Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
It's been standard practice in the parcel-shipping world for decades: A so-called third party, so named because it is neither a shipper nor receiver, uses a fulfillment house to store, pick, pack, and ship inventory. Carriers like UPS Inc. deliver the package and bill the third party, usually a merchant, for their services. Each third party has its own account number and its own set of pricing based on its unique shipping characteristics.
It's been a pretty good deal for everyone, except for the carrier. That's because large e-tailers with steep discounts would direct their fulfillment houses and so-called drop-ship vendors to use their third-party billing account numbers when their discounts were higher than those available to the actual shipper. While the carrier's cost of service didn't change because of the billing itself, its revenue would shrink because of the higher discounts the third party brought to the table.
Parcel carriers eager to win and keep business would offer third-party billing options knowing that discount cherry-picking existed, and that the risk of fraud was greater because a supplier could ship packages on behalf of its customer and to other consignees besides those that belonged to its customer. The third party would then receive its bill with shipping charges levied on transactions unrelated to it. UPS would be brought in, at its time and expense, to help resolve the conflicts.
Third-party billing was not a problem for carriers when it was a small part of the overall business. Today, however, third-party billing accounts for about 9 percent of UPS' and Memphis-based rival FedEx Corp.'s annual domestic revenues, due largely to the explosive growth of e-commerce transactions. At UPS alone, 11.64 percent of its shipments and 7.9 percent of its net charges are third-party billed, according to a source who asked not to be identified and who has access to much of the company's data. UPS moves more than 18 million pieces a day across its worldwide system.
In mid-October, UPS took action. The Atlanta-based giant imposed, effective Jan. 4, a 2.5-percent fee on all third-party billing services—the first time it has ever levied such a charge. FedEx does not have a similar fee, but given that the two companies frequently act in lockstep on pricing matters; that they have a virtual monopoly over B2B parcel traffic; and that there would be little visible downside for FedEx, no one would be surprised if it followed suit.
Susan L. Rosenberg, a UPS spokeswoman, said the new fee is designed to cover the overhead associated with managing these types of transactions, especially as e-commerce activity generates more of them. The current pricing structure underprices UPS' services in relation to the costs associated with providing them, said Rosenberg, noting that there is an "inappropriate level of volume discount" applied to a third-party billing transaction, and that UPS "incurs costs for which it may not be properly compensated."
Rosenberg said UPS always works to match incentive programs with a customer's shipping characteristics. She added, however, that "we're also going to get the percentage to cover overhead when it's a third party with smaller volume, where it costs us more to serve."
Those who will likely feel the most pain are small merchants who will now be forced to absorb a new charge on top of the carrier's regular annual rate increases. But any third party will likely sit up and take notice. Beyond trying to eliminate discount cherry-picking, the new charge is designed to modify customer behavior, according to Robert Persuit, director of business development of ShipMatrix, a unit of transport consultancy SJ Consulting. Persuit said UPS wants to migrate transactions away from third-party billing to a prepaid structure, where the fulfillment house become the payor and the merchant pays the house, thus eliminating UPS from any after-the-fact involvement. Persuit said prepaid billing is much simpler and less costly for UPS to understand and makes it easier for the carrier to quantify the costs of its service.
UPS CEO David P. Abney addressed the issue—albeit obliquely—during an Oct. 27 analyst call following UPS' announcement of its third-quarter results. In response to an analyst's query, Abney said the company wants to expand the third-party billing service in response to rising customer demand. Users benefit from "inventory handling and transportation savings associated with the service, as well as an ability for them to offer a broader line of products to both businesses and household consumers," he said.
Satish Jindel, head of SJ Consulting, said the charge is a cost-recovery initiative and not a way to wring profitable revenue out of UPS' customers. He said the current structure results in an "improper allocation of costs" for UPS because some are subsidizing the savings enjoyed by others.
That percentage is even greater than the 13.21% of total retail sales that were returned. Measured in dollars, returns (including both legitimate and fraudulent) last year reached $685 billion out of the $5.19 trillion in total retail sales.
“It’s clear why retailers want to limit bad actors that exhibit fraudulent and abusive returns behavior, but the reality is that they are finding stricter returns policies are not reducing the returns fraud they face,” Michael Osborne, CEO of Appriss Retail, said in a release.
Specifically, the report lists the leading types of returns fraud and abuse reported by retailers in 2024, including findings that:
60% of retailers surveyed reported incidents of “wardrobing,” or the act of consumers buying an item, using the merchandise, and then returning it.
