DHL finally announced on November 10th that it will stop domestic air and ground service by January, 2009. Rumors had been swirling around the shipping industry for some time about DHL exiting the US market. Many articles and posts have already been written about the layoff of DHL employees (roughly 9500) and the slow down of the economy which is partly to blame. However another group little known victims of the DHL US shutdown are the DHL resellers. DHL was the only one of the three big shipping carriers that used resellers to get small and midsize business. It was a win-win-win for DHL, the reseller and the shipping customer. DHL licensed discounted rates to the DHL reseller and the reseller signed up clients by passing on some of the discount to the customer. In many cases small and midsize businesses were able to get rates that were comparable to the discounts only available to large fortune 500 companies. Another advantage to the customer was the ability to get personalized customer service from the reseller instead of having to call the DHL 800 number; toll free customer service agents are usually entry level personnel. This means that ironically you are speaking with the least experienced person at the carrier when trying to locate a lost item; hence the frustration experienced by most 800 number callers. However with this business model DHL was effectively able to pass allot of their infratructure costs off to the reseller. Imagine the losses had they not done that!!
Regardless of the DHL US down fall this was an excellent business model that would be worth pursuing by either Fedex and UPS or both. This model can help save on infrastructure costs such as billing and customer service and lead to greater customer service satisfaction. Of course the shipping company has to follow through with exceptional service and this was the main problem with DHL US. Towards the end…DHL resellers were being bombarded by customer complaining that DHL did not pick up their packages etc.
I guess we should have all seen his coming when DHL effectively “outsourced”their air shipment to UPS back in May. Oh well…as that famous lyricists once wrote “Another one bites the dust..boom…boom…boom.”
We know from our surveys that small business shippers have specific concerns that they want addressed when looking for a shipping company to handle their shipping needs:
What are the shipping basics?
How to prepare a waybill?
What are the different services?
How should I pack my packages?
How do I arrange for a pickup?
What service(s) do I need for my business?
How can I get the best rate for that service(s)?
We have evaluated the DHL, Fedex and UPS small business centers for their ability to address these concerns in an easy to understand format.
Our overall impression… In our opinion UPS small biz center has the best combination of organization, ease of use and information value in their small business center. They use rich media in a way that enhances the information and address most of the concerns listed above in a way that help the small business shipper understand what UPS has to offer.
The Fedex small business center in an effort to add more value has made their small business center a little bit more confusing than necessary (see below). However we place them second in terms of value that the interface provides to the shipper because they address some money concerns of the small business shipper .
Finally the DHL small business center has a very simple interface (sometime less is more) to internal pages within their website that address small business shipper concerns. This interface addresses most of the above concerns fairly easily.
A word about rates…
Getting rates from a shipping company is the holy grail of the small business shipper. DHL indicates that they provide 10%discount for signup but it does not show the rates. Fedex offers several incentive discounts that eventually expire along with several co-promote specials but again no rate sheet. Finally UPS provides no indication of any discounts or rate sheets.
Sign up for all three
There is no law that say that a shipper cannot have more than one shipping account. We recommend signing up for an account with all three. Get access to the rates and compare the rates against the service. Use one carrier for one service that suits you and another carrier for the other. As your volume begins to grow renegotiate your rates base on your volume.
How to prepare a waybill?
After three clicks we were able to get to the page that provide information on how to prepare a waybill. Waybill Help
What are the different services?
From the small business center we were able to find the different services available DHL Services
However we were not able to find our way back to the small business home page after this.
How should i pack my packages?
Even though we were not able to work our way back to the home page, we were still able to find out about packing our packages from interface. Packaging
How do i arrange for a pickup?
Also we were able to find out how to arrange for a pickup. DHL Pickup
What service(s) do I need for my business?
No real consultation on my business delivery need.
How can I get the best rate for that service(s)?
The website does not show the rates without first signing in and getting and account but the customer is offered a flat 10% off rack rates when they sign up online. This however is no different form what an individual person would get for signing up. There is no expiration for this 10%. DHL Open an account
How to prepare a waybill?
Fedex has a shipping 101 guide that can easily be missed because they keep it under articles and FAQs section. In the shipping 101 they show some screen shots for filling out a waybill online. Fedex Shipping 101
What are the different services?
From the small business center we were able to find the different services available however you might miss it. After clicking on either Express, Ground or Freight you are directed to a page that looks like a advertisement. You are supposed click on the menu items on the right side of what looks like an advertisement and then click on the picture inside you can see the services. We find this very confusing but we are here to help. Here are the links. Fedex Express Fedex Ground Fedex Freight
How should I pack my packages?
