4 Signs you Need a Transportation Management System for Parcel Shipping

The results are in: Amazon shipped five billion Prime items in 2018.  Five billion!  And that’s just one e-commerce retailer.  Add to this figure the thousands of manufacturers, omnichannel retailers and 3PLs who all ship parcels, and the number of packages in transit across the world at any given moment is staggering.

Transportation teams worldwide face a unique challenge.  Multi-carrier shipping is complicated, and organizations often describe their parcel delivery processes as “expensive,” “time consuming,” and “frustrating.”  Why?  Managing parcel shipping typically includes a wide range of departments inside the organization: procurement, fulfillment operations, customer service and finance.  It can also include hundreds of global carriers, each of which have different shipping systems, pricing schemes, terminology and compliance rules.  With so many moving parts, the end-to-end process from procure to pay can be chaotic, and data can easily be siloed.

 Overcome Parcel Shipping Challenges with a Transportation Management System

Now, there is a solution for reducing shipping costs and streamlining the end-to-end parcel shipping process without compromising on-time delivery percentages: a dedicated Transportation Management System (TMS) for parcel shipping.  With a TMS for parcel shipping, you can reduce shipping costs while still meeting customers’ delivery expectations by boosting efficiency, choice and visibility for the entire delivery process.  By managing multiple carriers in a single platform, you power your transportation booking with real-time rate shopping and simulation data.  And by automating transport booking according to your business rules, you eliminate manual steps in the fulfillment process.

Despite these benefits, we understand you may be unsure whether you really need a TMS for parcel shipping.  You might not think your current process is all that bad, or you might think now isn’t the right time.  It’s easy to postpone purchase decisions until the next budget cycle… until the next hiring cycle… or after the next earnings call.  But every day you wait to implement a TMS for parcel shipping could result in thousands of dollars of missed opportunities for savings.  Translation: lower profit margins.

Here are four signs you’re ready for a TMS for parcel shipping today:

1. You worry you’re leaving savings on the table during carrier negotiations: If you’re heading into carrier contract negotiations with manually crunched spreadsheets and outdated forecasts, there’s a good chance your worries are well-founded and it’s time to evaluate a TMS for parcel shipping.  With a TMS for parcel shipping, all carrier rates and performance data are housed in a single platform.  This means transportation procurement teams have access to real time data to negotiate contracts based on actual usage and performance and manage costs effectively.  Decisions become proactive instead of reactive, and the number of dollars spent off budget is drastically reduced.  Added bonus: Closed User Group (CUG) tendering ensures “best value” carriers are optimized to improve performance KPIs such as On Time Delivery (OTD) percentages and customer satisfaction.

2. You need more staff to handle increasing shipment volumes. If you’re manually booking transport on multiple carrier-specific workstations, then it makes sense you’ll need more staff to handle increasing shipment volumes.  However, with a TMS for parcel shipping, all carriers are managed in a single platform and shipments are automatically booked with “best fit” carriers according to your specific business rules – reducing the number of stations on your warehouse floor and allowing volumes to scale without additional resources.  The right TMS for parcel shipping will also integrate with your existing enterprise systems (ERP, WMS, and OMS), enabling your team to fine-tune your transportation strategy based on “big picture” data.

3. Increasing Number of Calls into Customer Service: If your customer service team is fielding a high number of customer inquiries regarding late and/or inaccurate shipments, it’s time to evaluate a TMS for parcel shipping. With a TMS for parcel shipping, your customer service representatives have easy access to parcel delivery information in a single platform, which naturally improves the customer experience.  Gone are the days of accessing multiple carrier websites to retrieve shipment data.  Instead, your customer service representatives can quickly pull necessary information from a single dashboard, resulting in quick problem resolution and accurate customer communication.  Even better: you can put your customer service team on offense.  Instead of reacting to a customer complaint regarding a late or inaccurate shipment, with a TMS for parcel shipping, your team can easily flag delivery “exceptions” and proactively resolve shipment errors and delays before they occur.  You can even create smart exception workflows to enable automatic responses to “exception” events, reducing the need for customer service intervention altogether.

4. You struggle to accurately allocate shipping costs: If your Finance teams lack the necessary data to allocate shipping costs per department, per product, per SKU, etc., or can’t expend the effort to compile the data from different sources, then it’s time to consider implementing a TMS for parcel shipping. With a TMS for parcel shipping, Finance teams have access to real-time, accurate shipping data down to the SKU level, improving reporting and forecasting and enabling them to create better disciplines around shipping spend.  In addition, Finance teams will be able to automate self-billing when budgeted carrier costs match actual, reducing the Accounts Payable workload and freeing Finance resources to spend time on other initiatives.

The Right Time Is Now

If even one of the challenges described above feels familiar, now might be the right time to learn more about how a Transportation Management System for parcel shipping can improve your shipping processes from procurement to pay.

Download our white paper: The Other Half of your Net Landed Cost of Goods to learn more about how you can improve parcel shipping while controlling your costs.