APX fallout claims more
More third-party firms in the package market tied to the U.S. Postal Service are folding their tents, hit hard by trends that drove the giant parcel consolidator APX Logistics out of business. DDU Express and Parcel Corporation of America were the latest victims, pushed aside in recent weeks as the large express carriers ramped up their own versions of mail consolidation services. APX was the largest 3PL using USPS for delivery – claiming to put a million packages each day into the hands of postal carriers – before it abruptly collapsed at mid-March. APX had been in a line of business with lots of competition and low pricing. A market analyst said APX also used a number of smaller firms as subcontractors, and some that were already struggling with tough market conditions were reeling as they lost their APX business. Industry sources said DDU Express, a package consolidator in Medley, Fla., recently went out of business in part from the APX fallout. Although its Web site was still operating last week, a call to DDU triggered a message that the number was “disconnected or is no longer in service.” In San Fernando, Calif., PCA was telling people it was also preparing to close, and sources there said the immediate cause was the APX bankruptcy. PCA had several lines of business beyond USPS shipping, including warehousing, product inspection and ocean container processing to take advantage of it proximity to the ports of Los Angeles and Long Beach. “It’s an extremely competitive market, and there’s a lot of movement in it,” said one analyst who declined to be identified. “We see this as sort of a market correction.” Meanwhile, USPS officials said that after APX shut down they drew some additional merchants into shipping directly through its Parcel Select service that uses mail carriers for final home delivery. And in some cases USPS customers upgraded to its priority delivery service offerings. Major package firms like FedEx, UPS and DHL also ramped up their own postal-linked units as well to scoop up former APX customers.
