Thursday, 21 July 2011

Hostilities escalate in parcel wars – DC Velocity

Growing hostilities
Parcel consultants, many of whom are former FedEx, UPS, and DHL Express executives, have built a cottage industry using their knowledge to guide shipper customers through the often-byzantine world of parcel contract negotiations. For years, FedEx, UPS, and, when it had a U.S. presence, DHL, co-existed with consultants in a reasonably amicable manner. However, the carriers began chafing at the consultants' growing role in negotiating lower rates on their customers' behalf that would impact the carriers' bottom lines.

At an industry conference in late 2009, UPS and FedEx executives went public with their intent to minimize their dealings with consultants. In separate internal policy memos the following spring, they codified that intent, essentially forcing shippers to negotiate directly with them or risk having their contracts canceled and all the pricing benefits associated with the contract eliminated.

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