As it happens, FedEx and UPS
have become the regionals’ best mar-
keting tools. “The strategy of the big
two has opened the door for region-
al carriers to get a more welcome
reception from shippers than they
have in the past,” said Douglas O.
Kahl, a consultant with TranzAct
Technologies Inc., an Elmhurst, Ill.-
based transportation consultancy.
and UPS.”
Heurung said most of Spee-Dee’s busi-
ness comes from FedEx and UPS cus-
tomers disenchanted with the rapid pro-
liferation of accessorial charges that can
significantly drive up the total shipping
tab. “People are simply sick and tired of
the add-on fees that they continue to pile
on,” said Heurung, noting that the
increases in accessorial fees are in many
cases outpacing the hikes in transporta-
tion charges.
THE REGIONAL DIFFERENCE
The regionals don’t pretend to be all
things to all shippers. They don’t have the
resources to map out a national footprint
supported by the high-tech tools
demanded by many large shippers to
manage their shipment visibility. The U.S.
Southeast—and particularly Florida—
currently lacks any significant regional
carrier presence.
While there are no firm figures because
the regionals are privately held, it is estimated the sector’s total revenue is about
$500 million a year, a fraction of FedEx
and UPS’s total annual revenue of about
$90 billion. On average, UPS moves as
many packages and envelopes in two days
as the largest regional carrier will handle
in a year.
In addition, regional carriers can’t gain
much traction among larger shippers
because they already enjoy significant vol-ume-based discounts from either FedEx
or UPS. As a result, the regionals focus on
small to mid-sized shippers who often
lack the leverage to get price breaks from
the two giants.
However, the composition of the
regionals’ networks allows them to do
what FedEx and UPS generally can’t or
won’t do: provide next-day ground deliveries at distances up to 400–450 miles,
and do it without an abundance of accessorial charges. FedEx and UPS, by contrast, require their customers to upgrade
to costlier air services if they want a shipment delivered the next business day at
those distances.
For example, Phoenix-based OnTrac,
which serves eight Western states, charges
a tariff rate of $5.99 for delivering a package the next business day from Los
