Deliver: Four Carriers, Four Directions: What Services are DHL, FedEx, UPS and USPS Working On?
DHL, Plantation, FL
A growth area for DHL has been its DHL Global Mail division, which owns all of DHL's work-share products. The division changed its name Jan. 1 from DHL Smart & Global Mail.
One product is DHL@home, a business-to-consumer delivery service offered through a partnership with the U.S. Postal Service. DHL picks up, sorts and delivers parcel shipments via its network to the postal facility nearest the consumer, and the USPS performs the last part of the delivery process.
DHL@home offers service for shipments up to 70 pounds from businesses to U.S. residential locations, including P.O. boxes. It offers standard delivery in two to four business days and deferred delivery in two to seven.
Multichannel merchants and e-commerce companies drive the need for the product, which has seen 100 percent growth year over year, said David Marinkovich, senior vice president of marketing and customer service at DHL Global Mail.
"These companies are trying to drive solutions into their business that make them more competitive," he said, adding that DHL will introduce an add-on product to DHL@home later this year.
Another growing area is the DHL Smartmail and Globalmail products, one-stop solutions for high-volume mailers. They rely on DHL GlobalMail's global distribution network of 40 processing centers that provide secure distribution of business correspondence, direct mail, catalogs, publications and parcels. Services include online tracking and reporting, address correction, mail activity reports and chargeback systems.
The SmartMail product offers two- to five-day or three- to 10-day delivery options for businesses mailing items up to 1 pound. Prime users are catalogers, print and fulfillment companies, mutual fund companies and healthcare companies. This business has averaged 25 percent to 28 percent growth over the past five years, Marinkovich said. DHL plans value-added services around the core product.
The DHL GlobalMail product is growing, too. It offers an international mailing service to businesses for parcels weighing 1 to 4 pounds - up to 55 pounds in some countries - to 220 countries and territories. And it offers priority delivery in four to eight days, standard delivery in seven to 14 days and economy delivery in more than 14 days.
The company is expanding, especially in Southeast Asia because of an affordable postal parcel shipping option introduced last summer for e-commerce and mail-order shipping to Asia.
The product lets e-commerce and mail-order retailers send dutiable and non-dutiable packets and parcels up to 55 pounds with delivery times of five to six days to Singapore, six to seven days to Japan and six to nine days to Hong Kong, Taiwan, Thailand, the Philippines, Indonesia, Malaysia and Brunei. Parcels move through network hubs in Singapore and Tokyo.
Along with improved transit times, the parcel product features track and trace, customs clearance and a returns notification service that informs U.S. shippers about shipments that couldn't be delivered.
Marinkovich said DHL GlobalMail would begin offering similar products to other countries.
Another area of interest is DHL's import service. Last year, the company launched DHL Import Express, which lets customers send or receive documents and packages of any size, weight or value to and from 210 countries - packaged in one solution using one company, one currency and one invoice.
Targeted industries include manufacturing, automotive, textile, electronics, pharmaceutical, aerospace and financial services. To promote the program, DHL began an integrated campaign last summer that included direct marketing, print and online advertising and internal and external microsites.
FedEx Corp., Memphis, TN
FedEx aims to ramp up SmartPost. FedEx SmartPost takes advantage of the USPS Parcel Select service. With it, companies can enter packages deeper into the mail stream and receive reduced rates because delivery zones are skipped.
The service offers full domestic coverage, including P.O. boxes. Businesses mailing packages up to 70 pounds can get two- to seven-day delivery. It costs less than FedEx's Ground service, which offers two- to five-day service and services such as tracking and delivery confirmation.
SmartPost delivers to 6,000 local post offices serving more than half of the U.S. population, 29 bulk mail centers and 300 sectional center facilities.
"We will continue to open facilities as long as the volume is there and operationally it make sense," said Bram Johnson, executive vice president at FedEx Ground. SmartPost has more than 200 customers, including major apparel retailers, online gardening companies and personal healthcare providers.
Other FedEx Ground options also would interest direct mailers, catalogers and online retailers. One is FedEx Home Delivery, which costs more than SmartPost but offers a one- to five-day service to shippers as well as a money-back guarantee, evening delivery, service options such as appointment delivery and end-to-end online tracking.
