August 30, 2004, 12:00 AM

New shipping options are delivering savings

(Page 2 of 3)

DHL made one of the most noticeable changes in the shipping market last year, when it absorbed the ground shipment operations of Airborne Express and established a new U.S.-based web site, DHL-USA.com. Now, in addition to offering several online shipping tools, it promotes its expertise in handling international shipments, including automated figuring of cross-border duties and taxes, as well as domestic ground shipments. On the domestic front, in a deal with the Postal Service called DHL@Home, DHL lets customers schedule online pickups that DHL delivers to a Postal Service distribution center for the final leg of local deliveries; the @Home service is designed to automatically figure a route, including the most advantageously located USPS distribution center, to provide the lowest overall delivery charges, says Martin Mosley, director of small and medium-sized business for DHL Express.

DHL offers a series of web-based services for different sizes of shippers. Its smallest customers, regardless of how much they ship, can use WebShip, a service accessible through DHL-USA.com, to print out web-based shipping labels and arrange for pick-up and deliveries. Shippers can also set up an account to be billed for shipping costs, and they can maintain online customer address lists to avoid having to re-key information for repeat customers, says Bin Shih, director of external customer e-commerce for DHL Express.

Larger retailers-those that process $50,000 or more in shipment volumes per month-may opt for DHL’s SwiftShip service, which shippers can use to integrate DHL’s shipping applications over the web with their own enterprise software. The SwiftShip service coordinates with online order management to provide shippers with real-time shipment rates, shipping commitments, tracking numbers and shipping label images for printing. DHL provides the system integration, which can take up to a month, at no extra charge above shipping rates, Shih says, adding that DHL will also provide two to three hours of employee training.

The differences

UPS and FedEx, already formidable competitors, are making their own plays to expand their holds on the shipping market. UPS, for example, has more than 90 software and services partners that link order management and other business software into UPS Online Shipping Tools. FedEx has built a reputation for handling unusually large delivery products, such as when it arranged with Amazon.com Inc. to ship 250,000 Harry Potter books in a single day last year.

FedEx offers web-based shipping services through its FedEx Insight, Ship Manager and Global Trade Manager programs. Insight is a hosted application that lets shippers view the status of shipments without needing a tracking number; they just enter either a shipping account number or company name and address. Insight also provides automated alerts through e-mail, fax or wireless transactions regarding delays or missed deliveries. Ship Manager and Global Trade Manager are more complete software packages that include shipment tracking, scheduling, invoice payments, shipment label printing and information on cross-border duties and taxes.

Online retailers can also integrate Ship Manager and Global Trade Manager with their order management systems-an option that quickens the processing of shipping labels, says Russ Fleming, director of marketing for FedEx.com.

FedEx recently acquired Parcel Direct, a shipping consolidator that picks up packages from retailers and forwards them to the Postal Service for local delivery.

The Postal Service lets retail shippers schedule package pickups online as part of its Click-N-Ship service at USPS.com. A postal carrier will then pick up the packages at the scheduled time to bring to a local Post Office for shipment. Its Click-N-Ship service also lets retailers calculate shipments for individual packages, then print out shipping labels.

The Postal Service also provides alternatives for getting lower shipping rates. Under its Parcel Select program, a retailer can drop off packages for shipment at different points along the mail stream, the closer to the final delivery point, the lower the shipping rate. Locations of drop-off points can be found on USPS.com.

One? Or more?

The choice to use one or more shipping providers varies by retailer. The End Records uses a hosted e-commerce software suite from NetSuite Inc. that integrates its order management application directly with shipping software running on UPS servers. When customers enter their shipping addresses on TheEndRecords.com, their information is automatically entered into UPS’s shipment management software. That not only saves Katsambas’ staff from spending hours re-entering shipping addresses and other information into a shipping application, but it also provides for more accurate data, cutting down on the need to find misplaced orders or to correct inaccurate invoices.

After customers click a button to choose their preferred delivery option, The End Records is able to print out packing slips and shipping labels simultaneously on single sheets. The forms, printed with the exact address information entered by customers and accurate shipping and product prices, are designed to let employees easily separate the shipping label portion for applying to the outside of a package, while the remaining packing slip, or customer invoice, is placed inside the package. “The system lets us process orders faster, so we can do more per day and get better volume discounts that we pass on to customers,” Katsambas says.

The NetSuite shipping application, UPS Shipping Integration operates with NetSuite’s e-commerce software platform. The annual subscription to NetSuite ranges from $1,200 to $10,000. In a new version of the shipping module, retailers will be able to enter account numbers for multiple warehouses, so that online orders will automatically configure shipping labels for the most appropriate warehouse based on a customer’s requested product and ship-to location, says NetSuite senior product manager Baruch Goldwasser. NetSuite expects to develop similar modules to integrate with other carrier services, he adds.

Tying to Drop Shippers

While The End Records uses a turnkey system from NetSuite and UPS, the larger Tool King opted to use its IT department to modify a $200,000 Microsoft Great Plains e-commerce software platform to integrate its order management application with UPS and several vendors who provide drop-shipping to online customers. The drop-shippers, who also use UPS, have access to Tool King’s online orders and integrated UPS shipping rate and routing information.

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