Role of Parcel Shipping Consolidators
Continued growth of business to consumer (b2c) e-commerce has increased demand for low-cost package shipping services. Demand for inexpensive parcel shipping is especially intense for online and catalog retailers. These merchants, many of whom primarily ship low-cost goods, face consumers resistant to paying exorbitant shipping costs (often driven up by fuel surcharges, residential delivery fees, etc.) for package delivery to their homes. As a result, package shipping consolidators step in to combine low-cost "last-mile delivery" strengths of the US Postal Service with the technological and operational capabilities generally associated with private carriers.
Large parcel carriers, such as United Parcel Service (UPS) and FedEx, often include an array of accessorial charges (like fuel and residential delivery surcharges) in addition to their standard fees. The US Postal Service (USPS) offers low-cost options for small package delivery to the home, such as Parcel Select and Parcel Post. However, many merchants prefer low-cost shipping options without sacrificing visibility of their parcels while in transit ("track and trace"). The US Postal Service does offer a limited "Delivery Confirmation" for even their lowest-cost package delivery services, but more robust tracking is currently only available for Express Mail service and some international services.
Instead, the USPS has established "worksharing agreements" with parcel consolidators, who pick up a shipper's parcels, sort and route them, then enter them into the Postal system for final delivery. The Postal Services claims parcel shipping consolidators provide "up-front estimates on expected delivery time" and can offer "value-added services," like "customized rates, manifesting, delivery confirmation, billing, insurance, electronic data interchange (EDI), and pickup service." Indeed, most USPS "workshare partners"--from major carriers like FedEx SmartPost and DHL Global Mail to specialty carriers like Streamlite, Argix Direct and Newgistics--provide full tracking and tracing for their customers' parcels.
Read more about this topic: Package Delivery, Package Delivery in The United States
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