vice President of Operations at Newegg. “That’s why we decided to introduce regional carriers like OnTrac to help bring more flexibility in our business operations while enhancing the customer experience. We’re thrilled that Supply & Demand Chain Executive has recognized our work together and we look forward to continuing to work closely with OnTrac.”
For the past 11 years, the SDCE100 has spotlighted successful and innovative transformation projects that have enabled shippers to deliver bottom-line value to small, medium and large enterprises across the range of supply chain functions that industry professionals face today.
“We would like to thank Newegg for nominating us as one of the Supply and Demand Chain Executive’s Top 100,” Vice President of Marketing Laura Peterson said. “Our facilities and transport lanes are set up strategically throughout the 8 Western States to provide our customers a transit time advantage over their competitors. We are happy to be a part of Newegg’s continued success and to have played a part in supporting their business goals.”
The world of supply chain is ever-evolving, becoming more complex seemingly by the day. To keep up with the volatility and the demand-driven needs of customers, supply chain solution providers, consultants and other organizations must be flexible enough to react to change but also visionary enough to prepare for the future.
“Our goal with this year's ‘100’ is to put the spotlight on successful and innovative transformation projects that deliver bottom-line value to small, medium and large enterprises across the different functions that comprise the supply chain,” said Barry Hochfelder, Editor of Supply & Demand Chain Executive, when the awards were announced. “The projects featured in the '100' article can serve as a roadmap for supply chain executives looking for new opportunities to drive improvement in their own operations.”
After receiving nomination forms, the Supply & Demand Chain Executive editorial staff identified applicants that best fit the stated criteria for the “100”. Final recipients are featured with more detail in the June 2013 print issue of Supply & Demand Chain Executive, as well as online at sdcexec.com.
About Newegg Inc.
Newegg Inc. is the leading electronics-focused e-retailer in the United States. It owns and operates Newegg.com and NeweggBusiness.com, and regularly earns industry-leading customer service ratings. Newegg delivers a world-class e-commerce platform and is committed to serving the online technology community, from tech-enthusiasts to small and medium-sized businesses. Both Newegg.com and NeweggBusiness.com feature a comprehensive selection of the latest computer hardware and consumer electronics products, detailed product descriptions and images, as well as how-to information and customer reviews. Newegg Inc. was founded in 2001 and is headquartered in City of Industry, California.
As a part of OnTrac’s continuous effort to improve the quality and efficiency of our customer’s shipping experience, the company has launched an initiative that will include installing material handling systems in all of our facilities.
After expanding operations into a building more than four times the size of its previous operation in Phoenix, OnTrac made the decision to install a material handling system. As a compliment to its effort to increase the throughput capacity of the facility and handle increased volume levels, this decision also enables OnTrac to improve the customer experience and reduce the number of handles per package.
The new system has increased the company’s throughput capacity by over 300% enhancing the speed of the OnTrac Ground Network and created 52 new job opportunities for Phoenix residents.
“We are truly excited about the increased capabilities that each of these new systems brings us. We are confident that these increased capabilities will give us the ability to both increase efficiencies and improve service,” said Director of Operations Development Jim Brownlow.
Faster deliveries and more aggressive rates are a welcome concept for any business these days. These upgrades come as a direct response to the increasing number of businesses choosing OnTrac for all their overnight shipping, and guaranteed delivery needs. OnTrac is proud to offer the highest quality of service at the most competitive rates.
“Based on what we have seen, we are confident that our process rates and efficiencies will meet and exceed our expectations,” Brownlow said. “This is not only exciting news for Phoenix but is exciting for all of the facilities that are having systems installed.”
Today, more than ever, there is a focus on the need for “Going Green” at the corporate level. OnTrac Customer, C.W. Driver, understands the need for social responsiveness and sustainability as it relates to building and construction. This focus results in many adaptive re-use, renovation and modernization techniques on smaller, new construction projects. C.W. Driver, a premier builder serving the Western United States since 1919, has established a Special Projects Group, Driver SPG, in order to become a player in this expanding market.
Historically C.W. Driver has not targeted these projects, specializing instead on large-scale new construction and project management. However, with the rising focus on sustainability, C.W. Driver and Driver SPG are capitalizing on this opportunity to stay at the forefront of these efforts.
As leaders in General Contracting and Construction Management services, they remain on the cutting-edge across a broad spectrum of industries including education, healthcare/biomedical, entertainment, retail, tenant improvement, and hospitality. Landmark projects, historical renovations, and occupied campus programs have distinguished C.W. Driver as leaders in their field.
