The movement of the packages from point A to point B, which really isn’t rocket science, has now become very complicated in that the primary carrier in the United States has made it very complicated to figure out what it’s going to cost.
From the late 1970’s until today, what’s changed is the competition marketplace – not just the increased growth of FedEx for the development of statics or the development of FedEx ground systems from RPS in the early 90’s, but it’s been influx of for the ability of companies like DHL to offer a global mail product within the United States, or third parties utilizing carriers – competition for delivering packages has growth greatly.
The ability take different services and tailor them to what the customer needs has also been another great change in the industry. Going back 20 or 30 years, the bulk of the businesses that moved goods across the country via the the parcel carriers was primarily business-to-business movement. With the growth of eCommerce, that now is driving double-digits plus growth each year.
Today the consumer has a choice of getting a package delivered at home, the office, having it rerouted while in transit, or delivered to a local location for pickup. So we’ve moved to a world where initially it was customer places an order, the shipper ships it and the customer gets it to a model where the customer is telling the shipper when, where and in a number of cases how to ship a package.
That’s a big change – the consumer is more empowered in that relationship than ever before.
Over past few years we have seen Amazon able to offer many more things – not only in terms of product, but in ways to customer can get that product; different services in a very customer centric fashion. Amazon is forcing other businesses that wish to provide goods and services to the consumer to come up with new methods that will equal the competition, and then to try to determine which ones will better than the competition.
At the end of the day, as volume and density grows and shippers have to figure out ways to get products to their customers faster, a multi-billion dollar industry made up of couriers are becoming more and more of an integral part of the company’s distribution strategy. As businesses grow, it becomes economical for shippers to use couriers, even though most folks did not even understand what their relevance to distribution was several years ago.