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4 Reasons Why Now is the Perfect Time to Invest in Parcel Shipping Technology

Manufacturers, retailers, and 3PLs today are under significant pressure to distribute high volumes of products across significant distances quickly, forcing them to gain deeper insights into their shipping processes.  Many organizations now realize the benefit of capturing shipping data with parcel shipping technology and using Business Intelligence to streamline shipping processes in order to expedite speed and improve cost efficiency. Moreover, senior leadership at these organizations are adopting digital technologies and implementing digital automation to cultivate shipping as a core business capability.

get the checklist: choose the right tms for parcel shippingBut technology isn’t new to shipping. For example, carriers such as UPS, FedEx, and DHL have long used electronic data interchange (EDI) to transmit information to shippers, and some logistics professionals are using Transportation Management Systems (TMS) to execute complex, multi-modal freight shipments across the globe. However, studies have found not everyone is ready to adopt new technology, particularly when it comes to parcel shipping.  According to the Gartner 2019 Market Guide for Multicarrier Parcel Management Solutions, “Most companies today operate in reactive execution mode for parcel and are missing great opportunities to optimize and consolidate their parcel shipping as well as shop for more varied rates and/or services.”

The Time is Ripe for Parcel Shipping Technology

While the reason for slow technology adoption rates in parcel shipping isn’t immediately evident, most industry analysts agree, given the rise in e-commerce and the pressure created by the likes of Amazon and Alibaba, companies are reaching the point of no return – where technology is no longer a “nice to have,” it’s a “must-have” to successfully – and cost efficiently – meet today’s consumers’ same-day/next-day delivery expectations.  In fact, a recent State of the Industry Report prepared by A. T. Kearney envisions a future with digitally connected, flexible supply chains from end-to-end. Per the report, “Inevitably winners and losers will emerge as companies that make the right technology investments and strategic choices outperform others.”

Fortunately, now is the perfect time to invest in new parcel shipping technology for four key reasons:

  1. Today’s parcel shipping systems are more sophisticated than ever. Featuring easy integrations to business-critical systems such as an ERP or WMS, state-of-the-art Business Intelligence tools for accurate data capture and reporting, and the ability to flag invoice issues – parcel shipping systems allow shippers to finally take the driver’s seat and implement smart strategies that fuel business KPIs.  And if our own development team is any proof: parcel shipping technology is poised for continuous improvement, delivering ongoing, cutting edge functionality and operational platforms that are increasingly intuitive and user friendly.
  2. Today’s parcel shipping systems are more global than ever. For shippers looking to expand their footprint worldwide, some parcel shipping system providers guarantee label and documentation compliance with global carriers as well as enable consolidated shipping to cut costs and increase efficiency by combining shipments headed to the same geographic area.
  3. Today’s parcel shipping systems are SaaS-based. Now that cloud-based systems have gone mainstream, companies of all sizes can enjoy their benefits with minimal upfront costs and IT investment. Using a SaaS-based system will enable companies to realize a return on investment quickly — without the hit of an initial investment and with the benefit of accelerated implementation and integration processes. And an added incentive: security. A reputable parcel shipping system vendor will potentially provide more robust data security than a company could by itself – particularly if there’s a lack of deep IT resources, staff, controls, or expertise in house.
  4. Today’s parcel shipping systems work. Logistyx customers report an average 25% savings on parcel shipping spend while successfully meeting delivery commitments, and time to value on the parcel shipping system itself is often six months or less.  Companies are also leveraging parcel shipping technology to automate manual work, scale their business without adding resources, and enter new markets quickly – yielding further dividends from the initial investment.

Today’s parcel shipping systems aren’t just tactical execution tools – they’re the secret sauce in leading companies’ formulas for decreasing net landed cost of goods. To learn how you can take advantage of the substantial opportunities for cost savings available in parcel shipping, download the e-book: Do Nothing to Create Shipping Efficiencies, and Cost of Delivery Will Automatically Increase.

 

Transparency in Parcel Shipping: Where’s My Package?

The rise of e-commerce has created many opportunities – and many challenges – for retailers and manufacturers.  The good news: shippers can access new revenue streams and expand their product footprint globally. The bad news: many companies are still employing a traditional approach to order fulfillment, and while traditional supply chain models certainly yield benefits in a “simple” shipping environment, they fall remarkably short when it comes to tackling the complexities of e-commerce shipping.

