DC Velocity - June 2018

20 DC VELOCITY JUNE 2018 www.dcvelocity.com newsworthy

UPS revives program offering 3PLs parcel delivery service
at LTL rates

UPS Inc. has relaunched a pricing program offering third-party logistics service providers (3PLs) an opportunity to move their customers’ shipments through UPS’s small-package network at more economical less-than-truckload (LTL) rates.

Under the initiative, which goes by the somewhat unwieldy name of “Ground Freight Pricing Through General Pricing,” UPS breaks down an LTL pallet and sweeps cartons into its small-package operation for processing and delivery. However, the user—whether it be a 3PL or direct shipper—pays the LTL prices it has already negotiated, which are typically well below what the Atlanta-based company charges for small-parcel services.

The service works best for shippers tendering between 10
and 17 parcels at a time. That’s because it is too expensive
for shippers to tender such relatively small consignments
for hauls aboard a 28- or 53-foot trailer. Though LTL rates
are lower than parcel rates, with all things being equal, a
shipper with fewer than 20 parcels that have been palletized
must bear a disproportionate share of the cost of utilizing
a large truck relative to the volume it is tendering. UPS
launched the program in 2012 by marketing it directly to
shippers. That remains in effect. The initiative was expand-
ed two to three years later to resell it to 3PLs. However,
the expansion stalled out because the technology was not
yet advanced enough to connect the complex UPS rating
and service matrix with 3PLs’ transportation management
systems (TMS).

Toward the end of 2017, UPS executives engaged Cleveland-based IT (information technology) provider Banyan Technology to develop an interface between UPS and the 3PLs’ transportation software to generate a fast and simple data flow to support the product. Banyan’s involvement and execution was the catalyst to kick-start the reseller program, according to people familiar with the initiative.