Again we almost missed this because it falls under articles and FAQs section (sometimes people don’t realize that their question is an FAQ). However by now we are trained to look for things in the Articles and FAQ section. Packaging Options
How do I arrange for a pickup?
The page for pickup can only be accessed with a Fedex account. However the shipper is told where to go to arrange for a pickup. Fedex Pickup
What service(s) do I need for my business?
They have a solutions tool that walks you through you needs and provides a recommended service. If the tool cannot provide a service then they provide a sales number. Fedex Solutions Tool
How can I get the best rate for that service(s)?
While Fedex does not provide specific rates they do offer several interesting discounts and co-promotions.
15% Discount when you sign up only on FedEx Express® shipment
for 4 months when you use ship manager. After the 4 month period it will reduce to 10%. This is what is known as an incentive to sign up. See our Free Report for Small Business shippers about to sign an agreement.
Now through Dec. 31, 2008, receive 55% off your base rates on LTL (less-than-truckload) shipments of 150 lbs. or more each time you ship within the contiguous U.S., with FedEx Freight or FedEx National LTL.
5% off eligible shipments paid with American Express
Amazon Services will offer FedEx customers five months waived subscription fees, a value of $199.95, to Amazon Service’s Pro Merchant Program.
QuickBooks users can save money by registering for special rates on FedEx Express and Ground shipping.
FedEx and Stamps.com have teamed up to offer FedEx customers a $100 savings with Stamps.com Premier.
UPS SMALL BUSINESS CENTER
UPS has two websites directed at the small business shipper. UPS small biz and the UPS whiteboard. We recommend that you stay away from the UPS whiteboard unless you have allot of time to watch cartoons and click on graphics that do not provide solid information. Stick with the UPS small biz center. The shipping demo video gives very good insight into how their user interface looks. It is informative and worth the time to watch.
What service(s) do I need for my business? UPS also has a solutions finder designed to help you zero in on what shipping services or products you will need. UPS Solutions Finder
How can I get the best rate for that service(s)?
No indication of rates or discounts. UPS OPEN AN ACCOUNT
The following table is compilation of all DHL, Fedex and UPS resources that are available to users WITHOUT first having to create an account or submit information. We find that this is useful to our readers who don’t necessarily want to commit to a carrier in any way while they search for basic shipping information. If we have missed a resource then it is way too hard to find on the website as we have poured over all three.
We have awarded prizes in the following categories: Best International Shipping Guide which goes to DHL for their easy to read and understand primer on international shipping. Best Country Profiles which goes to UPS for their very organized, informative and easy to read country profiles section. Best Free Tool which goes to DHL for their Harmonized Tariff Code/ Schedule B number tool Best Document Library to DHL for their exhaustive compilation of international documents needed for shipping.
Freight shipping involves the movement of large packaging such as pallets or even containers and is usually used by importer/exporters. The table below lists all of the different freight services available from DHL, Fedex and UPS. They are grouped into three sections: Air, Ocean and Ground/Rail. These services mainly address the unique needs of these business shippers such as expediency, security, temperature sensitivity, door to door delivery, consolidation etc.
Two words about freight forwarders
Many international importer and exporters choose to elect a freight forwarder to handle all the details for shipping their commodities internationally. One thing that they should be aware of is that freight forwarders outsource their services and many times use DHL, Fedex or UPS freight services as well for a portion of the shipping-especially if shipping air freight. In the case of air freight you may want to consider using these carriers directly. The nice thing about using these main carriers directly for your freight needs is that a price can be given up front that should not deviate much from the final price. Often freight forwarders cannot tell give a customer a final price because honestly they don’t know what it will be.
Another notable difference between using a freight forwarder and using one of these carriers is that the delivery can be made door to door. Freight forwarders often only deliver to airports. As an importer you always want to maintain a good relationship with your trading company. If they are used to working with freight forwarders it may be to your advantage to continue to use a freight forwarder. However you can instruct your freight forwarder to use one of these shipping carriers and your shipping account to make the arrangements. Having previously arranged shipments through your freight forwarders using their means it would be an easy matter to do a cost comparison of the shipping using one of these carriers. If you decide that there are sufficient benefits to using one of these carriers, you can then try to negotiate greater volume discounts from your shipping carrier by including your import/export shipments in addition to your present shipping volume. Finally and equally important you this would give you better control on the actual final cost of the shipment plus option of door to door delivery if desired.
A changing market outlook…
Importer/Exporters usually are content to allow for a certain percentage of their profit margin to go to shipping and are happy to just pay what is needed. However the United States economy is slowing which means that orders will not be as large and profit margins will suffer. It is usually times such as these when “necessary” costs are more closely scrutinized.
