DELIVERY SERVICES

Virtually every business owner makes use of delivery services in their operations. For some companies, reliable, timely deliveries of parcels, letters, and documents are an essential element of their overall business practices. For others, delivery services are needed only occasionally to distribute contracts, business proposals, financial records, and other business materials.

At one time, the United States Postal Service provided virtually all mail and package delivery in the United States. But today's business owner has a number of choices when it comes to delivery/courier services. These choices range from major international carriers such as Federal Express, Airborne Express, DHL Worldwide Express, the United Parcel Service, and the aforementioned U.S. Postal Service to companies that provide regional services. Moreover, these options are relatively inexpensive, due to the fierce competition that characterizes the industry. As a matter of fact, delivery services have become so competitive that overnight and same day delivery services have been the norm for many business operations since the mid-1990s. As one United Parcel Service executive told Brandweek, "It's no longer an issue of overnight, but rather what time of day." Indeed, all of the major players in the delivery industry offer some type of same-day delivery program.

As competition for delivery dollars has increased, so have the technological advances and innovations offered by delivery companies. These technological innovations are apparent in all facets of company operations, from the sophisticated operational equipment used to separate and track parcels to customer service operations that enable clients to utilize new technologies to monitor the location and status of every package.

WEIGHING DELIVERY OPTIONS

• When selecting a delivery carrier, business experts urge companies to consider a wide range of factors. "Shippers should look closely at what each parcel carrier can offer and decide how much real value each service brings to the shipper's business," said Dwight Sigworth in Air Cargo World. "For the shipper, that also means taking a close look at your own business and deciding what your needs are. Only then can you make the crucial link between your bottom line and the services that are available." Specific considerations in this regard include the following:
• Are there alternative means of transporting the materials without incurring the expense of a delivery service? For example, some documents can be faxed for a fraction of the cost of physical delivery, and electronic mail can be used for many corporate communications.
• What sort of materials constitute the bulk of your company shipping needs? "Parcel shipping has an array of special considerations that are usually not part of the picture in either the document shipping business or the industrial heavyweight line," pointed out Sigworth. "Shippers are not going to consolidate overnight letters, for instance. But the parcels that may weigh as little as five pounds or 20 to 30 pounds are the target of the package carrying industry's greatest service and rate incentive programs."
• Where does your company send most of its parcels and/or documents? Shippers who routinely send packages cross-country or overseas generally make arrangements with services that offer single-zone pricing structures, but regional shippers can register significant savings by enlisting in zone-based rate programs.
• Does the service offer discounts to companies that drop off parcels at the carrier site?
• Does the service have drop boxes located in convenient locations?
• Does the delivery service charge fees based upon package size, in addition to package weight? This can be an important consideration if your company's parcels are even of moderate size.
• What degree of parcel/document tracking capability does your company require? Companies that deliver materials to rural/remote locales typically look to major carriers offering universal coverage. In addition, businesses that ship time-or content-sensitive materials also typically enlist the services of companies like UPS or Federal Express, which can provide clients with detailed information on shipment data. "Web based tracing and tracking, while still considered a value-added service among many transportation providers, has become a standard offering in the package delivery business," wrote Tim Minahan in Purchasing. "That has small-package firms rapidly adding new functionality to their Web sites to put more information in shippers' hands and to differentiate themselves from their competition."
• What value-added services does the delivery company offer, and at what price? "Major package carriers … act as transportation companies, freight forwarders, and customs brokers rolled into one, handling everything from package pick up and delivery to customs clearance," observed Minahan.
• Do you want shipping data integrated into other operational aspects of your company, such as inventory management? Major carriers offer systems that can aid clients in this regard, although some experts warn that such arrangements can tie businesses to one carrier to the exclusion of others.
• Which delivery options are most cost-effective for your company? In today's fast-paced business environment, overnight delivery is immensely popular with small and large businesses alike, and same-day delivery guarantees have proven profitable for many regional carriers. But many letters and parcels simply do not have to be delivered in such short time spans. Savvy business owners often look to more economical two-or three-day delivery plans instead. These options provide shippers with time-definite guarantees at a fraction of the cost of same-day or next-day services.

FURTHER READING:

Brown, Ann. "Saving on Next-Day Delivery: The Right Mailing Service Can Reduce Your Office Expenses." Black Enterprise. December 1996.

Coleman, Lisa. "Overnight isn't Fast Enough." Brandweek . July 31, 1995.

Minahan, Tim. "Strategy Shift Pushes More Business to Parcel Carriers." Purchasing. March 26, 1998.

Rice, Marc. "Competition Fierce in Complex Business of Delivering Packages." Marketing News. May 22, 1995.

Sigworth, Dwight. "How to Choose a Package Carrier." Air Cargo World. March 1998.