| By Jim Haller | Senior Manager, Parcel Spend Optimization | Chainalytics |
Over the last couple of years there has been a lot of news regarding DHL and their renewed interest in the North American marketplace. In October 2016, DHL launched a new premium service called DHL Parcel Expedited Max. The aim was to offer a quick and seamless 2- or 3-day U.S. delivery at a highly competitive price. Like Amazon, FedEx and UPS, who represent a large portion of the total B2C parcel market share, the DHL product is based on the USPS Workshare product.
USPS Workshare programs are designed to attract outside companies into partnerships with the Post Office. The share programs allow the post office to offer postal rate discounts to third parties that do some of the work for the Post Office. This work can be sorting, providing pickup and other transportation related services. In this example, DHL, FedEx and the UPS pick up, sort, and then inject packages into the USPS network for the last mile delivery to their customers.
In the last two weeks, you’ve probably heard DHL is expanding their offering to “DHL Parcel Metro” also a Workshare product. This new product has two service levels in select markets; Metro Same Day and Metro Next Day. Whether you use DHL Parcel Expedited Max or DHL Parcel Metro, both have Weight/Size limitations (weight up to 25 pounds, dimension maximums of 36” in length, 24” in width, or 84” in combined length + girth).
The names of possible disruptors and new entrants into the U.S. domestic parcel market have been tossed around on a frequent basis. Companies with the financial resources and innovative operating models like Alibaba, Amazon and Uber have the potential to change the landscape, although it seems, not the main focus. Current incumbents are fighting back and making strategic investments in technology, facilities and equipment. They are also investing in or acquiring potential domestic or international startups that may attempt to disrupt the industry.
So what choices do you have today? Of course, you can continue to work with the major national carriers and that is it. Or, you can explore your options and remain flexible as the market changes. Today, your options are increasing. With the right technology and operation workflow in place you can choose to experiment with DHL’s new service offering, talk with regional parcel delivery companies, postal carriers, and couriers. Or you can choose to test out a few deliveries with the new disruptors entering the marketplace.
The choice is yours. If you need assistance in evaluating your current parcel delivery network and want to include a few additional carriers, couriers or disruptors in the mix, we are here to assist with the analysis.
Chainalytics Senior Manager Jim Haller leads the firm’s Parcel Spend Optimization offering, which enables multi-level organizations to reduce costs, improve service levels, negotiate better pricing agreements and generate cost savings of 8-15 percent on their parcel spend.
Read more about how Chainalytics supports our clients’ parcel spend optimization success:
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- (BLOG) The United States Postal Service Increases Holiday Competition with Their Own Peak Season Strategy
- (BLOG) Countering UPS, FedEx Exempts Small Residential Package Delivery from Peak Season Surcharge
- (BLOG) Is the Recent UPS Peak Season Surcharge Announcement Giving You the Christmas in July Blues?