One such challenge? Transparency.  Today’s consumers don’t just expect free shipping (thank you, Amazon) they also expect fast delivery (thank you again, Amazon) as well as transparency throughout the delivery process.  In fact, according to PwC’s 10th Annual Global Consumer Insights Survey, 88% of consumers surveyed now place such a premium on same-day/next day delivery options, they’re actually willing to forego free shipping.  And Logistyx partner project 44 reported that 74% of consumers surveyed shared when a package isn’t delivered when expected, it negatively impacts their impression of the company.

With this in mind, e-commerce shippers might want to consider offering a same-day/next-day option for shipping – at a price – and focus on other key ingredients in the customer experience, such as transparency.  This means providing real-time shipment data and package tracking capabilities, along with positioning customer service teams to monitor and proactively address problems to deliver exceptional customer service.

But First, Visibility

New call-to-actionUnfortunately, shippers can’t provide customers with delivery event transparency if they don’t have visibility into parcel movements once the shipment leaves the warehouse, distribution center, or store.  In many cases, a customer service representative has to take several steps before they can tell a customer when their package will be delivered, none of which provide the personalized, proactive buying experience customers are seeking.   For example, the rep may tell the customer to call the carrier’s customer service number for an update… or they may provide the customer with a tracking number and send them a link to the carrier’s website… or they might submit a ticket in the carrier’s system and ask the carrier to contact the customer with an update.  This kind of manual process may take hours (heaven forbid days), even for a fairly standard request, and it means the shipper is playing defense.

And poor visibility in parcel shipping creates problems beyond transparency. In fact, reduced visibility is often a byproduct of either low – or no – investment in transportation management technology, and the costs organizations incur when they don’t invest in this technology can be steep:

  1. Higher parcel shipping spend. Shippers without the ability to track carriers’ on-time-delivery rates risk increasing their transportation spend.  They lack the necessary data to truly evaluate carrier performance, and therefore carrier selection and negotiations are uninformed.  Furthermore, without the ability to match carrier invoices against actual performance, shippers may pay for an on-time delivery, when in fact the delivery was late.  And in many organizations, higher parcel shipping spend leads to higher product price points – ultimately pushing customers toward competitive offers or toward a “no buy” decision.
  2. Increase in refunds. Poor visibility means the shipper has no way of communicating transportation updates to the customer – including delays – and uninformed customers are often unhappy customers, demanding a full refund for shipping costs or even a full refund for the purchase price.  Perhaps even worse: according to a study from OSM Worldwide, two-thirds of online shoppers will express frustration to friends and family when a package doesn’t arrive as expected.
  3. Lost customers. According to a report from project44, 85% of marketers claimed delivery is moderately to very important to their customer experience and brand. This means for retail shippers, working on the customer experience post-checkout is essential for repeat purchases.  An unfortunate byproduct of the poor customer communication described in #2 above: when a customer is disappointed, his or her loyalty to the shipper will also decline — leading them to consider competitors’ products.

The Sure Path to Transparency

There are myriad ways to increase transparency for customers, but to go on offense, shippers need to leverage data and connect the end-to-end transportation chain with a TMS for parcel shipping.

A TMS for parcel shipping will provide full visibility into customer deliveries, including a complete picture of what’s happening with each shipment, so shippers can monitor carrier performance and respond rapidly to any issue or disruption. The system will send early warning signs when there are parcel delivery issues or “exception events,” empowering customer service teams to proactively trouble-shoot the exception event and communicate delivery updates to the customer in real time. For example, perhaps the product can be sent from a different distribution center to arrive on time. Or perhaps the customer is willing to retrieve the product from a nearby store or locker.

A TMS for parcel shipping even makes it possible for organizations to provide customers with the ability to track and trace shipments on their own (not the carrier’s) website – reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior while on the website, which (fingers crossed!) could lead to additional purchases.

Consider too that tracking delivery exception events enables shippers to capture accurate carrier performance data – improving carrier service measurement and better informing carrier contract negotiations.

