Rising shipping costs are really becoming a big problem for internet retailers. Stores that offer "free shipping" are eating the extra costs and stores that charge for shipping risk upsetting customers. You can't win...
We have been warning our customers for months. Ground rates are still very reasonable. So if they plan poorly and have to overnight a package, they will end up paying for it. Not much a retailer can do.
We get customers who get upset, but we always tell them, hey it is the price of gas and they understand and still pay.
I'm responsible for the coordination and sending of a Price Increase for a large textile manufacturer. We typically send that out once a year. We've already had three this year and will most likely have one more before year end.
Let's look at this positively. Things are going to have to change!
Those UPS Trucks can back right up to the local McDonalds and syphon off some french fry grease and be on their merry way! :)
|Those UPS Trucks can back right up to the local McDonalds and syphon off some french fry grease and be on their merry way! :) |
I was saying something similar last week. You have to figure UPS is actively looking for alternative vehicles and fuels for their fleet. If they can cut fuel costs it would give them a serious advantage.
[edited by: Rugles at 3:07 pm (utc) on July 2, 2008]
I do a lot of shipping with UPS, and expedited charges have always been high relative to ground. If your machine that you do production with is down, then it's still cheap. If you're just that eager for the latest mystery novel, then it gets into a question of how much disposable income you have.
My biggest store still sees a lot of people paying for deliveries with expedited service they probably don't need. Behold the power of the corporate credit card! It's just up to them...
Deliveries are one of the most wasteful things I know. It's not unusual to see large lorries, almost empty, delivering small parcels. At other times, you'll see three or four delivery vehicles from various services coming to the company on the same day from the same general area.
The delivery industry as a whole would really benefit from a much higher level of cooperation under which, for example, UPS would deliver DHL and Fedex parcels alongside their own, having organised schedules so that vans are full and only one delivery driver does a certain area each day. With their combined fleets and contractors, they should even be able to pick vehicles to more closely match the delivery volume for a route - if there are only a dozen parcels - use a small van or even a fuel efficient car.
I'm afraid that 'higher level of cooperation' would extend to price increases and service decreases as well.
There is no way that one delivery company would ever want another company's drivers handling there packages. Who is responsible for a loss? And I know for a fact that I wouldn't want some of the drivers I've seen representing my company. A couple of those company's have really low standards for dress and cleanliness.
Why not just let the USPS deliver everything and consolidate UPS/Fedex/DHL into fast distribution/fulfillment/supply chain management. All those trucks and all that gas is a huge waste. Post office already goes there ;)
USPS will take 150 pound boxes? And deliver it overnight by 9 am?
No. USPS for some areas is like packaging your goods for a thief. I sent a 2-Day priority package about 4 miles across Chicago...it took 9 days. At least with UPS they just tell me its lost and then pay me for it. Then again, my understanding is that USPS in Chicago is about as bad as they come.
I don't really see the current system as grossly inefficient.
All of those trucks are generally full when they leave the hub in the morning. Any delivery truck on the road would still be nearly empty later in the day no matter how much consolidation you do. That's part of delivering packages.
Sure, you could say "we're already going to that street. Let me deliver that package for you Mr. UPS, but Mr. UPS will still say no because they aren't going to hand their business over to another company.
|I'm afraid that 'higher level of cooperation' would extend to price increases and service decreases as well. |
Not to mention increased finger pointing when a package gets lost of mis-delivered!
Customer: My package was never delivered. I want to initiate an claim for reimbursement.
Fedex: It was lost after we handed off to UPS.
UPS: Our diver handed it off to DHL.
DHL: The recipient refused delivers, so we gave it back to Fedex.
Fedex: No, we never received it back!
Actually, people at the Post Office have told they do this now--they ship their express out with FedEx here. Maybe this is only in certain areas, but I don't think so. According to the post office, this is why their express sometimes isn't very--FedEx will just take USPS boxes off the plane if they need more room for their own shipments. I don't know if this is true or not, but I have been told this by several different post office employees over the years.