Driver SPG is a standalone company headquartered in Anaheim, California and serves all of C.W. Driver’s key regions: Los Angeles, Orange, Ontario, Ventura, San Diego, and the Inland Empire. Operating with less overhead, Driver SPG provides cost-effective project delivery without sacrificing the high level of quality and service that has made C.W. Driver the leading construction firm in Southern California.
Driver SPG clients benefit from enhanced efficiency and flexibility. OnTrac understands the importance of these standards and is willing to go the extra mile for our customers like, Driver SPG.
Cecilia Ulloa, Office Manager for Driver SPG, shares, “We have been using OnTrac services daily for over a year and are very happy with the service.” Ulloa boasts, “OnTrac has been wonderful for all of our shipping needs!”
Driver SPG has access to C.W. Driver’s advanced technological resources including Building Information Modeling (BIM), and proven cost and time management systems.
“We are a business that also believes in using environmental safe products and have a recycle bin,” Ulloa states. “Until OnTrac, I had not found anyone else who would recycle these for us.”
OnTrac offers a recycling program through our supplier, Canyon Computer Supplies, which allows our customers to recycle their empty printer cartridges. Customers can send their empty cartridges directly to OnTrac and, in turn, Canyon Computer Supplies will pick up these empties to be recycled. Another option is to go directly to http://tonerrecycle.net/ where customers can select a recycling option that best meets their needs.
Remanufacturing toners keeps more than 42,000 tons of plastic, metal and toner out of the waste stream. For every cartridge that is remanufactured, a “core,” or spent cartridge is reused. Each core is made of approximately two and a half pounds of plastic, and without remanufacturing, that core would end up going into the waste stream. The plastic used in a typical cartridge is industrial-grade and does not begin to degrade for at least 10 centuries, or 1,000 years.
The vendor supplies from Canyon Computer Supplies are environmentally friendly too. They conserve nature's resources by reusing non-wearing plastic shells and metal components from spent OEM cartridges. Canyon Computer Supplies and their vendors are proud to manufacture more than 80,000 environmentally conscious toner cartridges every month in addition to providing recycling services for OnTrac and other companies.
Using Remanufactured Toner Cartridges benefits all of us:
• Substantial fossil fuel and energy savings (generally, 95% of the energy used to make OEM cartridges)
• Reduction in pollution associated with extraction of virgin resources
• Each remanufactured cartridge lifecycle saves as much as one pint of oil
• Reduction in pollution associated with manufacturing new, OEM products
• Reduction in landfill-destined waste
OnTrac is proud to create programs that help our customers continue be eco-friendly.
Ulloa adds, “Thank you for making recycling easier and more convenient!” Help us preserve our environment for generations to come. Please reduce, reuse and recycle.
Royalmailers.com is a leading manufacturer and distributor of shipping supplies online. The company serves retail, wholesale, and distributor markets throughout North America. Their factory direct sales model has been well received by their customers that typically save 35% or more by skipping traditional distribution channel markups. They offer a full product line of in-stock ready to ship supplies, boxes, tape, bubble wrap, shipping labels, and more.
But that’s not all.
They also offer their customers custom packaging options where shippers can print their company logo on their packaging supplies.
“We started manufacturing a few different product lines to give us an entry into the marketplace, from there, we kept growing it” Royalmailers.com Operations Director Tam Kaccem said. “Though we manufacturer many items, we’re more famous for our Bubble Envelope lines.”
As a packaging manufacturer, Royalmailers.com prides itself on its ability to bring flexibility and speed to businesses seeking their products and services.
“Business is great,” Kaccem said. “We’re growing year over year which has been a blessing. The more customers that find out about us, the more we grow. Adding manufacturing has been a big contributor to our success. It seems like the word is out about what we can offer, but we’re still rather new in the industry compared to some of our competitors that have been in business for more than 50 years.”
As their customer base grows and industry demands change, it’s important that Royalmailers.com grows and changes with them. That’s why in 2006, they started using ShipWorks, a multicarrier software provider that allows clients to ship faster, work smarter, save time and reduce cost.
“I can’t say enough, honestly,”Kaccem said. “ShipWorks has a real product. They have enough support to handle the ever changing protocols of the internet. They’re up to speed with all the new rules and regulations for each and every market. I’m really impressed with what they’ve done with their software. It’s been a lifesaver for our company.”
Merchants can connect ShipWorks to multiple sales channels and download orders into a single system where they can be reviewed and prepared for shipping. ShipWorks simplifies shipment processing by automatically configuring shipments based on rules specific to each business.
