29th May 2019
I was asked recently about the applicability of a multi-carrier delivery management solution in the US market, given that the number of parcel carriers is much lower than it is Europe. However, the US market has severely changed during the last decade, where increasing e-commerce and new types of delivery companies have emerged and challenged the traditional trio of postal and parcel giants UPS, FedEx and USPS.
How America has gone from a single-carrier to a multi-carrier need
The question of multi-carrier vs. single-carrier was one of minor impact on the shipping costs of US shippers. Whether they were shipping small parcels or in need of freight services, volume shippers found the best rates and service levels through the services offered by the major national carriers, but that is changing. The biggest change will be seen in the American parcel shipping segment, which is dominated by UPS, FedEx and the US Postal Service (USPS), and where the options outside of this trio of giants were traditionally limited and untested.
Driven by the changes in customer shopping habits and service expectations, the growth in the shipping volumes has sprouted new services and new service providers all over the US. Unmarked delivery vans, crowd-sourcing based delivery services and regional parcel delivery companies are few of the industry’s responses to the growing demand. On the other hand, UPS and FedEx are growing the services portfolio to capture a bigger share of the growth. Top that off with the continued price competitiveness, the growth in the needs for return management and that of shipment tracking and visibility and you’ll quickly start to appreciate the level of complexity that is growing in the US market. Navigating all the service options profitably is the challenge that will promote the use of delivery management solutions.
It’s not new, but the need is stronger than ever
I need to be sure to clarify that parcel delivery management solutions are not new to the US market. In the past decade, several solutions emerged to help streamline the shipping process, with an ROI promise that is primarily based on improved process efficiencies and the reduction in manual activities. The proliferation in the American parcel carrier market enhances the ROI case and introduces opportunities for growth for domestic and international parcel shipping.
So while the reasons behind the proliferation in the American parcel carrier market differs from those in Europe, we are already seeing a stronger business case for the adoption of a multi-carrier delivery in several industries.
Text by: Zaid Duwayri, General Manager, Consignor US