Magazine article Editor & Publisher

Avoid the Panic Button: Shifting to New Distribution Contractor Need Not Result in 'Delivery Meltdown'

Magazine article Editor & Publisher

Avoid the Panic Button: Shifting to New Distribution Contractor Need Not Result in 'Delivery Meltdown'

Article excerpt

There's something of a "fog of war" aspect to the recent delivery travails being experienced by the Boston Globe and its readers, following a shift from one primary distribution vendor to another. An armchair general (or industry watcher from another market) might read the "Delivery Meltdown" headlines and come to some easy conclusions about the wisdom of the Globe's move, the competence of its new vendor, or some other takeaway that misses the context and nuances of a complicated situation.

"Let's not put ourselves through that," may be the words echoing through newspaper executive boardrooms at the moment. However, there are more useful observations to be made, especially for papers considering the outsourcing of distribution or contemplating the transition from one delivery vendor to another.

Consider, for example, the St. Louis Post-Dispatch and the San Diego Union-Tribune, who both went through comparatively uneventful transitions using the same vendor the Globe hired to manage its distribution services. Meanwhile, the Globe's experience wound up more closely mirroring a hugely disruptive conversion that took place at the Orange County (Santa Ana, Calif.) Register in 2014. A commonality in all of these cases was the involvement of ACI Last Mile Network (formerly ACI Media Group), a California-based vender with 50 years of history serving the newspaper industry, as the contractor managing the transitions.

What happened in Orange County "was a different scenario," not one that Globe management anticipated for itself, "because (ACI) had (only) three weeks to prepare for the Orange County Register," said Globe chief executive officer Michael Sheehan, in an on-air interview with local Boston TV station WGBH, following the delivery service interruptions affecting his own paper earlier this year. "In other markets where (ACI) came in, they (had) done a very good job working with other publishers. We had talked to all of them ... The Orange County Register was a completely different situation."

There was, however, at least one other significant parallel between Boston and Orange County that may have been lost on some of the parties involved. What made for a bumpier ride for the Globe and the Register, according to Jack Klunder, ACI president and chief operating officer, was that for those two papers, local circumstances made it necessary to build out an entirely new distribution system from scratch, whereas in St. Louis and San Diego, ACI was merely absorbing existing distribution systems previously managed by other parties.

Klunder said factors inhibiting cooperation between outgoing and incoming service providers were key to the level of disruption experienced in Boston and Orange County. In St. Louis and San Diego, that complication didn't come into play.

Optimal Scenarios

The St. Louis Post-Dispatch, Klunder said, represented the most optimal situation for a distribution vendor entering a new market, since the paper was simply outsourcing the management of an in-house distribution system. He explained, "Virtually every newspaper carrier who was under contract with the St. Louis Post-Dispatch came under contract with ACI, on (his or her) existing route because we had the cooperation of the newspaper to facilitate that. That's the ideal transition format to go through. So you have full cooperation and full access to the carrier infrastructure, the routing, and the current management team."

Because "most newspapers still manage their own home delivery operations," Klunder said, this is the largest segment of potential business for ACI and a primary reason for the company's growth during the last 10 years "with all of the downsizing that's been taking place" at newspapers.

There are several reasons why papers entertain this option. "From a strategic standpoint, they're choosing not to want to have to manage (distribution operations) on a day-to-day basis," Klunder said, allowing them to focus instead on things like content creation and advertising sales. …

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