The software can batch print thousands of shipping labels at one time, print fully-branded packing slip documents, send email notifications with order status details, and update tracking information to each marketplace.
“What took us 8 hours without ShipWorks now takes us 30 minutes,” Royalmailers.com General Manager James Mecham said. “And it is error free.”
With 40 percent of Royalmailers.com’s business in the Western part of the United States, OnTrac’s regional service area is a perfect fit; and the new OnTrac integration into the ShipWorks Shipping software further streamlines their operation.
“The main thing for us is the filtering,” Mecham said. “Honestly, ShipWorks is a great match for what the regional carriers are doing with certain states and ZIP codes. They know what shipments go with OnTrac. That way there’s no manual decision making when it comes time to shipping orders. It takes that potential error out of the equation.”
The addition of OnTrac support in ShipWorks provides instant access to a variety of regional shipping options that are extremely competitive in terms of delivery time and cost.
“It has saved us a lot of time,” Mecham said. “Before, we had to run the OnTrac software on the computer alongside ShipWorks, where we were typing in the info and then processing it. Now, it’s all integrated and it’s a time saver for us.”
Royalmailers.com recent decision to relocate to a bigger facility in Sacramento confirms the success of the partnership. The new, 80,000 square foot building, gives Royalmailers.com the opportunity to reach 7 of the 8 states in the OnTrac service area overnight.
“All the carriers are built into the software,” Mecham said. “If you want to choose different carriers they’re all there for you. It’s one central junction point through multiple websites. All of those orders get pulled into ShipWorks and they can all be processed. ShipWorks automatically update through their API, which is great.”
With the high cost of priority shipping, the demand for efficient transportation is growing.
Shippers are looking for ways to save money on transportation costs, and to do it in a way that makes sense for the environment.
These days, that means putting freight on the ground.
But for companies who use a regional carrier like OnTrac, choosing a ground shipping option doesn’t have to mean sacrificing service. The regional carrier’s next-day delivery footprint is much larger than that of a national carrier’s, and without the need to support an entire air fleet, the company is able to be more conscious of their carbon footprint.
The regional hub-and-spoke model operates entirely on the ground and enables OnTrac to keep costs down and keep its corporate commitment to the environment a priority. That’s why OnTrac partners with Penske.
“OnTrac continues to take the necessary steps to reduce emissions on our fleet of vehicles,” Director of Fleet Operations Steve Heron said. “We are conscious of all the decisions we make as both a responsible corporate citizen and a SmartWay Partner. Choosing to use Penske is a further demonstration of our commitment to operate responsibly.”
Penske is a transportation service that operates in a variety of industry segments including retail automotive, truck leasing, transportation logistics, transportation component manufacturing and professional motorsports. They are also environmentally conscious.
Penske recycles its waste oil—and a primary use is to re-refine it into a base stock for lubricating oil. This process is very similar to the refining of crude oil.
The result is that the re-refined oil is of as high a quality as a virgin oil product. This is important, as just two gallons of used oil can generate enough electricity to run the average household for almost 24 hours.
Because the OnTrac fleet is predominately made up of Penske trucks, the company is a beneficiary of this program and an increasingly green shipper—through its partnership with SmartWay, OnTrac has been able to contribute to the overall savings of 1.5 billion gallons of fuel, $3.6 billion in fuel costs, 14.7 MMT of carbon dioxide (CO2), 215,000 tons of oxides of nitrogen (NOx) and 8,000 tons of particulate matter.
It has also enabled the company to identify opportunities to improve efficiency, demonstrating efficiency to potential customers and reduce our fuel costs. Through partnerships with environmental experts and by using new technologies OnTrac is finding ways to help reduce the impact of our operations on the environment, and that makes a difference for everyone.
For the employees at Nuts.com, the philosophy is (and always has been) simple: treat customers as you’d like to be treated.
It’s modest and unassuming, but it’s this family owned business’ philosophy, and it’s held up for over 80 years.
“We continue the family tradition of providing the same superb quality and service as in the past,” Chief Nut Jeff Braverman said. “Our product selection has grown and our marketing strategy has evolved, but our service has stayed the same. When you place and order, we are going to slam dunk it. We’ve stayed true to the philosophy of ‘treat your customers as you want to be treated’ but these days, we let our personality show.”
Eighty-four years after Poppy Sol (the company’s first generation nut) opened the Newark Nut Company, selling premium bulk items at the Mulberry Street open air market, Braverman and his cousin David have taken over.
