Delivering the goods: Intense competition among local and national delivery services tends to keep the rates down - Courier Services

New Mexico Business Journal, Jan-Feb, 2002 by Paul Krza

WANT A PACKAGE DELIVERED TO Hobbs? Got a document that absolutely has to be downtown in the next couple of hours? Do you need a day's worth of paperwork shifted to Denver for processing?

You don't have to look far for help--the Yellow Pages are full of listings offering delivery services, an intensely competitive business in the service sector. Your biggest problem may be in finding exactly who can best serves your needs--the fastest, least expensive, most reliable or perhaps with the biggest reach.

Even in this age of electronics, the need for paper remains. At the same time that zillions of bits and bytes bounce around the world via the Internet, boxes of transaction records, checks and an array of documents travel the low-tech, highway path in the dark of night.

"We're moving tons of paper, all day long," says Stephen Greigo, president of the Albuquerque-based Distribution Management Corporation, one of a dozen-plus companies offering delivery services. Most of it is from banks, dispatched daily to central processing centers, and transported largely from 4 p.m. to 7 a.m. Canyon State Couriers, for example, has a contract to pick up checks and other paper transactions from the 60-plus Bank of America branches scattered around New Mexico.

But it's not only paper. Companies move merchandise and catalogs, auto parts, drug-test samples, construction bids, radiators, electronic components and pharmaceuticals. "What pharmacies have found is they don't want an overstock of goods," says Kathleen Lo Sapio of NebArk Courier in Albuquerque. Instead, when demand materializes, they get the desired drugs delivered overnight, she said.

It's almost a "you name it, we deliver it" situation. Hot Shot Services transports electronic components from its warehouses, fresh flowers and even tropical fish. Several companies shuttle blood and other medical specimens across town for testing. NebArk delivers veterinarian supplies statewide and tech products to Los Alamos.

In this era of downsizing and centralization, many larger firms and public institutions have found it's more cost-effective to shift delivery duties to specialty companies. As schools in New Mexico cut budgets, things like science materials are purchased in bulk and kept in central distribution centers, delivered when needed, notes Mike Markiewicz, the operations manager at Hot Shot Services in Albuquerque.

Some of the companies run regular routes, sending scheduled shuttles for example several times a day back and forth between the Duke City and Santa Fe. Some operate around the clock, seven days a week. A few are "mom and pop" operations, with only a handful of vehicles. Others, like Canyon State Couriers, ply the roads with a fleet of small Toyota trucks, or in the case of DMC, own not only ground vehicles but also aircraft. Most concentrate on smaller parcels--envelopes filled with documents, boxes weighing generally from 10 to 30 pounds and up to 75 pounds. "We take about anything that fits in a van," says LoSapio, And size matters--dimensions of a parcel are often as critical as weight.

The local and regional parcel delivery services compete with the giants, pitted against the likes of longtime heavyweights like UPS, FedEx, Alrborne and the venerable Postal Service. The big guys play their cards close to their chests, generally declining to reveal for instance what percentage of their business is in envelope delivery. UPS is the largest, pushing its ability to deliver to "virtually every address in New Mexico," UPS Albuquerque-based manager Alan Wilson says. The company works closely with a bunch of shippers, offering volume price breaks to regular customers, he said.

Feisty Airborne Express tries to undercut the competition with lower prices, boasting on its Internet site that once a company signs up they can expect discounts. A cost-calculator at the site compares Airborne rates with competitors, with Airborne the cheapest. "We're really known to be the most cost-efficient provider," says Robert Mintz, public relations supervisor for the Seattle-based company. He credits a very lean structure in management and using refurbished aircraft for deliveries as key operational factors.

But FedEx Community Relations spokeswoman Carla Richards brushed off the low-cost Airborne claims as "apples and oranges" comparisons. The cost doesn't reflect reliability, and that's what companies expect when they are sending high-value, time-sensitive goods, she said. FedEx scans a package up to 20 times and drivers constantly download the information to central computers. To bolster its claim as "most reliable," FedEx offers two money-back guarantees--if a delivery is more than 60 seconds late, or if a customer's call on package status isn't answered in one-half hour, Richards said.

FedEx has also targeted small business at its website, offering ten percent discounts to firms that sign up online and do their subsequent shipping business via the Internet, she added.

With all the choices and competition out there, finding what works for your business offers a challenge. Hot Shot's Markiewicz suggests a quick analysis of your specific needs should make it a bit easier to choose a delivery company. Among the considerations: Is 24-hour, seven-day-a-week availability important? Does your business require regular pickups and drop-offs? Are you looking for overnight, same-day or "right-away" delivery? Will you require additional services, like air connections? Do your packages have unusual dimensions? How much of a priority do you place on safety security and reliability? Is an ironclad guarantee essential?