FedEx driver Ted Jerman started his shift yesterday by cramming 130 Christmas parcels into a small van in precise order so he would waste no time on one of the busiest home-delivery days of the year.
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| Darrell Sapp, Post-Gazette Mike Wodzinski of Ben Avon works at Federal Express' facility in Aleppo on the "slide" area, where a package handler helps direct future deliveries to some 50 different routes. Click photo for larger image. Online graphic: See a comparison of shipping costs for FedEx, UPS and DHL.
Clock ticking for online shoppers |
This week and next is the busiest time of year for package delivery companies that are fiercely competitive and growing from a surge in online shopping and a new excursion into the retail market. On Monday alone, a record 3.8 million packages were picked up around the country by FedEx Ground, the Pittsburgh-based truck delivery division of FedEx Corp.
Without even including online buying, an estimated 88 percent of all Americans will ship something somewhere this year between Thanksgiving and Christmas, according to a survey by 3M, a maker of packaging materials.
United Parcel Service, FedEx and DHL, which acquired the former Airborne Express, have all added trucks, airplanes and temporary workers such as Ted Jerman to handle the crush of cardboard boxes that comes during the holiday season, when business is 33 to 50 percent higher than normal.
New this season is the broad expansion of branded delivery-company storefronts -- literally thousands of outlets meant to capture retail business from consumers and small businesses who do not qualify for volume discounts negotiated with larger shippers. Those stores also offer a potentially lucrative new service, packaging goods before they are shipped.
UPS began the consolidation of the packing and shipping business by buying the Mail Boxes Etc. franchise chain for $190 million in 2001. It is in the midst of renaming the 3,700 locations the UPS Store.
"This is the first time a consumer had a branded storefront presence by a major parcel carrier," said Satish Jindel, a Pittsburgh-based transportation consultant.
"It used to be that you could walk into Mail Boxes Etc. and choose between UPS, FedEx and Airborne Express -- all the carriers," he added. "Now, they are UPS stores so you ship with UPS."
FedEx followed this past year by spending $2.2 billion to buy Kinko's, the 1,100-store chain known for its office and copying services, and renaming it FedEx Kinko's Office and Print Centers. Kinko's staff was trained to offer FedEx Express and FedEx Ground services and safely pack cartons in time to roll out a new packing service for this season's rush.
Not to be left out of the competition, the U.S. Postal Service is trying to make it easier for people to ship packages through a new Internet service called Click-N-Ship.
It allows customers to weigh packages at home with a bathroom scale, log onto the Postal Service's Web site, www.USPS.com, to figure out rates, create and print a label and schedule a mail carrier to pick up the package at home the next day.
"We're really stepping into the 21st century," said Pittsburgh Postal Service spokesman Tad Kelly, who estimates 100,000 packages have been mailed in the Pittsburgh region this year through Click-N-Ship. "It's doing very well."
Although the big delivery companies operate air freight services, most packages still move by less expensive trucks through sophisticated networks. Packages are sorted in depots with computer-aided equipment. Drivers can use global positioning systems to help find their way, and they carry hand-held computers to track parcels.
Yesterday, Scot Love left the FedEx Home Delivery depot in the 79 North Industrial and Research Park near Sewickley with 200 packages and a schedule of 160 stops, more than he's ever done in a single day.
"This is our Alamo. The soldiers are coming at us and we're going to get it done. Texas wins today," said Jamie White, a FedEx delivery contractor and Love's supervisor, as drivers headed for their snow-covered routes.
"It couldn't be more exciting than this time of year. We have set records the last three weeks and this week will be another record," FedEx Ground President and CEO Daniel J. Sullivan said yesterday.
"It's not by accident, either," Sullivan said. "There's a lot that goes into this during the year so when we hit our volumes we are prepared."
On Monday, FedEx Ground's peak day, Judy Quashnock rushed into the FedEx Kinko's shop on Washington Road in Bethel Park with two packages to send to her son in Portland. They were only the first wave of presents she will send to Oregon before Christmas.
"I'm such a procrastinator," Quashnock admitted as she filled in her packing slips and mulled over the shipping options.
All the shippers have been aggressively advertising this season. DHL, the largest express carrier in Europe, has run a series of cheeky ads trying to position it as an alternative to UPS and FedEx.
It signed a deal with an association of independent mail and parcel service centers to offer express and ground shipping services. Dan Coll, whose family owns three Hometown Mail Centers in the Pittsburgh region, said small businesses like theirs could get squeezed by UPS' and FedEx's new foray into retail outlets if not for their ability to offer more than one shipping service.
"We have monitors facing the customer showing all of the carriers and their rates," Coll said. "So they can pick and choose which best serves their needs," he said.
DHL spokesman Jonathan Baker calls UPS and FedEx a "duopoly" that is begging for competition. FedEx Ground started in Pittsburgh as RPS in 1985 with the same goal, taking business from the industry leader -- UPS.
Sullivan, FedEx Ground's founder, said he takes his new rival very seriously. "They're in the marketplace and anyone who is calling on my customers, I look at quite sharply."