FedEx also has fully deployed its latest scanning technology, STAR III, to FedEx Home Delivery contractors. The scanner operates with lasers for faster, non-contact scanning of barcodes and eliminates paper delivery records by incorporating a screen that lets recipients sign for their packages. The scanner uses wireless technology to transmit this information directly into FedEx's network, "providing customers with real-time capture of delivery information and signatures on fedex.com," Johnson said.
Another area of interest for FedEx Ground is its flagship commercial service, also called FedEx Ground. This offers one- to five-day delivery for businesses shipping packages of up to 150 pounds.
FedEx Ground also is expanding its network. The network in North America includes 29 hubs, nine automated satellite sites and nearly 330 local satellite sites with a daily pickup capacity of 3 million packages. FedEx Home Delivery operates from 303 locations comprised of 119 standalone operations and 184 facilities shared with FedEx Ground.
FedEx has invested $600 million in the past two years to add capacity to process 700,000 additional packages daily. FedEx expects to invest another $1.6 billion over the next four years to add six hubs and eight automated satellites, expand 20 existing hubs and relocate more than 200 FedEx Ground and FedEx Home Delivery facilities. The company expects this to boost daily pickup capacity to 5 million packages.
A focus for UPS this year is its Trade Direct service, which combines cross-border movement of freight and packages to eliminate the need for warehousing. UPS Trade Direct streamlines the supply chain by making it easier to move goods directly from international factories through customs to multiple locations in the United States or Europe.
UPS offers three modes of Trade Direct services: Ocean, Air and Trade Direct Cross Border, for trucking between Mexico, Canada and the United States. Trade Direct offers one point of contact, one shipping invoice and shipment visibility across every transportation mode.
In the most common application, individually packaged goods are picked up from an international manufacturer, labeled for their U.S., Canadian, European or Mexican delivery and then consolidated into one freight shipment. The goods clear U.S. Customs as a consolidated unit, which then is unloaded, and the individual packages or pallets are routed directly for final delivery.
Lands' End uses Trade Direct for all of its custom-order shirts, according to UPS. Instead of shipping the shirts to Dodgeville, WI, for another step in the fulfillment chain, it sends them directly to customers' homes/offices.
"It's all about removing segments of the supply chain for more efficient distribution," said Carl Strenger, UPS vice president of e-commerce technology sales.
UPS upgraded Trade Direct last summer. The improvements let customers use a common computer application to process freight and package shipments. They also allow freight movements, including less than truckload, to be tracked at UPS.com. The enhancements help customers check the status of their goods in transit and reduce the time needed to prepare shipment labeling and customs documentation.
New features added to Trade Direct let companies track small packages and large freight around the globe through one Web-based system. The new Web capability is based on software known internally as Flex Global View. UPS initially deployed the software in its supply chain services to give corporate supply chain managers insights into the whereabouts of large freight shipments. But the feature lets Trade Direct customers locate shipments directly from UPS' Web site.
This year, UPS is focusing more on Web-based trade management tools that were launched and updated last year to help businesses manage their customs clearance process for package shipments. The tools are TradeAbility and Quantum View Manage.
UPS TradeAbility helps international shippers identify specific country tariff codes to calculate duties necessary for customs clearance; generate cost estimates for duties, taxes and transportation; and locate compliance information for 34 countries.
Quantum View Manage, UPS' package visibility service, was enhanced to help U.S. importers clear shipments into the country, audit cleared shipments for correct classification and electronically archive shipment data. The system expanded to 22 countries after debuting in the United States last year.
U.S. Postal Service
The U.S. Postal Service is developing products and services to help companies target direct mail, tailor messages to ensure they are relevant to recipients and deliver the mail in a timely fashion.
One big push in the coming years will be address quality. George T. Hurst, USPS brand manager of direct mail, said that companies use sophisticated tools to predict the relevancy of their message but "when it comes right down to it, there is still a lot of work that can be done on address quality."
The postal service is outfitting its sales force with an Optimizer Response CD, which lets customers calculate the costs of making a mail piece, such as creative, ink, paper and postage. They can use their own costs or the averages supplied in the CD. They also can input their expected returns - on response rates and the averages they would receive if they were using USPS address tools such as NCOALink or CASS regularly.
"The numbers sometimes are staggering," Hurst said. "It's not about lost addresses. It's about lost sales."
