INTERVIEW WITH
ROB MARTINEZ
The founder of parcel consultancy
Shipware sees higher costs in shippers’
futures—but also sensible approaches
to mitigating them.
“Parceling” out
the future
BY MARK B. SOLOMON, EXECUTIVE EDITOR – NEWS
THE DC VELOCITY Q&A
thoughtleaders
THOSE LOOKING FOR A “STEADY AS SHE GOES”
transport climate should steer clear of parcel. E-commerce’s
explosive growth has translated into enormous traffic gains.
There are all sorts of new ways to get packages into people’s hands. Meanwhile, shippers in the business-to-business (B2B) segment continue to face escalating rates and
ancillary charges as giants UPS Inc. and FedEx Corp.,
which dominate the B2B parcel shipping world, push for
ever-higher revenue.
Parcel consultants like Rob Martinez, all of whom held
executive positions with various carriers before hanging out
their shingles, frame themselves as the shippers’ wingmen.
Martinez has logged 25 years in the business, the last 15
running his own shop, Shipware LLC. Like other consultants, Martinez said his firm can help shippers with a myriad of functions, including assisting—to some degree—in
contract negotiations. In an interview with DC VELOCITY
Executive Editor Mark B. Solomon, Martinez said the deck
is stacked against B2B shippers and it will take creativity and
extra effort (and a little outside help) to win at the table.
Q Several years ago, UPS and FedEx said they would no longer work directly with parcel consultants. How have
consultants worked around that edict, and have the carriers
backed off from that hard line?
A UPS and FedEx will work with third-party consultants for matters unrelated to pricing, provided the consul-
tant, shipper, and carrier sign a three-way nondisclosure
agreement. However, the restriction remains in place for
rate negotiations and third party-led bids. We’ve heard
that some firms have closed their doors, and others have
pivoted to other services. Even if consultants aren’t allowed
to negotiate pricing directly with the carriers, the good
ones can still offer tremendous value in areas like distribu-
tion analysis, dimensional pricing and accessorial impact
studies, RFP (request for proposal) templates, negotiation
strategies, DC site studies, modal/carrier optimization,
automation recommendations, and invoice auditing.
Q UPS has struggled to master its peak season opera- tions in the wake of rapid growth in online shipping.
It’s been suggested the company choose between driving
market share through aggressive pricing and focusing on
improving its return on invested capital at the expense of
market share. Given the current landscape, what would be
your recommendation to the company?
A In 2013, UPS and FedEx dealt with a deluge of pack- ages tendered during Christmas week, severe weather
conditions in several U.S. states, and an abbreviated peak
shipping season. An estimated 2 million packages were
delivered late. UPS delivered exceptional service last peak,
but it came at a cost of $200 million over 2013. UPS is well
down the road in planning for Christmas 2015. While it will
continue to assume the burden of higher costs associated
with holiday deliveries, it will also strive to recover costs
from its customers. For example, high-volume e-commerce
shippers will be assessed a “peak season” residential surcharge this year.