Improve Transparency in Parcel Shipping with a Best-of-Breed TMS

It is possible to improve transparency in parcel shipping by rethinking distribution and fulfillment strategies and gaining more visibility in day-to-day delivery operations.  Implementing a TMS for parcel shipping will ensure you’re capturing delivery event data at each milestone and pro-actively providing information to your customer about their product’s whereabouts during the shipping process.  It’s an absolute must for dynamic shipping teams in the e-commerce age, and it’s just a click away.

 

How to Measure with Meaning: Identify Parcel Performance Indicators

As parcel shipping evolves, so too are the metrics and indicators we use to measure its performance.  A job well done is no longer defined as simply moving products from point A to point B.  It’s also about delivering on time and under budget.  And as the industry continues to shift, the future of how we manage parcel shipping will demand more data – which means you’ll need to identify and track more parcel performance indicators.

A need for new and relevant parcel shipping metrics.

From the number of steps we take in a day to the number of users who clicked on an online ad, technology allows us to measure both our personal and professional worlds.  We’re in a measurement craze right now, which can make it hard to know how to intelligently sift through the plethora of available data analytics and Business Intelligence.

So, when it comes to measuring parcel shipping performance, knowing where to start can be a daunting task. It’s best to look at your own parcel shipping ecosystem first, and ask yourself the following questions to start to understand what metrics are available – and important:

  • Which carrier services are we using?
  • How do we know whether our carriers are performing the services under contract?
  • How do we know we’ve selected the most efficient shipping option based on delivery deadlines, package destination, carrier rates, performance and other mission-critical factors?
  • What is my net landed cost of goods per parcel?
  • What percentage of my net landed cost of goods is comprised of accessorial charges?
  • Which accessorial charges occur most often? Is there a trend?
    • Residential surcharge?
    • Fuel surcharge?
    • Bad-address penalty?
    • Extended area surcharge?
    • Third-party account number penalty?
    • Large package surcharge?
    • Other?
    • What is my average parcel size?
    • What are my most frequent shipping lanes?
    • How often are my parcels late, lost, or damaged?

And if you’re shipping internationally, there are additional considerations:

  • Which surcharges and fees occur most often with cross-border shipping? Is there a trend?
    • Cross-border processing fees?
    • Brokerage fees?
    • Additional insurance fees?

A Clearer View of Your Logistics

get the ebook: critical capabilities of a tms for parcel shippingEvery logistics leader wants to know that carrier procurement is aligned with strategy and that they’re receiving the delivery outcomes for which they’ve paid. Questions like these provide insight into your current parcel shipping environment: what your company ships, how your company ships, how much your parcels weigh, where your parcels go, how long it takes, and how much it costs – to name a few!  They’ll also give you a clearer view of what’s happening inside of your organization: what you need to fix and where you’re winning already.  You may find you have to adjust course if you want to position your operations to seamlessly scale during the next peak season, or you may discover that if you just stay on path, you’ll continue to optimize your transportation spend and deliver on your customer promise.

Simplify the Complexity of your Parcel Shipping Data Capture

If you’re feeling overwhelmed by the sheer number of indicators we’ve listed, start small and just pick two to begin.  As stated by our V.P. of Business Intelligence, Mike Eisner, “When businesses begin to connect the data from shipping… complex decisions and tasks get simpler.”

If, however, you’re feeling overwhelmed because you don’t have immediate access to this kind of data, then you need to consider whether it’s time for a Transportation Management System (TMS) for parcel shipping – complete with Business Intelligence – to give you the insight you’re seeking.  A TMS for parcel shipping with Business Intelligence will connect your data from carrier selection… to parcel shipping execution… to carrier invoice payment, and then synchronize it for reporting.  Suddenly, you’ll have a 360-degree view of your shipment operation and you can ask sophisticated questions of your data to drill down into those performance indicators to get insights that make sense.  Even better: you’ll create a data-driven culture in your shipping environment, where everyone can answer their own questions and make more informed, data-driven decisions.

Don’t Get Left Behind

According to Salesforce, approximately 89% of all American businesses are investing in data and data analytics processes. With so much data being captured, it stands to reason there will soon be a very definite segregation between those businesses leveraging the benefits of business intelligence, and those that do not.