55% cited cases of returning an item obtained through fraudulent or stolen tender, such as stolen credit cards, counterfeit bills, gift cards obtained through fraudulent means or fraudulent checks.
48% of retailers faced occurrences of returning stolen merchandise.
Together, those statistics show that the problem remains prevalent despite growing efforts by retailers to curb retail returns fraud through stricter returns policies, while still offering a sufficiently open returns policy to keep customers loyal, they said.
“Returns are a significant cost for retailers, and the rise of online shopping could increase this trend,” Kevin Mahoney, managing director, retail, Deloitte Consulting LLP, said. “As retailers implement policies to address this issue, they should avoid negatively affecting customer loyalty and retention. Effective policies should reduce losses for the retailer while minimally impacting the customer experience. This approach can be crucial for long-term success.”
Waves of change are expected to wash over workplaces in the new year, highlighted by companies’ needs to balance the influx of artificial intelligence (AI) with the skills, capabilities, and perspectives that are uniquely human, according to a study from Top Employers Institute.
According to the Amsterdam-based human resources (HR) consulting firm, 2025 will be the year that the balance between individual and group well-being will evolve, blending personal empowerment with collective goals. The focus will be on creating environments where individual contributions enhance the overall strength of teams and organizations, and where traditional boundaries are softened to allow for greater collaboration and inclusion.
Those were the findings of the group’s report titled "World of work trends 2025: The collective workforce.” The study was based on data drawn from the anonymized responses of 2,175 global participants of the Top Employers Institute’s HR Best Practices Survey for 2025, and 2,200 organizations from its 2024 edition.
To cope with those broad trends, the report found that companies must adopt “systems thinking,” a way of understanding how different parts of a system—whether an organization or a society—are connected and influence each other. Leaders who learn that skill can design holistic strategies that align employee needs with organizational priorities and broader societal challenges, the group said.
Toward that goal, the report highlights five trends that are reshaping and impacting the global workforce for 2025. They include:
Sustainable Workplaces - integrated partnership between society and organizations. In 2025, organizations will face growing pressure to address global challenges ranging from ethical AI use in the workplace to demographic changes like declining birth rates and an aging population. These issues are no longer isolated from business; they demand an integrated partnership between society and organizations. For example, labor shortages driven by demographic changes challenge companies to rethink their workforce strategies for future sustainability; for example, family-friendly offerings have increased substantially over the last year as employers acknowledge the reality that many more people are now responsible for aging relatives as well as young children.
New belonging – networking beyond to connect with various jobs, industries, and networks. Unlike previous generations, today’s employees change jobs and careers with greater fluidity, spanning multiple organizations over relatively short periods. This shift is reshaping the traditional, company-centered sense of belonging into a more dynamic, interconnected experience. Employees no longer expect to build lasting relationships solely within a single organization, but rather they form communities that stretch across various jobs, industries, and networks, sometimes even in public coworking spaces where the people they interact with daily may not even work for the same company. However, this fluidity offers companies a unique advantage: as employees move between organizations and interact with diverse professionals in shared spaces, they bring with them fresh ideas, innovations, and relationships that generate significant value.
Transforming experiences – “new collar” jobs. In 2025, we will see a substantial blurring of the traditional categories of “white collar” jobs—typically clerical, administrative, managerial, and executive roles—and “blue collar” jobs, which are typically found in the agriculture, manufacturing, construction, mining, or maintenance sectors. The nature of jobs once considered blue-collar has changed dramatically, thanks in no small part to advancements in technology, especially AI. Post pandemic, there seems to be a much higher demand in many places around the world for skilled trades and manual labor, coupled with a growing emphasis for needed skills over formal qualifications. This shift, sometimes described as the rise of “new collar” jobs, combines the technical expertise often associated with blue-collar work with the adaptability and digital skills needed in today’s job market.
Neuroinclusion - a competitive advantage. Organizations are also increasingly recognizing the advantages of including neurodivergent individuals in the workplace, hiring people with autism, dyslexia, dyspraxia, dyscalculia, and ADHD, as well as certain mental health conditions. In addition to bringing bringing unique perspectives and capabilities, these employees are also an important part of Diversity, Equity and Inclusion (DEI). This practice often requires companies to provide accommodation, adjustments, and support, but 2025 will bring a more radical shift, as neuroinclusivity is evolving from an afterthought to a foundational principle in workplace design, culture, and HR policies.
