As e-commerce and its burgeoning mobile and social segments continue to change the landscape, presenters for FedEx, UPS, the United States Postal Service, and DHL reflected on where their respective companies are and where they’re going during PARCEL Forum 2017 last week.

With their 50 allotted minutes, each covered much of the same ground, reminding attendees – their customers – that the retail landscape has changed and they’re changing with it.

In particular, FedEx and UPS are breaking out of the transportation silo, their representatives said. Their presentations focused on their “do everything” product and service portfolios, with a noticeable focus on encouraging shippers to expand their future growth to the “world stage.”

And with nearly 82% of respondents to PARCEL’s 2017 Carrier Performance Survey – an 8% year-over-year increase – expecting growth in transportation costs to outpace revenue gains in 5 years versus today, of course carriers are looking to diversify as a way to differentiate from each other while their rates and accessorials seem to grow in parallel.

(Coincidentally, FedEx announced its 2018 rate increases the day before).

“To remain competitive, FedEx is evolving from being transportation-centric by expanding its value proposition” to leveraging the data it has and collects, said Carl Ausmus, SVP of E-Commerce and President and CEO of FedEx Cross Border.

Businesses shipping parcel care less about the carrier’s brand. For a carrier like FedEx to stand out in the competitive landscape against UPS, USPS, and regional carriers, it has to provide value to its customer in three ways, Ausmus said: by affecting demand generation, supporting conversion, and ensuring repeat business for the seller.

The buyer typically doesn’t know which carrier is handling the delivery until the truck arrives. Only then does FedEx’s brand start to matter – when the recipient’s experience becomes tied to the carrier the seller chose – and can lose a prospective repeat buyer for its customer.

“Going forward, FedEx has an agile strategy that reflects the rapidly changing e-commerce landscape through a portfolio of transportation networks,” Ausmus said.

Responding to the Amazon Effect

Across sessions, the role of consumer shopping behaviors and expectations emerged as a central theme, just as they have at other recent industry trade shows – omnichannel shopping, more delivery options, no additional costs among them. (Cue the ever-present references to the “Amazon Effect”).

In recent months, the carriers have moved rapidly to match expanded delivery expectations: FedEx established a pickup/dropoff partnership with Walgreens as part its Onsite program while the UPS Access Point Program includes Circle K convenience stores in the Southeast.

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“Online shoppers want choice, control, convenience – and they want it cheap,” said Ken Watkins, a district marketing director for UPS. “UPS is evolving to meet market needs with personalization and access. We’re trying to help you grow, not just save you on transportation.”

“UPS is not just shipping, but in the problem-solving business.”

Watkins highlighted the carrier’s emphasis on market research for customers and its ever-growing list of products and services, including:

  • UPS i-parcel and iGlobal for international shipping
  • Temperature True
  • Mail Innovations
  • UPS MyChoice and Access Point Program
  • Ongoing expansion of Saturday ground delivery and pickup
  • UPS Returns Manager

“The fact is, our world is changing and changing fast,” Watkins said. “We must keep up. UPS is doing it.”

The Unanswered

What wasn’t addressed also was interesting, given the parcel-centric audience in Nashville.

In that same PARCEL survey, respondents complained most about accessorial charges (36%), pricing (16%), service failures (9%), and customer service response (7%) – none of which were discussed in these carrier-led PARCEL Forum sessions.

Furthermore, respondents who have modified their primary carrier this year cited better pricing as the driver in two-thirds of those decisions, according to the survey.

So if you’re wondering the effect recent carrier moves like peak season surcharges and 2018 rate increases will have on your business, you’re not alone.

It’s important to understand how your rates are affected and how you can mitigate their impacts before they take effect. With the industry’s only simulation engine, VeriShip’s parcel intelligence platform provides risk-free, personalized impact analyses for the peak season and 2018 GRI.

All you have to do is ask.

Ross Reed is VeriShip’s president.

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