You have heard of dimensional weight
pricing. Haven’t you? It is format of measurement where freight
transporters bill your packages according to its estimated weight
tallied by the length, width and height of the package.
E-Commerce retailers and shippers are
against it, but the carrier companies say otherwise.
While the dimensional weight pricing
might have impelled the shippers to be intelligent of their packaging
to reduce the size and keep it as minimal and necessary as possible,
there are other significant changes in the shipping universe, worthy
of taking note.
UPS and FedEx the carrier giants, have
taken an extreme fondness to the U.S. Postal Service (USPS). If you
are foraging for a reason, the answer is very simple and
straightforward. USPS is significantly cheaper and effective for
group shipments and UPS and FedEx have not missed out on noticing
that.
In 2014, it was recorded that FedEx
alone, on a daily average daily, gave USPS about 2.2. million
packages to deliver.
As for UPS, in 2012, it had made a
delivery of 37 million packages through USPS.
The post office, though pressured is
taking up the packages, because it is trying to meet its own ends.
The recent economic crisis in Europe
has provided certain advantages for carrier companies like UPS and
FedEx.
On one side we have FedEx making all
the right moves with its submission of regulatory filings to the
European Commission to thorough the purchase of TNT Express,
headquartered in Netherlands. FedEx is acquiring TNT Express for
nearly $5 billion. On the other, UPS is constructing a
state-of-the-art temperature-controlled distribution centre to
transact shipments of pharmaceuticals and medical products.
In June 2015, UPS invested $40 million
toward its expansion agendas in Nuremberg, Germany. UPS is going to
use this facility to sort packages coming from and going to South
Eastern Europe.
FedEx is busy taking care of its new
gateway facility at Copenhagen Airport in Denmark. This facility will
facilitate inbound and outbound shipments for Denmark, Norway,
Finland, and Sweden.
Since 2011, FedEx has opened 11
stations in the Nordics region.
UPS is using an algorithm called Orion
– a heuristic software, which is being engineered to manage the
stops and distance routes of delivery trucks, increasing fuel
efficiency and margins.
FedEx and UPS are steadily bringing up
new advancements, both in technology and facilities. The question is,
whether retailers and shippers will be asked to shell out for these
expenses in the names of new shipping modes.
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