Through the years, the industry has changed—new products have been developed and the demand for a healthy alternative has continued to grow. But as inventory changes, their focus remains the same.
“We’re customers too,” Braverman said. “When we shop or order something online, we have the same expectations as the people who order products from us. We keep that in mind.”
That means satisfied customers from the time they place an order to the time they receive their shipment, and anyone who has ever ordered from Nuts.com knows exactly what that means.
Their packages are all unique—cardboard, with what looks like jokes, hand written in black sharpie, and deals for every occasion.
“We try to go over the top, but we do it in a professional way,” Braverman said. “Our business is very regimented, but it’s fun and we keep it light.”
And although the name may not imply it, Nuts.com is stocked with much more than cashews and almonds.
“We have a really diverse group of customers, because we have a really diverse group of products,” Braverman said. “We started with nuts and dried fruit and now offer gluten free products and specialty powders. We keep discovering new areas and it keeps things interesting.”
The products sell themselves, but the service is what keeps people coming back.
“When you order something online, you want it fast,” Braverman said. “With food, you want it faster. You want instant gratification. People have come to expect fast shipping. It’s not necessarily that people were clamoring for faster shipping—I think everyone wants it. As a customer, I want it, and it all goes back to the philosophy of treating your customers how you want to be treated.”
OnTrac is proud to partner with a company like Nuts.com, offering overnight delivery to six of the seven states in our service area from our Reno, NV location.
“OnTrac’s overnight delivery footprint is amazing,” Braverman said. “It puts the national carriers to shame. And what’s better than forming a partnership with your shipper? There’s synergy. My experience has been so great.”
When the employees at Nuts.com ship with OnTrac, they ship with the confidence that OnTrac will be able to continue their high level of customer service. It is in our ability to provide faster time in transit and keep costs down that keeps customers in our service area satisfied. We are proud to be able to uphold the Nuts.com commitment to quality service from the time it leaves the company’s hands until the time is arrives at a customer’s door.
Shipping costs are one of the biggest expenses for many small businesses, but resourceful entrepreneurs are finding ways to reduce the sting.
Fred DuBois, for example, had been trying to cut the shipping costs at his Laptop Battery Express in Cleveland since he founded it in 2007. Free delivery service for about 50 battery orders a day was costing him as much as $500. He had been relying almost exclusively on FedEx Ground, but this summer, he realized that varying his carriers and using the U.S. Postal Service would cut shipping costs in half. Today, he says, he ships about half his orders with FedEx and the other half with the post office, saving about $250 a day.
To achieve such savings, consider these 10 ways to trim shipping costs:
1. Negotiate with multiple carriers. All shipping companies have pricing schedules based on volume: The more you ship, the lower your rate. But small businesses often don't realize they also may have negotiating power, says Jack Mitchell, president of PANCGroup, a Boston-based parcel appraisal and negotiations consulting firm. If you ship large numbers of packages, compare prices and try to persuade carriers to offer lower rates. "If Fed Ex knows UPS is vying for your business, you've got something to negotiate," Mitchell says.
2. Get suppliers to use your shipping account number. DuBois receives inventory from 12 suppliers, including eight in China and four in the U.S. While he originally had suppliers shipping products to him and invoicing for the transport costs, he managed to persuade his domestic suppliers to ship products on his company's FedEx account number. This not only increases his business's shipping volume, which can lead to cheaper rates, but it also helps prevent suppliers from padding their shipping costs. Kevin Lathrop, president of Unishippers, a Salt Lake City-based company that buys and resells transportation services, recommends including this shipping requirement in your purchase order.
3. Use packaging provided by your carrier. If you use your own packaging, you could face additional "dimensional fees" if your box exceeds the size regulations set by UPS and FedEx. To avoid those extra charges, consider using the packaging provided by your carrier, which doesn't have dimensional fees. By putting a one-pound box into a FedEx envelope, for example, DuBois cut his shipping cost by 15 percent.
4. Consider a regional carrier. Such carriers often provide the same services as FedEx or UPS at a reduced cost, Mitchell says. Regional carriers include Spee-Dee Delivery Service in the Midwest, OnTrac in the West and LoneStar Delivery & Process in Texas. But keep in mind their delivery networks are limited. You also might reduce your bargaining power if you spread your business among too many carriers.
5. Use online shipping. One way to save on U.S. Postal Service costs is to pay for your shipping online. You can save up to 16 percent on priority mail orders and up to 60 percent on express mail, says Beth Fluto, manager of digital media for USPS. You also get free pick-up service, priority mail delivery confirmation and shipping supplies when you pay online with the post office.
