UPS simplifies air freight product selection
UPS said Monday it is streamlining the way air freight is purchased to give customers more options for express delivery or controlling shipping costs, depending on their needs.
The new global air freight portfolio is headlined by UPS Express Freight, an international express service that more than triples the number of express lanes and provides guaranteed overnight-to-three day door-to-door delivery, the Atlanta-based integrated carrier and logistics provider said.
Two other new products, UPS Air Freight Direct and UPS Air Freight Consolidated, are one-to-three day and three-to-five day airport-to-airport services, respectively, with optional pickup, delivery and customs clearance.
The moves are a continuation of the company’s efforts to integrate various acquisitions on the freight side of the company — heavyweight air freight with Menlo Worldwide Forwarding, Overnite Corp. for domestic less-than-truckload, and customs brokerage and freight forwarding with Fritz Cos. — and then converge the operations with its successful package delivery processes to give freight customers the same level of service quality. The new air cargo portfolio is based on giving customers more straightforward options and migrating the technology for booking, tracing and tracking packages to the freight side.
Under the realigned air freight strategy, UPS went from five to three service offerings by giving customers a single shopping window instead of requiring them to go to several different business units — express freight, freight forwarding, express package — to figure out the best way to balance speed and price based on characteristics such as time and transit, guarantees, value-added shipment preparation or customs clearance.
“We wanted to make it more convenient for them by building (cost-benefit understanding) into one portfolio,” explained spokeswoman Diana Hatcher. UPS developed the new product in part due to concerns from customer — especially in the automotive, manufacturing and high-tech sectors — about the rise in express shipping costs, she added.
The products were developed to meet the needs of shippers making long-term strategic decisions to include express air delivery as part of their supply chain network, and companies forced to react to last-minute developments that threaten to delay critical shipments through their preferred transport mode, Hatcher emphasized.
UPS increased its express network capacity by essentially integrating its asset-based airline network with its freight forwarder network managed by the UPS Supply Chain Solutions unit. By sharing the load, the company was able to increase efficiency. Shipments on certain gateway pairs that are tendered through UPS’s freight forwarding arm will not necessarily be booked on third-party airlines, but will simply be placed on UPS aircraft to generate consistent volume levels. Conversely, UPS will route some volume that may normally move on UPS Airlines through preferred freight forwarders to strengthen freight forwarder capability and move express shipments faster on flights that depart sooner than UPS’ schedule.
By leveraging the consistent volumes pumped through its freight forwarder network, “we can provide third-party airlines a level of certainty that their airplanes will be utilized, UPS gains economies of scale and it becomes a virtual network” that the customer perceives as seamless with the company’s brown-tail network, Hatcher said.
UPS’s integrated logistics capability now allows it to give freight forwarding customers a higher level of predictability than they are normally accustomed to the industry, officials say.
“And, of course, when we can achieve economies of scale, that results in competitive pricing for our customers,” she said.
The realigned product offering has special benefit for small package shippers, many of whom are realizing how to palletize their shipments instead of sending them all individually as they become savvier or expand business to more global locations.
Last year UPS created a single global version of its WorldShip small package application and made it available to its heavy-freight customers. WorldShip is used by more than a half-million customers to initiate a shipment, prepare shipping labels, create a bill of lading, and spell out whether the shipper or receiver is responsible for delivery charges and assorted taxes. But small business customers didn’t have access to WorldShip that was quite as convenient to generate freight shipments with the UPS Internet Shipping platform they were accustomed to using.
Now, Hatcher explained, UPS has extended its WorldShip system so that small business can easily generate both small package and freight shipments with the click of a mouse.
On the domestic side, the freight carrier added UPS 3 Day Freight to provide a less costly guaranteed and non-guaranteed domestic freight option for the lower 48 states and Canada. Delivery can actually take three to four days, depending on the origin or destination. The service complements the existing UPS Next Day Air Freight and UPS 2nd Day Air Freight products.
The new product also highlights the ongoing convergence of UPS business units into a one-stop shop because many shipments tendered for air may actually move on the UPS Freight trucking network within the delivery window. ' Eric Kulisch