The advantage of sending high volume parcels to the USA directly is having direct access to domestic delivery systems. For most, even logistics experts, this means only FedEx, UPS or the postal system.
However, regional delivery companies are offering interesting alternative parcel delivery options with increased coverage, faster delivery and lower costs.
Access to USA regional parcel delivery companies is available to international e-commerce companies - and other high volume parcel shippers to the USA - who send their parcel deliveries directly to the USA via a high volume USA parcel clearance system. Companies who send their shipments via an Consignment Clearance Facility are benefiting from this unique resource.
The rise of small local carriers is a competitive threat to the FedEx and UPS duopoly. In some cases, the USA regional delivery companies also compete with the USPS.
Sophisticated parcel logistics systems easily divert high volume parcel flows to various carriers based on delivery region, cost, and service options. Large volume international e-commerce shipments to the USA can be efficiently routed to strategic injection points for the lowest cost and fastest economical delivery to the USA. For most e-commerce shippers to the USA, this means injections into East Coast and West Coast ports of entry.
Regional parcel delivery companies in the USA are mostly ground only operations but their focus on specific region means they are as fast or faster than FedEx or UPS. They also utilize low cost “independent contractors” and enjoy a significant cost advantage versus the integrators. The competitive threat to FedEx and UPS comes at a time when express volumes are declining and they are increasingly dependent on the e-commerce parcel volumes.
International e-commerce companies can, for example, send large volume parcels flows through and Express Consignment Courier Facility at JFK Airport and access 1-2 day delivery from Maine to Norther Virginia using the following options:
- FedEx Ground
- UPS Ground
- USPS “Parcel Select” Services
- FBA - Amazon
Similar options exist when sending parcels directly to the USA via a west coast ECCF Port.
The regional companies that provide parcel delivery to the major regions in the USA include:
- LaserShip Inc.
- OnTrac
- Lone Star Holdings / LSO
Most consumers have never heard of these companies yet these small regional USA delivery specialists have dropped hundreds of thousands of packages for USA e-commerce heavy weights including Amazon and Avon.
Regional USA Delivery companies are taking market share both due to lower costs and by forming alliances with other companies to offer faster ground delivery.
The current share for the regional USA delivery companies is less than 3% of a total ground USA package market of around $30 billion. Some estimate the volumes of these regional carriers have doubled over the last 5 years. Collectively these companies serve well over half of the zip codes in the USA.
The growth of regional carriers is mainly the result of Amazon. Amazon actively seeks out alternative delivery options and can support local carriers with high volumes to specific densely populated delivery areas. Beyond cost, e-tailers are looking for ways to avoid critical service failures during peak holiday seasons. Having alternative carriers is necessary to reduce the risk associated with using only one or two carriers.
Importing Direct to the USA via Section 321 processes
Jet Worldwide helps international e-commerce sellers understand and implement section 321 duty free import processes. Using a variety of ports of entry and entry types (Express, cargo and type 86), importers can secure and scale their online orders by shipping direct the the USA.
Amazon has turned to the regionals for many of its Prime two-day deliveries sending directly from their regional distribution centres across the country. Not being beholden to a hub, regional carriers are often able to provide a faster delivery at a lower cost.
Amazon can turn on and off mega large volumes to specific zip codes to match the capabilities of a specific carrier. This unique ability will continue to strengthen regional delivery companies in the USA. In a similar way international e-commerce companies are able to route their parcel to USA via strategic east and west coast ports of entry.
Although most regional carriers offer only ground delivery, most were born as local express couriers over 20 years ago for transporting time sensitive documents and other items made obsolete through technology.