To learn more about how you can leverage a TMS for parcel shipping in your organization, download our e-book, Quick Guide: Critical Capabilities of a TMS for Parcel Shipping.

 

What is a Transportation Management System for Parcel Shipping and Why is it Important?

In this article:
1. The two primary functions of a TMS for parcel shipping: planning and execution
2. TMS for parcel shipping: capabilities overview
3. Omnichannel distribution challenges: increasing order volumes, changing customer expectations, disconnected business systems

 

Scaling parcel shipping, whether you’re a retailer, a manufacturer, or a 3PL, has traditionally been an intimidating challenge. Companies contract with one or two domestic carriers, and logistics teams manually enter orders into on-premise carrier workstations to produce carrier-compliant labels and documentation. This means as parcel volumes scale and demand for same-day and next-day delivery surges, companies are left with little ability to rate shop and even less ability to execute.

And there’s no end in sight to this dynamic. As Bloomberg News summarizes in a recent article on the Amazon-FedEx delivery feud, “…the common features for all involved are an ever-increasing flood of packages combined with greater pressure on profits.”

There’s no escaping reality: smart parcel shipping management is critical, and it literally pays for a business to invest in a Transportation Management System (TMS) for parcel shipping. The proof is in the numbers. According to the Wall Street Journal, in 2017, total spending on logistics rose to a record of nearly $1.5 trillion, up 6.2% from the year before, and about $250 billion more than companies spent on logistics in 2008. And on average, here at Logistyx we’ve found it costs companies at least 10% more to manage shipping without a TMS for parcel shipping than with one. That adds up to tremendous savings – in hard dollars as well as in labor and time saved week after week.

With 2019 on track to demonstrate record-breaking growth in the parcel shipping market,
now is the time for companies to invest to keep their parcel shipping spend under control. When at least 60% of a company’s total shipping volumes are parcel, TMS for parcel shipping is essential technology.

Omnichannel Retail | 1:21

What Is a TMS for parcel shipping?

A TMS for parcel shipping has two primary functions: planning and execution. The planning stage begins with overall carrier rate calculations and ends with carrier selection and package consolidations based on factors such as a shipper’s business rules, a customer’s delivery preferences, and the inventory’s location. The execution stage encompasses everything from printing shipping labels and documents to ensuring the execution of the delivery commitment. Basically, if you need to get a parcel from point A to B, or even C to D, a TMS for parcel shipping will handle that, and more.

They’re able to:

  • Streamline order fulfillment ops and set each parcel up for cost-effective, on-time delivery before it leaves the warehouse
  • Integrate with leading business systems to seamlessly execute shipments from any operation, whether it’s automated, manual, or somewhere in between
  • Identify the best carrier service and automatically provide a label that complies with the carrier’s requirements
  • Account for the variables in carrier contract negotiations and eliminate the guesswork in budgeting
  • Calculate the impact of a new carrier contract on the bottom line
  • Identify savings opportunities across attributes such as origin-destination, carrier services, modes, and accessories
  • Automatically compare carrier invoices against expected transportation costs and identify discrepancies
  • Report on transportation spend according to geography, business unit, accruals, and GL Coding
  • Identify opportunities to deploy different multi-carrier parcel delivery strategies that yield greater returns
  • Send instant warning alerts if a parcel is off track or behind schedule

Why is a TMS for Parcel Shipping Important?

Market factors such as an increasing demand for omnichannel distribution. Rapidly growing ecommerce order volumes have changed how companies operate, requiring them to support faster order fulfillment processes, millions of parcel delivery variables, infinite supply chain work streams, and a more global customer profile.

Additionally, demand for same-day/next day delivery is growing and carrier services are expanding. The C-Suite is under growing pressure to reduce net landed cost of goods and manual labor expenses. End-to-end order fulfillment data is trapped in silos. Companies are trying to navigate this new market, and they need a powerful software solution to succeed.

Implementation Cannot Happen Soon Enough

Any efficiencies achieved in the distribution model can help companies successfully navigate these new market dynamics, and shippers who can invest in TMS for parcel shipping systems stand a better chance of keeping overall transportation costs in check and improving customer satisfaction. With the right TMS solution, modern companies are eliminating multiple steps in the order fulfillment process, optimizing carrier service selection, syncing shipping data across business-critical systems, and yielding tremendous gains in on-time delivery in full rates – all of which helps them compete in an ever-changing market.

