No Strike, Same Lesson
The sudden shutdown in March of freight consolidator APX Logistics brings July 1997 to mind. That was when UPS workers went on strike. The big difference, of course, was that UPS settled its strike within two weeks that year, and its trucks quickly returned to the road. APX — formerly RR Donnelley Logistics and CTC Distribution Direct, once used by many catalogers as a low-cost UPS alternative — is gone, leaving FedEx's SmartPost as the only comparable alternative.
APX's demise brings to mind the lessons learned from the UPS strike: the need to spread out your ground shipments among several carriers. But since the Postal Service reinvented its Parcel Post service as Parcel Select to give shippers attractive discounts for last-mile delivery from postal destination delivery units (DDUs), few catalogers have shied away from channeling most of their ground delivery packages to either APX or SmartPost, the former Quad/Graphics-owned Parcel Direct.
Since APX's demise, I've asked a number of catalog shippers, logistics providers and consultants how they've gotten through this stunning turn of events. Many catalogers quickly turned to FedEx and the Postal Service to deliver their orders at least temporarily until they could find permanent solutions. But as Jose Li, FedEx's retail industry manager, tells me, it takes a good three to five weeks to set up an account. And although FedEx delivered a number of packages for APX "refugees," Li notes that the carrier's first priority has been to service its existing customers. "We won't sacrifice service to our existing customers for somebody else," he says.
"A lot of catalogers have single sources for parcel shipping," he points out. "We've said it's wise to have relationships with all the carriers. The fallout from APX is a wake-up call to the industry."
One cataloger, who asks to remain nameless, tells me it took about two weeks to get the company's packages moving along smoothly again after APX's closing. "The bottom line: It was chaos, and we're paying a lot of money," the cataloger says.
One zone-skipper, Yes Solutions, which recently began handling shipments for the new Hasbro toy catalog, has kept its catalog clients on a steady diet of multiple carriers and consolidators. As a result, Barry MacMullen, vice president of business development, tells me the primary loss is in certain high-density bulk mail centers where Yes Solutions drop-shipped to APX for lower discounts through DDUs.
If you're considering changing your ground shipping setup, see how one mailer handled such a transition in our case study on Hershey Direct.
If you're an APX refugee, you easily enough can shift most of your packages over to a single carrier. But the sense I get is you'll be better off in the long haul to start spreading those eggs out a bit.
Paul Miller, Editor in Chief
(914) 669-8391
pmiller@napco.com