6. Invest in prepaid shipping. To help cut FedEx and UPS costs, consider prepaid shipping, which offers a discount rate of up to 20 percent. This means you buy a quantity of shipping labels upfront and affix them to packages as needed rather than pay for each package when you send it out. Prepaid shipping works best when you know you'll be sending out the same weight packages repeatedly and can determine the shipping cost in advance.
7. Buy insurance from a third party. While carriers charge about 80 cents for every $100 of insurance, third-party companies like Parcel Insurance Plan and U-PIC Shipping Insurance charge about 45 cents. The savings can add up, Mitchell notes, if you frequently ship expensive items.
8. Factor in all shipping fees before billing customers. Carriers have more than 75 special charges, including fuel surcharges, fees when requiring a signature from the recipient, or Saturday delivery fees, Mitchell says. If your customers pay for shipping, be sure to include all these extra costs in their bills so you don't end up absorbing them yourself.
9. Consider hybrid services. While they have certain volume, weight and size restrictions, hybrid services like SurePost by UPS and SmartPost by FedEx can cost half as much as standard UPS and FedEx delivery options, Mitchell says. These services pick up packages at your business and ship them by UPS or FedEx to the post office closest to the destination. The local mailman then makes the final delivery. While the cost is less, this extra step can slow delivery time.
10. Ask about association discounts. Find out if your industry's professional association has a partnership with a carrier that offers member discounts. Depending on the size of the association, you could be eligible for discounted rates of up to 50 percent on certain services with carriers like FedEx and UPS.
By: Jane Porter, Entrepreneur
For more information on this article, click here.
The 2012 PARCEL Forum will shine the spotlight on regional parcel carriers with multiple themed tracks and educational sessions. The regional carriers advertise many benefits over the national carriers including cost savings, greater service options including same day delivery, and custom/specialized solutions. Is your business a candidate for regional carrier services?
To better understand the regional carrier market, its advantages and potential disadvantages as well as shipper’s experiences using regional carriers, the PARCEL team once again partnered with the parcel industry experts at Shipware. PARCEL will publish the results of the “2012 Shipper’s Survey on Regional Parcel Carrier Usage” in the October edition, and Shipware will unveil survey results at the Parcel Forum.
Here’s a teaser, but look for the full results at the PARCEL Forum and in the September/October issue of PARCEL.
Like the name implies, regional carriers serve a specific region within the U.S. offering reliable package delivery services similar to FedEx and UPS. Regional carriers such as Eastern Connection, Lone Star Overnight, OnTrac, Spee-Dee Delivery and Pitt-Ohio cover more than 80% of the U.S. population and specialize in short-haul delivery (typically up to 500 miles). (To view the OnTrac Service Area, click here.)
Regional carriers can offer cost savings of 10% to 40% over UPS and FedEx pricing. As an example, Spee-Dee Delivery’s pricing starts at $3.79 for next-day delivery of a 1-pound package within Zone 2. Compared with UPS and FedEx’s minimum charge of $5.49, shippers would save 31%.
Since regionals concentrate operations in a well-defined geographic market, service to that market is often better than what the national carriers provide. For example, Eastern Connection handles East Coast deliveries from Maine to Virginia, all included as “next day” delivery points. Using FedEx and UPS Ground service, the same coverage area extends to five zones for 1-4 day delivery.
Survey respondents listed the following responses as “benefits realized to regional carrier usage”: Larger next day delivery footprint; Better service than nationals; Cost savings; Fewer surcharges; Better billing terms; Better sales rep; Improved reporting; Better dimensional divisor; Better or no minimum charge; Improved customer service; Specialized/Custom solutions; and Same day options.
Despite the many advantages, shippers are largely unaware these carriers exist. Only 39% of survey respondents reported using regional carriers, and two-thirds of that group ship less than 5% of their overall volume via regionals.
Are there any downsides to shifting parcels away from national carriers in favor of regional carriers? Is service up to par? What about customer service, caliber of the driver, automation, reporting and tracking? And just how much are the reported cost savings?
The complete survey results will reveal opportunities for shippers as well as potential mistakes to avoid. Again, look for the full results in the September/October issue of PARCEL. See you at the PARCEL Forum!
Rob Martinez, DLP is President & CEO of Shipware LLC, a parcel auditing and consulting company based in San Diego, CA. He welcomes questions and comments and can be reached at email@example.com.