Learn how a TMS for parcel shipping can benefit your business today.

How a TMS for Parcel Shipping Helps Grow your Business

Consumer demands push parcel shipping volumes to new heights every year. It’s a global phenomenon, and as a result, both retailers and manufacturers are re-prioritizing the role of parcel shipping in the organization. But good intentions alone won’t get the job done.  To understand the implications of parcel shipping on the supply chain, shippers need to re-think distribution strategies and consider the myriad challenges scaling shipping volumes, expanding marketplaces, and same-day/next-day delivery expectations can present.

Global Omnichannel Distribution

Perhaps you’re looking to implement or revise your omnichannel strategy. Or maybe you want to expand your product offering to another vertical or geographic area. Growing your company doesn’t happen by itself, nor does it happen overnight. And let’s not forget that only so much can be done by your workforce.

The definition of omnichannel is changing, and the reality is that a global, modern omnichannel strategy requires you to ship from anywhere to anywhere at the desired time, making it necessary to work with different carriers in order to deliver as promised. This can be tough on your fulfillment team, who may suddenly need to adhere to parcel shipping regulations in a new country, select the right carrier, and meet the specific documentation requirements – all while handling the usual influx of orders.

Parcel Delivery Transparency

Today, buyers expect to know the exact status, location, and ETA of their package, and the latest research indicates a delivery failure influences the customer experience more than a mediocre website.  This means that for companies looking to establish and maintain customer loyalty, exceptional customer service has to be more than just lip service.

But high levels of service require more than a friendly voice on the end of the line.  They require shipment data.  And sadly, this shipment data can be hard to come by.  Carriers each have their own status messages and formats, making shipment visibility fragmented.  Unfortunately, customer service departments often struggle to create a full overview of a shipment’s status, let alone communicate proactively to a customer regarding delivery time.

Overcome Obstacles and Achieve Scale

Automated, consistent parcel shipping processes backed by the right tools can overcome obstacles and make scaling your business possible.  A TMS for parcel shipping will empower you to fulfill more orders and track their movements anywhere in the world – using the same workforce.  And the benefits don’t stop there.  With the right TMS for parcel shipping, you can also:

  • Optimize carrier selection and ensure cost-effective delivery to customers
  • Monitor every shipment to ensure carriers are performing services as contracted
  • Create both domestic and cross-border carrier compliant documentation and labels to avoid delivery disruption and prevent fines
  • Gain real-time visibility to each parcel and implement smart exception workflows to rapidly react to delivery disruptions and inform customers
  • Seamlessly connect to your business-critical applications, allowing your teams to work across systems without interruption

Want to see how your company can benefit from a TMS for parcel shipping?  Schedule a demo today.

 

When to Choose a Transportation Management System for Parcel Shipping

Every manufacturer, retailer, and 3PL has its own unique capacity for logistics tech investments. In fact, many companies still get by with phone call track-n-trace, paper carrier contracts, and Excel sheets. Whatever works, right? But according to Gartner, by 2020, same-day delivery will drive up logistics costs as a percentage of revenue by 50%, which means we think an investment that solves the many pain points of shipping (and has an impressive ROI) is worth making. And modern technology has transformed the way we can handle parcel shipping — so much so that going without it may be hurting your bottom line. So, how do you know when you’re ready to implement a transportation management system for parcel shipping?

Know What You Want to Accomplish

First, it’s vital to explore exactly what you need your transportation management system (TMS) for parcel shipping to do. Are you struggling to understand various carrier contracts and quickly onboard new ones? Are you looking to find the best rates for fluctuating shipping volumes and lanes? Are you missing your delivery commitments to your customers, and if so, how is the problem impacting the bottom line? Start by calculating how much money you’re losing by not using a smart, streamlined, and accurate parcel shipping management platform.