FedEx
Express Freight
Backed by a money-back guarantee.
Freight is
placed on the first flight out.
Airfreight Plus
FedEx Custom Critical
Backed by a service guarantee.
Customized surface air
solutions for delicate, high-security or
temperature-sensitive freight.
UPS
ExpressSM Freight
Day Definite
door to door delivery
UPS Air Freight DirectSM
Day-specific scheduling,
airport-to-airport service, with delivery within one to three days
Air Premium
door to door
UPS Air Freight
ConsolidatedSM
airport to airport only
Consolidation of Freight.
Air Value
Economical
Alternative to Air
Charter
Additional air freight capacity where there is
limited commercial carrier
SeAir
Sea/Air
Service
Combination
of speed of air freight and the lower cost of ocean freight
FedEx
Expedited Freight Services
Blend of
many different services
UPS Air Freight
ConsolidatedSM
Day-specific scheduling,
airport-to-airport service, with delivery within three to five days
Ocean Freight Services
Ocean Freight Good Morning
FedEx Trade
Networks
NVOCC
(Non-Vessel Operating Common Carriers) Series
Full-container
load (FCL) or less-than-container load (LCL) shipments.
Ocean Freight Good Morning
Non
Containerised Load
International Ground Freight
Euroconnect road freight service
Covers all business areas in Europe.
Service for palletised and non-palletised shipments of over 31.5 kg.
Groupage and
Part Load Services
FedEx Freight
Central America, South America, the Caribbean and Europe, as well
as service from Asia
Less than Truckload
DHL EURONET service Pan-European presence
Customised transport
services
Euroline
Shipments within all European countries and across Europe.
Full-load services
DHL COLDCHAIN
European-wide ground transport solution
Fully monitored,
temperature controlled and GDP-compliant (Good
Distribution Practice) network, meeting all customer requirements in
terms of regulation, security, quality and handling
The table below shows the variety of services available by DHL, Fedex and UPS for shipping non-freight items internationally. Let’s take a moment to examine the different services available.
Same Day
“Same day” delivery is available from all three shippers. This service really means that the package will be on the next available flight. If the package is a document and not-dutiable there should be no problem getting the package off the plane and to its destination as if it were hand carried.
Document…to be or not to be…
For international packages customs clearance is an important component of package arrival time. Documents that do not need customs are limited just by flight arrival and delivery. DHL recognizes this and offers a service focused on document or non-dutiable items. The separate treatment of these items contributes to minimal delivery delays. One might imagine that there are probably certain times of day, using DHL Same Day Service, Fedex International Next Flight or UPS Express Critical SM, when a package might have arrived at the same time as with DHL International Document Service at but at a reduced cost.
Are Specialized Services Always Needed?
Along the same lines let’s examine the additional specialized services offered by Fedex and UPS, one wonders if the “expedited” package would have arrived at the same time using DHL Document Service if the package was just a document. While there are definitely instances where dutiable items have time critical arrival deadlines, most time critical international packages are business documents with original signatures. Any other type of documents can be sent by email or facsimile. To pay a premium to insure that documents arrive at 10:30 in 2-3 business days should be considered carefully when a less expensive service DHL International Documents Service may suffice.
An Illustration…
In order illustrate the point let’s take a package leaving New York destined for Germany. The package is picked up in New York by 5PM EST Tuesday (11:00PM German Time Wednesday). This package then leaves Newark at 12:00AM EST on Tuesday Evening (6:00AM German Time Wednesday) arrives in Germany at 5:00 PM Wednesday night where it will be sorted and ready to leave for delivery at 5:30AM German local time Thursday. The chances are very good that a non-dutiable document would arrive in Germany from New York by 10:30 AM on the second day even without the premium service. This should be true if you used DHL International Document Service, FedEx International Economy or UPS Worldwide SaverSM. Of course this all depends on timing and connections however this Gedankenexperiment allowed plenty of time for connections and presumably these billion dollar package carriers have worked all of that out anyway. All three of the carriers have a time arrival estimator which is really a calculation using their established flight plan arrival schedules. This will give you a good idea of when your carrier believes a non dutiable item such as a document would arrive. If there is no advantage in days for using the premium service then it is up to you to decide if you want to pay for the “premium delivery time”.
Dutiable Items and Arrival Time Guarantees
Arrival times for documents or non-dutiable items are usually pretty certain as they do not have to go through customs clearance. Dutiable items are subject to customs clearance and therefore always at risk for delivery delay. While the package may arrive at a specific time at your country, if the customs does not clear it in a timely fashion then the delay is inevitable, in which case the “fault” for the delay is not due to the carrier but to “third party government” influences. Customs delays are almost always paper work problems which can usually be traced back to the shipper. For this reason, the chances of being able to collect a refund for unfulfilled premium service are very small.
