Once a man died and, to his surprise, found that he had the choice of Heaven or Hell. An angel showed him Heaven, a place of peace, beauty, and dignified joy. Satan showed him Hell, an endless riot of wine, women and song. A little sheepishly, the man said that he’d take Hell. The next day, he found himself in a chasm of endless fire, gnawing worms, and haunting despair. He complained to Satan, “Where’s your truth in advertising?” Satan smiled and said, “Yesterday you were a prospect. Today you are a customer.”
That’s how it is with your current parcel carrier. Guess who gets all the latest savings and incentives? The company who’s shipping with another carrier!
Logistics is one of the greatest expenses in the gem and jewelry industry. Because many businesses in this trade are small operations, they don’t have the time to analyze various methods of shipping and choose the best. They tend to build a relationship with one carrier or one consolidator and stick with them. That relationship often becomes one of friendship and trust - or so you think...
The problem is that the worst friend you have in the world is the sales rep from your current consolidator or carrier.
The rep already calling on you is that last person to tell you that you are entitled to lower rates, increased incentives, and reduced accessorial charges. Remember, the carrier values the rep based on how much money he or she can charge you, not on how much you can save.
To make matters worse, the big carriers often treat their customers with threats and arrogance. They know shipping is your lifeline, so they badmouth the competition and create a sense of fear.
One customer told us, “My carrier threatened to raise my freight rates if I didn’t insure with them.” Of course, there’s no such provision in the carrier contract, and there are dozens, if not hundreds, of other customers using the exact same association discounts and using third-party insurance within a half-mile radius of this same business. But it shows how the sales rep treats an existing customer: like a hostage, not a valued source of business.
The smart way is to have relationships with the three major carries, UPS, FedEx, and DHL, as well as with the US Postal Service. And let each of them know you have a good rapport with the others.
Having a sole relationship with a freight consolidator is no solution, either, because consolidators have the same motivation as carrier reps – to charge you the most money they can for freight. So they steer you towards the carrier that gives them, not you, the best deal.
What makes you think you couldn’t get the same deal through the carrier directly? Probably nothing but the fact that you’ve never asked.
Listen, if you’re paying $10 per package through a consolidator for UPS or FedEx, guess what? The carrier is charging $9 to the consolidator. Don’t you think that UPS or FedEx would rather have your business for $10 if you worked directly with them? Better yet, if you’re using FedEx through a consolidator, see what you can get through UPS without the consolidator…then go back and ask FedEx to match it.
The truth is, no one carrier is best everywhere. You need the options that all four provide for different circumstances.
That’s why TransGuardian presents all four major carriers, UPS, FedEx, DHL and the USPS, to you through our carrier-neutral website. That’s why we bring you competitive Secure Transit Coverage, Trade Risk Coverage, and Virtual COD…as support services, without marking up freight.
Are rate-shopping and carrier comparison a lot of trouble to go to? Well, we’re trying to make it easy for you.
I was just visiting with a major customer in the Southeast. The purpose of my visit was to further integrate TransGuardan's services to his sales and inventory management software. But the CFO told me, "I want to talk to you about prices after you finish with my IT guys." Well, you know what he had in mind. He wasn't hoping I'd find a way to raise them!
But I had laid down some proposed guidelines for his programmers, choosing less expensive freight options for their various package profiles. They agreed that these would suit their customer expectations perfectly.
When the CFO came back into the conference room in the afternoon, his IT guys said, "We just saved $120,000 a year." Instead of sweating over pricing, we went to dinner and talked about our future together.
If shipping is, in fact, one of your top two expenses (along with insurance), analyzing your options may be some of the most profitable effort you can expend.
Wednesday, May 23, 2007
Saturday, May 5, 2007
The Great Package Race: DHL Smacks the Competition
Georgia Tech’s School of Industrial and Systems Engineering just conducted the 2007 Great Package Race.
The goal was to test the three major private carriers to see which could deliver a package to remote and challenging destinations most quickly and in the best condition.
They sent identical boxes by UPS, DHL and FedEx from Atlanta, Georgia to
The carriers were unaware that the race was even going on. They picked up the parcels April 13, and students tracked them online as they traversed oceans, rivers, and jungles. Some destinations, with no official street address, required last-mile delivery by bicycle!
DHL stomped the competition, delivering first to 3 out of 5 destinations and finishing second at the remaining two. FedEx and UPS each came in first at one destination.
“Most packages arrived within a week or two, but one has yet to be delivered or returned, and the mistakes in delivery were often entertaining,” wrote LiveScience.com “One package was sent back-and-forth across the Atlantic nine times before it was delivered, and another was sent to Costa Rica instead of Croatia.
“And just as in a road race, the sprint to the finish proved the most difficult part of the package’s journey, as packages usually arrived in the general vicinity of their destination, but then finding the exact locale was harder.” (http://www.livescience.com/othernews/070502_package_race.html).
TransGuardian insures DHL, UPS, FedEx, the USPS and Canada Post up to $150,000 per package, because we believe that the informed shipper uses the strengths and avoids the weaknesses of every carrier option.
The goal was to test the three major private carriers to see which could deliver a package to remote and challenging destinations most quickly and in the best condition.
They sent identical boxes by UPS, DHL and FedEx from Atlanta, Georgia to
- Yangon, Myanmar
- Tikrit, Iraq (a center of the Sunni insurgency)
- Floranopolis, Brazil (a small island)
- Harare, Zimbabwe and
- Apia, Samoa
The carriers were unaware that the race was even going on. They picked up the parcels April 13, and students tracked them online as they traversed oceans, rivers, and jungles. Some destinations, with no official street address, required last-mile delivery by bicycle!
DHL stomped the competition, delivering first to 3 out of 5 destinations and finishing second at the remaining two. FedEx and UPS each came in first at one destination.
“Most packages arrived within a week or two, but one has yet to be delivered or returned, and the mistakes in delivery were often entertaining,” wrote LiveScience.com “One package was sent back-and-forth across the Atlantic nine times before it was delivered, and another was sent to Costa Rica instead of Croatia.
“And just as in a road race, the sprint to the finish proved the most difficult part of the package’s journey, as packages usually arrived in the general vicinity of their destination, but then finding the exact locale was harder.” (http://www.livescience.com/othernews/070502_package_race.html).
TransGuardian insures DHL, UPS, FedEx, the USPS and Canada Post up to $150,000 per package, because we believe that the informed shipper uses the strengths and avoids the weaknesses of every carrier option.
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