While a TMS for parcel shipping ultimately allows you to save money, time, and labor in shipping, it can also solve many issues within fulfillment ops, procurement, finance, and customer service. Discover everything you can accomplish with new TMS for parcel shipping technology:

  • Manage carrier contracts, comply with label and documentation requirements, and see the long-term impact of various carrier service rates – while also increasing your capacity to identify new carrier services and on-board them more quickly.
  • Centralize all parcel shipping data (i.e., shipment volumes, cost variables, delivery events) in a single, accessible platform and integrate it with other enterprise systems.
  • Get real-time updates on all shipping and delivery details.
  • Run data analytics and generate reports for better decision making.
  • Achieve higher on-time delivery rates, be proactive about customer delivery updates, and automate the returns process.

If your current logistics environment is struggling with budgeting, data management, and on-time delivery tracking, to name a few, it may be time to invest in TMS for parcel shipping technology.

Video: The Critical Capabilities of a TMS for Parcel Shipping

Define the Scope of your Transportation Management System for Parcel Shipping

Ensure the success of your investment by digging into the details. To truly understand whether a TMS for parcel shipping is worthwhile, it’s crucial to identify which features of the system will be meaningful for your specific business needs. Answer the following questions before taking the leap.

Which carrier services am I using? Whether it’s UPS Ground or FedEx Priority Overnight, the label requirements change with each carrier service you use, and the more carrier services you utilize, the more you should consider adopting a TMS for parcel shipping. Keep in mind, different TMS for parcel shipping systems may integrate with specific carrier services, so confirm you’re investing in one that caters to your company’s specific needs.

Do I have the capacity to handle my current parcel shipping volumes? Same-day and next-day delivery expectations, combined with increasing parcel volumes, may be the pivotal factors that push you toward a TMS for parcel shipping investment. And if you’re not feeling the pinch now, consider that with healthy growth, your business could reach capacity. Don’t hesitate to think in the long-term here. Make sure your TMS for parcel shipping selection can handle not only your current needs, but also be capable of taking on more.

How is my procurement and carrier service selection process? If you’re drowning in carrier contracts, lack proper insight into your contract history, or struggle with rate simulation and budgeting, then a TMS for parcel shipping can be a life-changing tool for your business. As long as the TMS for parcel shipping of your choosing specializes in procurement ops, you’ll be on the right track.

In the past, TMS for parcel shipping technology was often difficult to integrate, required an on-premise installation, lacked cross-border functionality, and cost a fortune to operate. Luckily, the past decade has been monumental for the technology. Companies are now seeing almost immediate ROIs when implementing a TMS for parcel shipping while simultaneously expanding their geographic footprints, implementing omni-channel distribution, and even innovating with 3D print-and-ship strategies. Because, let’s face it: parcel shipping can’t just be about delivering parcels. It also has to be about delivering bottom line performance.

Perception is Everything: Free Shipping Solutions Don’t Have to Drain Profits

Offering free shipping does not have to cost a fortune when embedded into the initial listing price. In fact, this approach can be an effective way to increase sales without spending any extra at all. When customers see “free shipping,” they become more inclined to buy. To win over these customers without breaking the bank, sellers can embed shipping costs into listing prices and take simple steps to minimize those costs to further boost profitability.

Why sellers should consider offering free shipping

Today, customers increasingly expect free shipping options and will likely choose sellers that offer free shipping when the delivery date is similar to that of sellers who charge for shipping. By embedding shipping costs into prices, shopper perceptions and sales often improve at no cost to the seller.

New call-to-actionMany customers, for example, would rather buy a $15 lamp with free shipping than a $10 lamp with $5 shipping. Whether it costs them the same or not, many customers simply want to eliminate shipping costs from the shopping experience.

Ecommerce Foundation included comments from Etsy CEO Josh Silverman in its U.S. Ecommerce Report, 2018 (page 39) that illustrate how this dynamic plays out in the marketplace for handcrafted, vintage, custom, and unique goods.

We know that shipping remains one of the top friction points in our marketplace. For example, in the third quarter, less than 20 percent of listings on Etsy offered free shipping and our research suggests that buyers perceive about half of the items in our marketplace as having high shipping prices. It not only impacts conversion rates on those items, it also damages the brand perception of Etsy overall.

When it comes to speed, however, some customers do not mind paying a bit more to get their purchase sooner, especially when standard shipping is free.

A survey featured in Ecommerce Foundation’s U.S. Ecommerce Report, 2018 (page 52) from Statista, Temando, and Research Now shows demand for various express shipping options and that consumers are at least somewhat more willing to pay for express shipping.