The Moral of the Story…
I am reminded of a story that I read in The Undercover Economist by Tim Harford where he outlines how a premium cappuccino does not cost the coffee shop much more than a regular cappuccino but the coffee shop can charge a 25% premium on it because of the perception of additional benefit. A little bit of digging on the part of the shipper may help uncover what flights a package would be on and what service level would be most effective for the shipper. Of course the shipper that actually does that research is few and far between and the carriers know and understand this and so business as usual… Knowledge is power but only if you go after it.
We have reviewed the international shipping guides fro DHL, Fedex and UPS for use by a novice shipper. We have evaluated these guides on the following points:
Content Layout
Ease of understanding for a novice shipper
“How To” instructions provided
Links to Shipping resources openly available without registration.
In our estimation DHL provides the best How To Ship International Guide in the form of their “DHL Guide to Exporting” from all four standpoints. This is primarily because their document answers the following questions in a manner that is easy to understand and complete:
What do you need to start?
How do I distinguish between Document and Non Document item?
What forms are the basic forms that I need?
What kind of shipping resources are available to me?
What services do you provide?
The “Fedex International Shipping Reference Guide” comes in second and the “UPS Navigate International Shipping With Confidence Guide” comes in at a distant third.
The “DHL guide to exporting” differentiation between Document and Non-document item helped push it over the top. Fedex uses a flow chart to differentiate between Document and Non-Document packages that we believe would be confusing to a novice shipper.
Finally DHL won first place because of its inclusion of shipping resource links that are avialable to the public without first registering. These include their “Trade Document Library” which is a treasure trove of additional document that may be needed to export to your country besides the basic documents and “Interactive Classier” for finding Harmonized B and Schedule B numbers. The Fedex guide does not have their own classifier they refer you to an external government site. UPS make referenced to a TradeAbility tools to find harmonized tariff codes but they do not provide a link to it.
From the table below it is easy to see that there are full range of services including standout services that can be available to any small business with multiple shipping accounts. Taking advantage of this full range through a company shipping policy can help reduced shipping costs and maximize efficiency.
Use of Multiple Carriers
Small businesses shippers should have accounts with multiple carriers in order to take advantage of the different service types. Sometimes businesses are under the impression that they must use only one shipping account or that they have to close an account with one shipper after opening up an account with another shipper. It is in the best interest of the business to have account with multiple carriers in order to take advantage of full range of services outlined in the table below.
Standout Services
Two good examples of stand out services are the Hundredweight service offered by UPS and ShipReady offered by DHL. UPS many years ago had a specialty in transporting heavy weight ground packages. Although they have gained market share in the overnight business the Hundredweight category speaks to this specialty. Anyone planning on shipping a one-off heavyweight item would be better served by using a company that has a specialty in that service. DHL ShipReady is a shipping product by DHL that is often under recognized and therefore under utilized. For a fixed price, you can send as much weight overnight as can be fit into their envelope with no pickup charge or residential charge. These ShipReady envelopes come in several sizes.
Does it absolutely have to get there by 8:30AM?
One rule that should be included in any company shipping policy is for the shipper to check with the package recipient regarding urgency. For example, Fedex First Overnight and UPS Next Early AM will arrive the next day before 8:30. This 8:30 service is not offered by DHL. However, as a shipper you should be perfectly clear on whether the recipient is expecting and will open that package at 8:30AM. Sending a package, DHL Next Day 10:30, FEDEX Priority Overnight or UPS Next Day Air, all of which will arrive by 10:30AM might be all that the recipient needs. Who knows…maybe your recipient will not even be at the office until 3:00PM and then DHL Next Day 3:00PM, FEDEX Standard Overnight or UPS Next Day Air Saver would provide the needed quality of service at significantly reduced cost. The same is true for 2nd day service. UPS provides a second day service that arrives by 10:30. However all three carriers provide a second day service that will arrive by end of day. You never know about urgency if you do not ask and the savings can be significant over time.
One final point that we want to make is on the matter of airway bill preparation. Many office workers do not fill out the waybill completely especially when sending overnight letters. If you leave any portion of the waybill empty the carrier will default to the most expensive option. Make sure that anyone filling out waybills knows how to fill them out correctly. For example, if you fail to indicate that the package may be left without a signature (if this is the case) then a signature will be acquired for an extra fee.
In our opinion 
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