Someone to Watch Over You

"Hello, this is Greg Finck from TransGuardian. May I speak to Ellie in shipping?"

"This is Ellie..."

"Hi, Ellie, I see that two minutes ago you logged in a shipment by Express Mail to the XYZ Company in Palm Beach, Florida with a value of $75,000. I was just calling to ensure that you have used the proper security packaging with that."

"Who is this?"

"Greg Finck with TransGuardian."

"Um...we usually speak to Joe Rodriguez..."

"Yes, he's our Manager in Los Angeles. But I'm at the TransGuardian Security Center in Utah, and your shipment just flashed on our screens and pdas, because of its high value. To be fully covered, you need to package that either in a Digital SmartBox or in a 'turtle' with numbered seals. Do you have our security packaging?"

"Yes, Joe provided us with that. But I just put this in a regular box. Should I re-package it?"

"Absolutely, if you want it fully covered. And, Ellie?"

"Yes, Greg?"

"You also put 'Bob's diamonds' in the reference field."

"I did?"

"Yes, you did. That's the other reason I called. If you put any reference to gems, diamonds, gold, or any valuable item on the shipping label, you void your coverage."

"Oh, that's right!"

"So please cancel and re-do your label, use the security packaging, and omit any reference to diamonds in the reference field."

"OK, Greg. And..thank you!"

TransGuardian not only covers the value you declare for high-value packages...our powerful report programming analyzes shipping trends real-time.

When any TransGuardian member ships a package with a declared value over $50,000, our Security Center in Utah receives an immediate flash with all the package-level details.

A TransGuardian representative will then call the shipper to enquire if the appropriate security measures are being taken with that package.

Appropriate security measures include use of a Digital SmartBox or a "turtle" (a blow-molded security case with numbered security seals).

If not, we'll advise you how to get the required security packaging to ensure that your shipment is fully covered.

Also, if there is a pattern of losses with a certain carrier to or through a certain ZIP Code, our programming is designed to detect it quickly. If the pattern warrants it, we can turn off certain carriers to certain ZIP Codes on certain days.

That way, your shipping operator doesn't have to rely on his or her ability to judge the risk of certain destinations or shipping methods; if a loss pattern emerges, that option will simply become unavailable through TransGuardian.

A diamond may be forever...but it should get there overnight...safely.

Now You Can Use TransGaurdian's Label Maker Without Declared Value

Many clients enjoy the benefits of producing online US Postal Service labels with TransGuardian, as opposed to paying a monthly fee for a postal meter.

In the near future, TransGuardian will also offer online labels for UPS, FedEx, DHL, and Canada Post.

TransGuardian's policy is not to mark up freight. So if you have a great rate with one of the carriers, you can continue to enjoy it directly through TransGuardian. Our revenue comes from providing Secure Transit Coverage on the declared value of packages.

However, TransGuardian does have costs associated with the generation of labels. That means we pay a per-label fee.

In order to keep our charges as low as possible and to avoid charging a monthly per label fee, we have decided to add minimum per-label charges for packages with no declared value, as follows:

Express Mail or Overnight with UPS, FedEx or DHL: $0.75
Priority Mail or 2nd Day with UPS, FedEx or DHL: $0.50
First Class Mail or Ground with UPS, FedEx or DHL: $0.25

We believe this will offer our customers continued savings and advantages without compelling TransGuardian to impose monthly or membership fees.

Turn Shipping Labor Hours into Minutes

TransGuardian has introduced a method of batch producing USPS labels that turns hours of labor time into minutes.

If you have order-order taking software, you simply export today's orders to an Excel file (or to a .csv or ASCII file and convert to Excel).

Send the file to TransGuardian, and we'll do the data mapping to enable Batch Upload for your account.

Now you can upload the .csv file in the TransGuardian Insured USPS Shipping Module. The module enters all package level-detail into the appropriate fields to generate a USPS bar-coded label with a tracking number.

Yes, it can auto-fill your internal reference or billing number, too.

Our software presents you with a list of all the packages to be sent with a check box (so you can select or de-select that package) showing the total quotation for each package, including postage and insurance, if any.

It takes 3 seconds per label to turn your order-entry data into the USPS Labels of your choice. So 100 labels take 5 minutes to generate, and another few minutes to print, depending on the speed of your printe.

The Labels are produced in a multi-page Adobe .pdf. That means you can print them one at a time or all at once, and if any page misfeeds, you can simply choose to print that page again.

One large shipper of 50-100 packages per day told us:

We've been spending 5-7 hours per day preparing labels, even before we started using TransGuardian. Now the whole process takes 15-30 minutes. We hit the button, go get a cup of coffee, come back and we're done. Now we don't have to hire more people to handle future growth. All we have to worry about is what to do with the extra 4-5 hours per day!

Factoids from the 2007 National Postal Forum

• The USPS is seeing a significant shift from air to ground packages as ground transit times improve and shippers look to lower costs.

• UPS estimates that it consumes 0.1 gallons of fuel per EACH delivered package. The USPS estimates that it uses 0.002 gallons of fuel per delivery stop (0.75 gallons per stop annually). This is why you don't get fuel charges with the USPS...you get the leverage of the USPS tremendous mail delivery network cutting down fuel costs to a vanishing impact per package.