Embedding the cost of standard shipping can help keep prices for express shipping options low and appealing to customers who look for these options. If sellers offer free shipping by embedding these costs in the listing price of products, they typically only charge a few extra dollars on top of that for expedited shipping and avoid losing shoppers due to high shipping prices.

Paying $3 for expedited shipping on a $15 lamp beats $8 for expedited shipping on a $10 lamp.

How to make embedded shipping cost-effective

Even when customers cover the embedded shipping costs, sellers should prioritize securing the most cost-effective carrier service. Multi-carrier shipping technology ensures the best carrier service for every parcel. Depending on proximity, for example, ground shipping can often get a parcel to its destination just as fast as overnight shipping. In this scenario, multi-carrier shipping technology can filter out the unnecessary, expensive options as a result of more-informed decision-making.

Multi-carrier shipping technology can also help sellers avoid unexpected custodial fees incurred by bad addresses and non-compliant labels. When things do go wrong, it provides proactive notifications related to delivery status, disturbances such as weather events, or other problems that may arise.

Omnichannel Retail | 1:21

As shipping costs and fees shrink, substantial savings can be “reinvested” to keep product prices low and competitive while still embedding free shipping costs. Doing so boosts customer satisfaction, increases margins, and makes sellers more profitable.

Sellers should not shy away from free shipping

The fear of high costs should not deter sellers from offering free shipping, which can drive sales for retailers and manufacturers.

For retailers, embedded free shipping often means higher sales at no extra cost. For manufacturers, embracing this concept in their own direct sales and encouraging resellers to do the same leaves room for exponentially more product sales. When implemented the right way with the help of multi-carrier shipping technology, free shipping boosts shopper perceptions and profitability for many sellers.

Learn more about Logistyx’s multi-carrier shipping technology: TME.

Carrier Services Expand to Help Shippers Compete with Amazon

As Amazon unveils new delivery and pickup options, e-commerce companies, retailers and manufacturers selling directly to consumers must contend with rising customer expectations as Amazon sets that bar still higher. Fortunately, carriers are going to great lengths to improve the efficiency of the last mile, the most expensive part of the fulfillment process, and shippers can take advantage of these new carrier offerings to provide optimal service and streamline the customer experience if they choose their carrier services wisely. Let’s have a look at some major changes that have happened in the last two months.

Amazon creates delivery businesses for employees.

Amazon recently announced its plan to offer employees the chance to start their own businesses delivering Amazon packages. The company pays $10,000 in startup costs for an employee’s independent Amazon delivery business, providing them with the necessary resources for their venture. With Amazon decreasing its Prime shipping time from two days to one, it needs to handle its high parcel volume within a shortened delivery time. As employees create Amazon-backed businesses, the company secures more control of its deliveries through a vast network and decreases its reliance on carriers such as USPS or UPS.

Video: Omnichannel Retail | Duration: 1:21 

Shifting partnerships for carriers and retailers.

Amazon’s desire for carrier independence seems to come at a fortunate time, with FedEx announcing it will not renew its air-delivery contract with Amazon. Amazon represented only 1.3% of total sales at FedEx, and the carrier is likely to work with e-commerce shippers lacking but trying to match Amazon’s fulfillment capabilities and provide services to simplify the entire customer service experience. In 2017, Amazon entered a partnership with Kohl’s, allowing customers to make Amazon returns in stores. FedEx is employing a similar strategy by expanding its reach with Dollar General; 1,500 Dollar General stores will enable customers to drop off pre-packaged and pre-labeled FedEx shipments and pick up packages in the stores. Thanks to Dollar General’s presence in rural locations, the FedEx partnership expands its footprint beyond its FedEx Kinkos locations, enables customers in these markets to send and receive packages without traveling too far, and aims to make e-commerce returns a breeze. By using stores as delivery and return hubs, carriers simplify shopping for consumers regardless of who they buy from while presumably increasing use of their shipping services. As the popularity of e-commerce continues to soar to new heights, shippers face considerable pressure to fulfill customer demands effectively. Carriers are eager to help and working hard to deliver new innovative services, especially for the last mile. It’s up to shippers to pick the best carrier and carrier service to ensure timely, reliable and cost-effective delivery. Logistyx’s multi-carrier technology makes this easy while also improving customer service by offering full transparency and delivery status visibility to customers. We can help you keep up with Amazon and the e-commerce revolution. Learn more about our multi-carrier shipping technology.