As for address quality products, he said mailers should think about the Big Four:
· CASS-Certified Address Matching Software: CASS improves the accuracy of carrier route, five-digit ZIP, ZIP+4 and delivery point codes that appear on mail pieces. "This helps you get all of the address elements in your list correct," he said.
· National Change of Address Link (NCOALink): This makes change-of-address information available to mailers to reduce undeliverable mail pieces before mail enters the mail stream. That's important because 14 percent of the U.S. population moves every year.
· Address Change Service: ACS provides a cost-effective way to obtain accurate change-of-address information for business mailers.
· Address Element Correction: AEC corrects and standardizes address elements. Address Element Correction II is the next generation, which uses Delivery Force Knowledge software to correct errors in addresses that are not correctable by existing programs.
Hurst said the USPS may work with the mailing community to devise new standards on what business mailers need to do to qualify for a certain rate.
"For the automation rates you have to use NCOALink every six months, and you only have to do it on First-Class mail," he said. "But we are thinking of either requiring that on a monthly basis or applying it to various classes of mail."
The USPS also is watching small business.
"We know that this is a great niche for us," he said. "We serve this market better than anybody, not just on the advertising mail side but the package side as well."
One initiative, "Grow Your Business" days, teaches businesses how to create compelling messages to draw in customers. The workshop shows customers how to create and send mailings from their own lists, use digital images and messages on original postcards that they can buy and send via NetPost Premium Postcards online. First tested in Sacramento, CA, the program is to roll out nationwide this year.
Neither is the USPS neglecting big businesses.
"We are going to have a really big push by the sales force selling direct mail and the advantages of it," Hurst said. "It's going to be almost two-thirds of the effort in the coming year."
The "Branding Through the Mailbox" initiative started last year, targeting large companies and ad agencies.
"On the general side of the ad agency, they are usually the ones that get the branding exercises, and they really don't consider mail," he said. "They think of television and radio, and that they need to get the brand out there to a lot of eyeballs."
The USPS also is working with Postal Customer Councils nationwide to create a list of mail service providers for posting on the USPS' direct mail Web site.
Hurst said the USPS is doing more promotions around its NetPost services, including NetPost Premium Postcards, NetPost Mailing Online and NetPost CardStore.
Another USPS initiative is Customized Market Mail, a postal classification begun in 2003 that lets direct marketers mail nonrectangular pieces without an envelope as long as they meet certain requirements: Pieces may weigh up to 3.3 ounces and measure 12 by 15 inches and 0.75 inches thick.
Prices are based on Standard Regular and Nonprofit Mail basic tier rates, plus a residual shape surcharge. Postage rates for these mail pieces are 57.4 cents for Regular Standard Mail and 46 cents for Nonprofit Standard Mail. CMM must be drop-shipped to destination post offices, thus avoiding mail-processing operations. Hurst said postal officials are looking at ways to enhance the product and lower the mailing cost.
The USPS also is concentrating on repositionable notes, which are allowed on letter- and flat-sized mail sent at discount First-Class, Standard and Periodicals rates. A test of this feature is set to end April 3, though a one-year extension has been requested. The added rate for RPN-bearing mail is 0.5 cents for First-Class pieces and 1.5 cents for Standard and Periodicals pieces. RPNs also must meet standards, including:
· They must measure 3 by 3 inches, plus or minus one-eighth of an inch.
· There can be no phosphorescent or red fluorescent colorants.
· They cannot be manually affixed.
· They must be adhered with a three-quarter-inch strip and placed in a manner that doesn't interfere with the piece's delivery address, rate markings or postage.
· They cannot display a specific address or ZIP code, though general landmarks may be referenced.
Lastly, the USPS is spotlighting OneCode vision, the concept of a single enhanced code combining tracking, mail sorting, address changes and postage payment in one format. Barcode sorters will read the data to deliver the mail piece and request services such as Certified Mail Service, Registered Mail Service and address correction services.
The enhanced barcode lets the USPS encode 31 digits of information that will include digits for unique tracking, ZIP code and to identify services wanted by a business customer like the Confirm and Address Change Service. Confirm lets mailers know when their customers receive fulfillment orders and know in advance who is returning payments. Financial institutions, credit card companies and retailers use Confirm.
"When people use Confirm in a multichannel campaign, they want to know when that mail is going to hit so they can time their TV and radio around it," Hurst said.
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters