Just the fax: rise of fax machines trips up messenger companies.

Just the fax: Rise of fax machines trips up messenger companies

L.A. embraces those facsimile machines, but you sure can't fax a blood sample

Five years ago, when Barry Berkowitz first began to worry about the impact facsimile machines might have on his courier business, he set out to sidestep the new technology.

Berkowitz, president of Westwood-based Now Services Inc., started a medical transport company. You can't fax a blood specimen.

Now Berkowitz is embracing the technology that he once viewed as the enemy in a new venture. Berkowitz, whose Now Services is one of Los Angeles County's largest messenger and courier companies, with seven offices and some 500 drivers, is nearing agreement with the county to start a fax-based attorney service in Los Angeles County Superior Court. Berkowitz hopes to open the service in June.

"I knew that because fax machines were going to put a significant dent in my revenues that I was going to have to do something real creative in a very timely manner," Berkowitz says. "Fax scared me."

Like Berkowitz, messenger and courier services in Los Angeles County and nationwide are discovering that they must expand their services, redirect their marketing efforts and streamline their operations to withstand the impact that fax machines are having on the delivery business.

An estimated 2 million fax machines are in operation across the United States.

"Fax machines are definitely affecting our deliveries," Berkowitz says. "I'm a specialist in the transfer and storage of information and we're going to have to realize that the fax machine is not so much an enemy, but the means to improve communication."

Opinion varies widely regarding just how much business fax machines are taking from messenger and courier services.

Some courier executives insist that fax machines are having no impact on business. Owners of Los Angeles County courier and messenger services add that the continued rapid growth of Southern California is softening the blow here. Still, most admit that the invasion of fax is at least slowing growth.

The Association of Messenger and Courier Services, a trade group that represents 34 of Los Angeles County's estimated 300-plus messenger and courier services, says that facsimiles are taking 3 percent to 10 percent of the messenger business in the county.

The Messenger and Courier Association of America, representing 7,000 courier companies nationwide, estimates that fax machines are cutting into 10 percent to 20 percent of the U.S. messenger business.

The national association has even initiated a special committee to study the impact, both negative and positive, fax machines are having on the industry.

Ironically, a study by the committee found that 80 percent of the messenger and courier company representatives replying to a survey say they have fax machines in their own office and 60 percent of those send and receive fax communications for their customers.

Officials at Federal Express Inc., the Memphis, Tenn.-based air express company, estimate that the company would be carrying 16 percent more overnight letters, some 25,000 pieces, if it weren't for fax machines.

"Our slogan remains the same: `May a sledgehammer find your fax machine,''' jokes Michael Dinardo, president of the Association of Messenger and Courier Services and vice president of Southern California Courier Co., adding, "We definitely recognize that it is a problem. I think it's really hurting the small guy picking up small accounts."

Courier officials are quick to point out that only a small percentage, perhaps a fifth they say, of courier and messenger company deliveries involve documents that could be faxed. They add that many documents -- legal papers that require signatures, confidential memos, lengthy scripts -- are still sent by messenger. Other flat items where quality is crucial, such as artwork, photographs and blueprints, likewise must be delivered in person.

More and more, though, delivery companies are redirecting their marketing efforts to emphasize small package delivery. Package delivery, they say, is more profitable because they can charge more for each piece. And the fact remains: Three-dimensional items cannot be faxed.

"You can't fax film, you can't fax props, you can't fax blueprints," Dinardo says. "There are a million things you can't fax. Half of our stuff is film, lumber or wardrobe material."

Messenger service managers add that in-person deliveries create an impact that material sent by fax cannot.

"This is a town where status is everything," says Michael Rogers, customer service manager for West Hollywood-based Go-Between Courier Service. "We're in a town of valet parking at shopping centers. When you have a messenger hand deliver something, that says something about you."

Some courier executives predict that the number of messenger services in Los Angeles County will decline by 50 percent in the next decade, largely through consolidation. Technological developments like facsimile, computer package tracking and automated dispatching combined with the impact of maddening Southern California traffic and skyrocketing insurance rates are forcing small messenger and courier companies out of the business and larger companies to become more competitive.

Companies are no longer relying on on-demand service, placing an ad in the yellow pages and waiting for the phone to ring. More and more, they are aggressively seeking new customers and contract accounts.

Some are entering into an area known in the business as facilities management, running a company's in-house messenger department or taking over the mailroom and all communications dispatch for a company.

Others, like Now Services' Berkowitz, are offering fax services as part of their delivery business, allowing customers to use their fax machines for incoming and outgoing faxes.

"Our business is changing," says Cindy Michelson, a member of the national association's facsimile transmission committee and owner of Birmingham, Ala.-based Errand Express. "This will force people to look at new opportunities to increase revenue, to change their strategies. We're doing a heckuva lot more than delivering documents and paper."