The Peak Season Solution
It's Friday, December 21 at 6:00 PM, and you’re the distribution manager of a large e-commerce company. The national carrier’s last truck has just pulled away from your distribution center dock and you’re wondering how you’re going to get all the packages you have yet to process delivered by Monday the day before Christmas. Cyber Monday seems like a distant memory but you’ve still got this last peak season hurdle to surmount. What do you do?
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Author: Mark Magill, Director of Business Development, OnTrac
In the midst of the current economic climate, shippers are actively seeking to reduce their costs. Shipping with a regional package delivery company can reduce a company's shipping spend by as much as 40%.
Just by eliminating the 85 plus accessorial charges that the national carriers levy, a company can save over 25% off their current shipping costs.
Below are 5 reasons, shippers should consider using a regional package delivery carrier:
1) Increased Productivity - Since regional package delivery companies use ground-based solutions to deliver their packages, they have much greater flexibility in offering their customers later pickup times. They can offer pickup times as late as 8:00 pm and still provide next-day delivery. For shipments staying in the local area, pickups can be made as late as midnight.
2) Faster Deliveries - Because regional package delivery companies are geographically based, they can provide guaranteed next-day delivery for ground shipments to Zone 4 destinations over 600 miles away from the pickup point. And can often save a transit day compared to major national carriers.
3) Aggressive Pricing - Because regional package delivery companies have a specific market niche to fill, they offer rates as low as 40% less than national carriers. Large companies typically have national contracts with discounted rates from the national carriers. But now with the exit of DHL from the domestic market there is no "low price leader" to speak of. As we have seen from the 2009 rate increases, even in challenging economic times, the national carriers will continue to add accessorial charges and raise their rates. It would very much be in the shipper's best interest to find out where their shipping spend lies on the the national carriers discount tiers. They may be able to move a significant volume over to a regional package delivery company, maintain their national discount level and significantly reduce their costs.
4) Accessorial Fees- The duopoly of national carriers have over 85 additional charges (accessorials) that can be added to the base price of you shipments. These include delivery area surcharges, residential surcharges and additional handling fees. They can add as much as 28% to your package rate. Most regional carriers limit their additional charges to a handful of fees such as CODs, Saturday delivery and declared value.
5) Within the Region- The majority of packages shipped by companies stay withing their general geographic region. According to a study done by The Colography Group, 70% of of packages remain within the Zone 4, 600 mile radius of the shipping origin. And, for regional carriers like OnTrac who also service Zone 5, that percentage climbs to over 80%.
Using a regional package delivery company can increase your company's productivity by providing later pickup times, give you a speed to market advantage over your competitors through improved transit times and reduce your shipping expenses through lower rates and fewer accessorial charges.