AI-powered leadership - balance between human intuition and AI’s analytical power.
If 2024 marked AI’s disruption of highly skilled roles like software development and healthcare, 2025 will be the year AI reshapes the highest levels of leadership, bringing a new balance between human intuition and AI’s analytical power. In this evolving landscape, leadership is no longer an individual pursuit, but a collective effort changed by intelligent systems. AI is not just influencing mid-level roles; it is becoming a partner in the C-suite, helping leaders navigate complexity, understand team dynamics, and make strategic decisions that benefit the entire organization.
The next time you buy a loaf of bread or a pack of paper towels, take a moment to consider the future that awaits the plastic it’s wrapped in. That future isn’t pretty: Given that most conventional plastics take up to 400 years to decompose, in all likelihood, that plastic will spend the next several centuries rotting in a landfill somewhere.
But a Santiago, Chile-based company called Bioelements Group says it has developed a more planet-friendly alternative. The firm, which specializes in biobased, biodegradable, and compostable packaging, says its Bio E-8i film can be broken down by fungi and other microorganisms in just three to 20 months. It adds that the film, which it describes as “durable and attractive,” complies with the regulations of each country in which Bioelements currently operates.
Now it’s looking to enter the U.S. market. The company recently announced that it had entered into partnerships with South Carolina’s Clemson University and with Michigan State University to continue testing its products for use in sustainable packaging in this country. Researchers will study samples of Bio E-8i film to understand how the material behaves during the biodegradation process under simulated industrial composting conditions.
“This research, along with other research being conducted in the United States, allows us to obtain highly reliable data from prestigious universities,” said Ignacio Parada, CEO and founder of Bioelements, in a statement. “Such work is important because it allows us to improve and apply academically driven scientific research to the application of packaging for greater sustainability packaging applications. That is very worthwhile and helps to validate our sustainable packaging technology.”
When the trucking giant known as Saia LTL Freight was founded back in 1924, the “company” consisted of just one employee, Louis Saia Sr. of Houma, Louisiana. And it didn’t own a single truck: Saia removed the rear seats from his family car in order to haul his customers’ goods to New Orleans, where he traveled to pick up produce.
One hundred years later, the firm has been bought and sold, acquired some competitors, and moved to Johns Creek, Georgia. And it has added a few more workers. Saia today employs more than 15,000 people who operate 213 terminals across the country and a fleet of over 6,500 tractors and 22,000 trailers.
Saia is now celebrating its 100th anniversary, and the company says it’s not done growing. At a November centennial celebration event, Saia announced that it would invest $1 billion in its operations this year to support further expansion, technological advancements, and its ongoing commitments to sustainability and community involvement. “Our centennial is not just about looking back at our achievements but also looking forward to the innovations and opportunities that lie ahead,” President and CEO Fritz Holzgrefe said in a release.
To commemorate its anniversary, Saia also launched two mobile museums that will stop at select venues for private events and visits. Guests can step into a real Saia truck and explore the company’s 100-year history through interactive artifacts. Visitors can also get behind the wheel of an action-packed simulator to learn what it’s like to be a Saia driver.
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2024 International Foodservice Distributor Association’s (IFDA) National Championship
It’s probably safe to say that no one chooses a career in logistics for the glory. But even those accustomed to toiling in obscurity appreciate a little recognition now and then—particularly when it comes from the people they love best: their kids.
That familial love was on full display at the 2024 International Foodservice Distributor Association’s (IFDA) National Championship, which brings together foodservice distribution professionals to demonstrate their expertise in driving, warehouse operations, safety, and operational efficiency. For the eighth year, the event included a Kids Essay Contest, where children of participants were encouraged to share why they are proud of their parents or guardians and the work they do.
Prizes were handed out in three categories: 3rd–5th grade, 6th–8th grade, and 9th–12th grade. This year’s winners included Elijah Oliver (4th grade, whose parent Justin Oliver drives for Cheney Brothers) and Andrew Aylas (8th grade, whose parent Steve Aylas drives for Performance Food Group).
Top honors in the high-school category went to McKenzie Harden (12th grade, whose parent Marvin Harden drives for Performance Food Group), who wrote: “My dad has not only taught me life skills of not only, ‘what the boys can do,’ but life skills of morals, compassion, respect, and, last but not least, ‘wearing your heart on your sleeve.’”