If transportation and logistics were not such a vital link in the manufacturing supply chain I would write this post about the sad state of affairs in the parcel shipping business as a comedy piece. The fact of the matter is, however, that UPS and the once vaunted FedEx are about as poorly run as businesses can be and, as a result, are most often the weakest link in the supply chains of many, many companies.
If I were to ship a five pound package from my house to Kevin Meyer's, UPS would charge me $38.20 to get it there in two days, while FedEx would hit me up for $36.75. The government will do the same job for $14.57 – in fact, if it fits into one of their flat rate boxes it will only cost me $10.20. But wait, you say, my company doesn't pay that much because UPS gives us a discount. Enter the BirdDog company …
For those of you who don't know, BirdDog is a company that does a lot of things but a big part of their business is to take your UPS bills every month and audit them, then represent you in filing claims against UPS for over-billing, late shipments and lost stuff. They live off of a percentage of the money they recover for you. BirdDog will go after money you sent down the rat hole with any shipper, but they make their bread and butter off of UPS. That alone should be cause for serious concern for UPS leadership. How bad is your company when legitimate, big time businesses exist to make money solely off of your screw ups?
UPS and FedEx offer discounts in the same manner as used car dealers. Just like the slick salesman tells you that the sales manager agreed to knock a couple hundred bucks off the price for you only – and only if you buy the car today – UPS begrudgingly gives its 'best' customers a 'special' rate. More often than not you will find that some guy down the street got the same deal or better at both the car dealer and at UPS. The discount is more an acknowledgment that they have been gouging you all along. … and after you get the discount, it better be 65% or more off the standard rates and you will need BirdDog to make sure they actually give it to you.
Both FedEx and UPS cloak their businesses in a Byzantine maze of rates and zones that leave most shippers mystified. In all likelihood, they are just as mystified themselves with the complexity of their pricing schemes. In the end, however, they accomplish little other than to do what many people believe to be impossible, and that is to make the Post Office look remarkably efficient and cost effective by comparison.
They also open the door to outfits like UShip. Although UShip competes more with the equally customer unfriendly companies that ship larger items, their business model gets right at the same place. Both customers and shippers are fed up with the nonsense that shrouds the shipping industry. UShip is "a sort of EBay for shipping" that does over $20 million a year in billing for shipping stuff that by all rights should be shipped through the formal transportation network. They are like BirdDog in that they live off the incompetence of the shipping companies.
Too many manufacturers play into the hands of UPS and FedEx, as well as the major trucking companies by engaging these silly games with them. Too often there is a freight manager who has taken a long drink of the UPS Kool Aid and thinks all of this nonsense is normal. I strongly suggest that manufacturers throw some serious kaizen thinking at their shipping. If you do, you are quite apt to find that the local post office and UShip are hands down better than anything 'brown can do for you".