• The USPS views "reverse logistics" as a great growth opportunity. The USPS can leverage its huge network of drop boxes and post offices to collect packages that consumers want to return to manufacturers or retailers -- conveniently and economically.

• Growth in online postage sales is projected to jump from $1 billion in 2006 to $1.5 billion in 2007.

• Over 70% of USPS packages are shipped a distance of less than 700 miles.

USPS Competitive Trend = Many Advantages to Shippers

One of the most fascinating speakers at the 2007 National Postal Forum was Michael J. Greene, Certified Financial Analyst for Morgan Stanley Research. His said,

The USPS may a more serious competitor to UPS and FedEx.

You, the small-parcel shipper, should be aware of the strengths and weaknesses of all the carriers. There is a place for all of them, but you can save thousands of dollars a year by knowing which carrier is most appropriate for which categories of your shipments.

Driven by e-commerce, the fastest growth in the domestic parcel market is B2C - meaning 1-5 lb packages going to residences. This is the USPS's sweet spot.

TransGuardian Delivers Your Options

By integrating the services of the USPS and the private carriers to our site (http://www.transguardian.com), we bring you the ability to choose any of the carriers’ most advantageous products and insure your small parcels up to $150,000 each.

We bundle these with many other tools and services that put you in greater control of your logistics solutions. Our goal is to keep abreast of the best options in the marketplace for you and then to position those services so that you can access them in ways that are cost- and labor-efficient.

The Players

For perspective, let's compare some of the assets of the USPS and the private carriers:

USPS Manned Drop Off Locations: 38,000

UPS Manned Drop Off Locations: 3,300

FedEx Manned Drop OFf Locations: 1,500

USPS Annual Revenue: $73 billion

UPS Annual Revenue: $48 billion

FedEx Annual Revenue: $32 billion

The drop off locations are important in the rapidly growing e-commerce B2C world, because for return or repair shipments, consumers usually will find a Post Office in their neighborhood, whether their neighborhood is in New York, Puerto Rico, Alaska, or Guam.

And now that the USPS offers free carrier pick up (which you can book online at http://www.transguardian.com/), the playing field is further leveled.

Also important in the B2C world is the fact that only the USPS can delivery to Post Office Boxes; and only the USPS has the legal right put parcels in an actual mail boxes; the commercial carriers must leave parcels “on the porch.”

Priority Mail is the USPS "2-3 Day" product and is most competitive with the ground and deferred air products of the private carriers.

Rate Increases

The New Postal Law that embodies the postal rate change is the most sweeping change in postal regulations in 35 years.

The law does more than raise prices; it also gives the Postal Service to more flexibility create new products and prices in response to fluctuating market demands.

It's true that the USPS will increase its prices for Priority Mail by an average of 13.6%. But the Postal Service hasn't raised rates in 5 years, while UPS and FedEx have increased their ground rates for 1-5 lb packages from 2002 to 2007 as follows:

Total Published Increase: 22.89%
Actual Commercial Delivery Increase: 28.02%
Actual Residential Delivery Increase 37.85%

Also, the USPS does not have accessorial surcharges, like fuel surcharges, residential surcharges, Alaska/Hawaii and Saturday Delivery surcharges.

So, while UPS and FedEx officially raise their rates each year in January, they actually adjust their accessorial surcharges monthly.

Many large shippers at NPF told me that, in their opinion, the private carriers are eagerly awaiting the USPS rate case this summer as an opportunity to hike their accessorial charges and boost profits in the short term. FedEx, for example, begins its fiscal year in June, so this might be a timely move, if it happens, to attempt to support the FDX stock price.

Service Standards

A common complaint about the Postal Service is that it still does not provide the same level of tracking, tracing, and customer service as the private carriers.

But, the USPS has made tremendous strides in this area; for example, its air services are now carried by FedEx, which has caused USPS Express Mail on-time performance to exceed 90%. The online tracking and tracing services with the USPS are improving measurably.

And the improvements are likely to continue. The new law mandates that the USPS can no longer be content with breaking even; it must show a profit.

To hit those goals, the USPS is rolling out new technology. The forthcoming "Intelligent Mail" barcodes will allow for end-to-end visibility through the entire Express and Priority Mail network.

Turf Wars

The USPS is already the low-price leader in many markets. That means it puts a lot of pressure on UPS and FedEx pricing. This is especially true in vertical markets where packages are light-weight, like the gem & jewelry trade and most B2C commerce.

This may pose a real threat to UPS and FedEx. UPS is the dominant player in the ground parcel market, and increasing market share in that segment is one of FedEx's most important goals. Why? Because it is the fastest growing and the most profitable segment.

If the USPS is poised to defend its share of this market and win market share, this means UPS could lose some of its most valuable turf and FedEx could be denied the chance to expand in this area critical to its profit performance.

Conclusion

How does the struggle of giants benefit you?

In the 1970s, when the Cold War was at its height, the President of Indonesia once stood up in a conference of Asian nations and said,

“We must take care that the Soviet Union and the United States do not come to open war. Let us remember that when elephants fight, they trample all the grass around them.”

Then-Prime Minister of Singapore, Lee Kwan Yu, replied,

“We must also take care that they do not become too friendly, for when elephants make love, they also trample all the grass around them.”

The bottom line is that competition is good for you and for the whole market, as long as you pay attention to where new pricing and service changes can benefit you the most.

TransGuardian’s commitment is continually to analyze the changing market and bring you the cutting edge.