“Freight Freak” John B: Cutting Cost with Hybrid Delivery
Posted by AMS / Wednesday, May 9, 2018
The cost of small package shipping is continuously on the rise, going up every year. As demand for these delivery services increases so does the cost of fuel, labor and overhead. Leading the pack with these increases are the Duopoly: FedEx and UPS. Fortunately, there other ways to reduce shipping and freight costs, such as hybrid shipping services.
What is a hybrid shipping Service?
A hybrid shipping company will pick up packages from a client’s facility and move them upstream to a final delivery service such as USPS. The final mile delivery is done by either USPS or another service that has the resources to do it cost effectively. Typically, this works well for companies that have a large number of packages to ship daily.
Fortunately, hybrid shipping services have benefits that make the transition worthwhile. The main perk in shipping through hybrid methods is that they tend to have much cheaper shipping rates than comparable ground services. Here’s an example of a lightweight package being shipped from California to a residence in either NY or FL:
This is a deeply discounted rate set. The two lowest cost shippers are hybrid services.
Hybrid shipping isn’t for everyone.
Hybrid shipping services are one way to save freight dollars but it’s not always going to be the best option for every shipper. Everyone has their own requirements and pretty much must adhere to their customer expectations.
Time In Transit
A primary disadvantage of most hybrid shippers is that it tends to be slower than the traditional Duopoly’s ground delivery. This is because all the hybrid companies either take an extra day processing packages or transporting from one sortation hub to another before injecting into the final delivery service. Each hybrid shipper has a little different process depending on the resources they have to work with.
Another down side can be tracking and tracing. It must be accurate and reliable. We have experienced delays in seeing a package move through the scan points. This is mostly due to the hand off to multiple carriers and/or different technology platforms that need to talk through the delivery cycle. Not all hybrids have the means to track door to door. When this part breaks down it can lead to more customer service calls.
Hybrid shipping lends itself well to the smaller and lighter packages that are generally best suited for the post office, while heavier packages are ideal for Duopoly. Therefore, packages that generally do well are between 1-5 lbs., and in most cases you don’t have to worry about the dimensional weight but must stay under a 50” length and girth.
Beware that not all Hybrids are created equal. Some may claim to be able to provide service levels that they just can’t. Especially when it comes to their tracking systems or transit times. There are several smaller hybrid companies that will sell you on being able to give as good or better service as the larger shippers. Be sure to check out references, visit their operational terminals and run ship tests ahead of time before going live.
At AMS hybrid shipping is one of the fastest growing shipping programs. Even with some of the negatives, hybrid shipping can still work very well for your shipping needs. It will certainly help save your business a lot of money.
About the Freight Freak:
John Bevacqua is the VP of Logistics at AMS Fulfillment. His area of excellence is in creating distribution and fulfillment operations that function as a capable interface between suppliers, retailers, and wholesale distributors. His experience includes developing and leading FedEx/ Kinko’s Distribution Services into the FedEx post acquisition, USA Wireless Technologies, and a top Logistics Management company. He has also worked with third party fulfillment companies, preparing him for his current position with AMS Fulfillment.