In the previous blog, the focus was on one quickly evolving segment of the expedited freight business, the next-day freight segment. In this blog, we will look at some of the forces shaping the core of the expedited services market.

In the past, expedited delivery was all about fast delivery of freight. It was an ambulance or taxi service for freight. Just as the other sectors of the freight industry are changing, so is the so-called expedited freight market. A number of value-added services are being offered to enhance the core product. They include:

• One, two and three-day delivery options
• Guaranteed deliveries
• Time-specific deliveries (in particular for retailers and residences)
• Security compliance
• Security services such as trailers with anti-theft systems

Some services that formerly were value-added are now offered at no charge. With on time delivery so important in this market segment, shipment status information is extremely critical. Shipment tracking on the web is considered a requirement of being in this business. Proactive e mail updates is another necessary feature.

Experienced expedited freight shippers point to several key criteria in selecting carriers. In addition to price competitiveness and service, they include the speed and responsiveness with which the carrier can commit to make the pickup and delivery within very tight time windows (which may be as short as several minutes) and a history of dependability, probably the single most important factor in expedited carrier selection. Coupled with dependability is creativity - - the carrier finds a way to get the job done.

While some short haul air freight business is being converted to truck, the longer haul global markets are still very viable for air services (or truck and air freight in combination). In fact, the major air freight providers are mixing and matching the capabilities outlined above to provide a full portfolio of services.

On January 7, UPS announced that it was launching a simplified global portfolio for shipping air freight, including a substantially expanded express freight option with guaranteed door-to-door service. The feature item in the expanded international express service, called UPS Express Freight, provides “guaranteed time-definite, overnight-to-three day door-to-door delivery including routine customs clearance to major global metropolitan areas,” UPS said.

For less time-sensitive global movements, UPS offers two non-guaranteed alternatives: UPS Air Freight Direct, which is a one-to-three day airport-to-airport service, and UPS Air Freight Consolidated, which is a three-to-five day airport-to-airport service. Both services are available worldwide and offer pickup, delivery, and customs clearance as optional features. Freight shipments may move on either UPS or third-party aircraft, UPS said. With the new services, UPS says, it now becomes the “only transportation and supply chain provider offering guaranteed integrated air freight services in a single portfolio.” Commented Dan Brutto, president, UPS International, “We have designed an industry-leading suite of services that plays to the strengths of each air network and produces a higher degree of choice and predictability than any other company in the air freight industry.”

The three industry leaders, UPS, FedEx and DHL, all offer ground and air services. The growth in e commerce has provided a boost to both truck and air volumes. Consumers are becoming increasingly rate sensitive, weighing the cost of overnight service as compared to three day service at a much reduced rate. Many consumers are demonstrating that they are willing to wait an extra day or two for their book or CD from Amazon.com if it means a cost savings. Shippers require the higher speed associated with air freight and the higher reliability of ground transportation. Clearly there is a place for both expedited truck and air services.