Expedited Shipping: ''We Need It Yesterday!''
Business is a blur for expedited carriers, and that's just the way shippers like it.
Gary Garrison was building seats for Chrysler minivans in St. Louis when the call came. "Do you want to run some lights for a band?" asked his friend. "It only pays beer."
That modest offer spawned a career in show lighting for Garrison, as well as a continual challenge: how to quickly move expensive and complex lighting equipment from one venue to another safely and efficiently.
"At any given moment, we likely have equipment being flown or trucked somewhere," says Garrison, senior purchaser at the rentals division of Christie Lites, a stage lighting business focused on both rentals and production services. The company, based in Orlando, Fla., serves the theater, concert, trade show, television, film, industrial, and special events markets.
Garrison's situation isn't unusual in the expedited shipment business, where moving impossible loads at breakneck speeds is all in a day's work.
As shippers struggle to meet delivery needs and deadlines, expedited carriers fight their own headaches managing a whirlwind of different cargo types, load sizes, customers, and distances—all synchronized against a ticking clock.
"In some situations we receive a 90-second phone call and have 90 minutes to make a pickup," says Andrew Clarke, president and CEO of Panther Expedited Services, Seville, Ohio. "Other orders might have a longer time frame—moving more than 1,000 miles cross-country—but still within a short pickup window."
The expedited industry is also changing. Carriers now face growing customer demands for value-added services such as delivery guarantees, security compliance, and time-specific deliveries.
"Expedited service is no longer just a matter of moving products quickly," Clarke says. "A whole range of service options are now involved."
Expedited shipping differs sharply from traditional freight delivery, notes Steven Roy, president of The Expedited Alliance of North America (TEANA), a Philadelphia-based shippers trade group. "It involves a higher level of service and communication," he says.
Expedited carriers are typically called in when the supply chain snaps. "A machine or truck breaks down and materials are lost; that's when shippers look at expediting as part of the supply chain process," Roy says.
Given the nature of the expedited business, carriers usually don't get much lead time or leeway.
"Most shippers want answers within five to 15 minutes of their call, as well as a time commitment," Roy says. "If a carrier says it will pick up at 4 p.m., then it has to pick up at 4 p.m., or customers view it as a service failure."
Most expedited carriers serve a variety of industries and many freight types. "We handle high-end medical equipment to general manufacturing—aircraft engine parts, plastics, printing, electronics, and fashion," says Frank Perri, executive vice president of Pilot Freight Services, Media, Pa.
While some expedited carriers focus on a particular type of freight, such as pharmaceuticals or auto parts, Pilot prefers to be a shipping generalist. "We specialize in service and transit times, not in commodities," Perri says.
Lites, Action, Expedite
Christie Lites turns to expedited shipping whenever it needs to move equipment between cities in less than 24 hours. The company also depends on rush shipments if a critical piece of equipment fails.
"We use a lot of electronics, so we always face the potential for failure," Garrison says.
Christie Lites selected Pilot as its expedited carrier based on its global presence. The company also felt that Pilot was capable of supplying safe and efficient service in both regular and expedited delivery modes.
"Our equipment is expensive—some pieces cost upwards of $40,000," Garrison says. "Saving money isn't the ultimate goal; we want to have trust in our expedited carrier."
Christie Lites' contract with Pilot calls for one-, two-, and three-day delivery options. "If Pilot fails, we don't pay," Garrison says. "But, unfortunately, a service failure also means we don't get what we need."
A missed delivery window threatens Christie Lites' ability to adhere to the theater's most hallowed pledge: the show must go on. "We simply cannot tolerate late or missed deliveries," Garrison says.
Businesses evaluating expedited shipping services need to consider factors beyond price. "Look at the value—what the carrier is willing to offer for a fair price," Garrison recommends. "If you choose a carrier by price alone, you risk getting burned."
Christie Lites needed a carrier it could depend on for the long haul in terms of both distance and time, not "local carriers and freight forwarders that operate for a few years, close up shop, then re-open under a new brand," he says.
Gotta Be There
Chuck Jakubchak, transportation sourcing manager for General Electric, Fairfield, Conn., likes to think of himself as a facilitator—the guy who helps company managers find the most appropriate carrier to transport a specific type of freight.
"Everyone has different needs," he says. "Some people want fast and expensive, some want slow and cheap."
When a manager needs a product to move somewhere in a hurry, Jakubchak turns to Panther, or one of the four other expedited carriers GE works with, to make the delivery. He uses several criteria to form a carrier recommendation that he passes on to the manager.
