e-commerce volume, which has left
FedEx and UPS handling larger numbers of
lightweight and sometimes bulky parcels.
Those shipments lack the profitable density
of business-to-business traffic because one
package is usually being delivered to one
residence at a time.
Iyer said shippers would likely turn more
to the U.S. Postal Service (USPS) and to
regional parcel carriers, out of necessity.
According to a Neopost table that is up to
date except for the latest FedEx change, no
carrier applies a divisor below 166. USPS
uses a divisor of 194, and that applies only
to shipments transported more than 1,000
miles.
FedEx did not comment on the reasons
behind the move or its financial impact. T.
Michael Glenn, FedEx’s executive vice president, market development and corporate
communications, said during an analyst call
that the company hoped more customers
would work with its packaging lab to streamline their packaging. UPS and FedEx executives have been pushing shippers, especially
those involved in e-commerce, to eliminate
the excess packaging that causes their parcels
to occupy a disproportionate amount of
space on planes and truck trailers.
The FedEx move, as well as its timing,
caught some parcel consultants by surprise.
Rob Martinez, president and CEO of con-
sultancy Shipware LLC, said he expected
FedEx to announce adoption of dimen-
sional-weight pricing for the “SmartPost”
last-mile delivery product it operates along
with USPS. FedEx has yet to disclose its
SmartPost pricing; UPS employs dimen-
sional pricing for a similar product known
as “SurePost.”
Ampuja of Supply Chain Optimizers
said he didn’t think FedEx would move so
quickly. As a result, he expects UPS to fol-
low suit as early as January. Other experts
said UPS would wait until mid 2017 or
as late as early 2018 to act, noting that its
2017 published rate increases are already,
in some areas, higher than FedEx’s and that
UPS risks shipper backlash if it changes its
divisor threshold so soon. Atlanta-based
UPS, for its part, has said it plans no near-
term changes to its pricing program.
—Mark Solomon
Ford, Hunt, McLean inducted into CSCMP
Hall of Fame
The Council of Supply Chain Management Professionals (CSCMP) honored
past supply chain “disruptors” at its recent annual conference in Orlando,
Fla., by inducting Henry Ford, J.B. Hunt, and Malcom McLean into its newly
created Supply Chain Hall of Fame. Ford was recognized for his success at
implementing mass production ideas and revolutionizing manufacturing.
Hunt was honored for helping to pioneer the concept of intermodal shipping, and McLean for creating the shipping container.
Separately, Massachusetts Institute of Technology Professor Chris Caplice
received CSCMP’s Distinguished Service Award (DSA).
In an acceptance speech that underscored the importance of collabora-
tion, Caplice, who has worked in industry and academia, jokingly referred
to himself as “too much of a practitioner to be a good academic, and too
academic to be a good practitioner.”
What makes CSCMP unique, Caplice said, is that it attracts academics and
practitioners in equal measure. Sometimes, however, the two don’t know
how to approach one another, according to Caplice. He challenged prac-
titioners to buy academics a cup of coffee or a beer, and hear about the
latest research. He also urged his fellow academics to listen to practitioners
and attempt to “solve a really practical problem every once in a while.”
—Susan Lacefield