"Price competitiveness and service are important," he says. "Then there's a pecking order—first go to one carrier, and if they can't help, try the next, and so on."
Jakubchak doesn't worry about delivery guarantees. "The carrier is in business because it delivers like it's supposed to," he says.
He notes that the expedited carriers GE works with have proven their reliability over many years.
"The most important thing is ongoing business," Jakubchak says. "We have faith that the carrier will continue to perform because it has done so, on an ongoing basis, for years."
The best expedited carriers work quietly and efficiently without generating unnecessary attention. "Most transportation occurs at night—you wake up and your freight is there," Jakubchak notes.
Like Garrison, Jakubchak feels that price isn't the most important criterion when selecting an expedited carrier.
"If you don't have reliability, price doesn't matter," he says. "Price gets shippers interested in a carrier, but the main deciding factor is ongoing, repetitive, dependable service."
The expedited shipping business is evolving to meet customers' changing needs. Value-added services, such as time-definite deliveries and security, are becoming as important to expedited carriers as their core time-sensitive delivery services.
"Expedited transportation used to perform like an ambulance service," says Clarke. "But that has evolved to where shippers rely on expedited carriers to provide extras along with high service and reliability levels."
Security services, such as trailers with built-in anti-theft systems, are typically offered to shippers with high-value, time-sensitive shipments, such as jewelry makers and fine wine wholesalers.
"It's important for these shippers to have tight security because millions of dollars of freight ride on the back of a truck," says Clarke.
Time-definite deliveries—a commitment to arrive at a site at a specific time—are becoming more popular as expedited shippers and carriers increasingly synchronize logistics activities.
"In the past, making a delivery on a certain day was all that was required of carriers, but that has changed," says Kevin Collins, senior vice president of business development at Velocity Express, an expedited shipping firm located in Westport, Conn.
Many health care industry shippers, such as hospitals and nursing homes, have long required the delivery of pharmaceuticals and other products at specific times in order to meet patients' needs.
But a growing number of other companies, including retailers and those with just-in-time manufacturing commitments, are now also demanding time-definite service.
"Just showing up on a particular day with 100 boxes of inventory won't help a retailer," Collins says. That's because a growing number of retailers use part-time help to handle incoming deliveries.
"It is not in their best interest to pull a sales clerk off the floor to meet a delivery," Collins notes.
With fewer people at home during the day, time-definite deliveries are also becoming popular with consumers.
"For residential deliveries, an increasing number of customers require time-specific service," Pilot's Perri says. "A consumer expecting a delivery of a large appliance, for example, will likely demand a delivery time frame."
One service option that began as a value-added feature is now offered at no extra charge by nearly all expedited carriers: shipment tracking. Pilot, like most expedited carriers, lets customers track shipments on its Web site.
"Customers can track and trace, run reports, and customize information into a spreadsheet," says Perri. "They can view all key data about their shipment and use what's important to them." Pilot also offers a program that automatically pushes delivery data to customers via e-mail.
End of the Road
The biggest obstacle facing most businesses that need to ship products in a hurry is finding a carrier they can rely on. In fact, reliability is the attribute GE's Jakubchak most values in an expedited service provider.
"When you go home for the day you want to know that you can count on the carrier to do just what it said it would do," he says. "You expect the carrier to back up its commitment in accordance with your expectations."
When evaluating an expedited carrier, Jakubchak examines the company's business record. "Year-over-year business growth speaks volumes," he says.
Jakubchak also prefers carriers serving a diverse customer base. "If their customers are not all in one vertical market, that says a lot," he notes. "It means the carrier is not locked into one niche and is more likely to understand your business."
Companies also need to periodically analyze their carrier relationships.
"Look hard at what you get for the money you spend," says Christie Lites' Garrison. "If you are driven only by price, your expectations better be low, because you get what you pay for."
It's hard to fairly evaluate an expedited carrier on the basis of other customers' recommendations. Businesses need to test-drive carriers directly.
"Take a broader approach and evaluate performance over a period of transactions, not just one transaction based on the quote of the minute," Garrison says. "Price will always be important, but shippers need to make a carrier decision based on long-term relationships."
Growing carriers are best suited for expedited deliveries.
"When companies are growing, they tend to focus on the customer," Perri contends. "When carriers are stagnant or involved in mergers and acquisitions, they tend to focus more inwardly—they don't always have the customer's interests at heart."
TEANA's Roy believes shippers sometimes take expedited carriers for granted, despite the critical role they play in daily commerce.
"Expeditors work behind the scenes," he says. "They are creative, energetic people who help shippers meet their need for speed every day."