The Unique Parcel Shipping Needs of B2B Customers

The needs and expectations of business e-commerce customers differ from those of consumers. Companies, for example, don’t always prefer a shipment to arrive in two days, but they do need it to arrive on-time and in the quality and quantity promised. Forrester predicted that by 2019 the B2B e-commerce market would be worth twice that of the B2C market. With investment rising fast, a TMS for parcel shipping can help B2B e-commerce organizations scale their operations more profitably to help meet this demand. Consider some unique aspects of e-commerce fulfillment for B2B companies.

The critical importance of being on-time.

Inherent urgency is ever-present when dealing with B2B customers. While consumers rarely want to wait, outcomes are typically less impactful when an order arrives late. For businesses, entire manufacturing operations can stall when critical components fail to arrive on time and assembly lines grind to a halt. B2B customers need dependable deliveries to reliably help them replenish parts and products to prepare for sales cycles, and a TMS for parcel shipping ensures real-time visibility for all vested parties and full transparency of order status even as a package moves from carrier to carrier. Unexpected delays trigger customer notifications, and more proactive steps can be taken to resolve the issue. So, what matters most when shipping to B2B customers? What can be done to keep deliveries arriving on time and customers well-informed?

Nurture your relationships with carriers.

get the ebook: critical capabilities of a tms for parcel shipping

Developing relationships with carriers should be a top priority. These relationships allow shippers to better serve B2B customers by keeping shipping costs and fees low and ensuring reliable on-time deliveries, but many B2B shippers don’t need a huge carrier network. Often, less is more. Due to the nature of B2B e-commerce, work typically falls into a routine or cycle in which inventories need to be replenished at somewhat-regular intervals. Many B2B customers prefer to work with a smaller group of the most dependable carrier services, rather than including as many options as possible.

Don’t get caught up on the bells and whistles.

Dependable, consistent on-time execution and order status visibility will keep B2B customers happy, but many will never request or need expedited shipping. Since B2B shipments tend to be much larger, expedited shipping can be cost prohibitive. Plus, business customers rarely need this, opting instead to plan ahead to avoid incurring these costs. Same-day and even next-day delivery are even more rare in this environment. B2B customers also don’t need locker pick-ups, in-store pickups, and other communal delivery options. With top requirements being consistent on-time delivery and order status transparency, B2B customers mostly need suppliers to be very good at the essential elements: shipping large deliveries in a timely and cost-effective manner.

Engage in regular feedback.

Also important in B2B shipping, receiving feedback from business clients helps ensure their satisfaction. Receiving this feedback makes it easier to identify problems early while they can still be addressed proactively. While a consumer may order from a business only once, B2B customer relationships tend to represent more orders and higher order values. With a propensity to replenish stock of parts, supplies and products, these relationships should be nurtured and developed over time, because losing one B2B customer can negatively affect the bottom line well into the future. Investing time to collect feedback and proactively address any problems that may arise can pay big dividends in client retention.

Invest in the right TMS for parcel shipping.

Clearly, the stakes are much higher for mastering the B2B shipping experience; it is important to realize what to seek out in a TMS for parcel shipping. It should of course improve the status of carrier procurement, fulfillment operations, customer service, and finance, but not all solutions are created equal. Make sure to seek out a TMS for parcel that provides a host of helpful features, including:

  • Real-time delivery status updates and visibility to proactively respond to potential problems and deliver superior customer service
  • Full integration and real-time “best fit” selection of carrier services, including global carriers when necessary
  • Full carrier compliance
  • Rate simulations and what-if analyses
  • Performance reporting and analytics to fine-tune transportation strategy

To discover how Logistyx’s TMS for parcel shipping can better serve B2B customers and shippers, contact us today.

Ken Fleming Shares Insights for Controlling Parcel Shipping Costs in Total Retail

Logistyx Technologies President and Chief Sales Officer Ken Fleming recently offered key insights around the importance of giving careful consideration to the most profitable ways to ship parcels. As e-commerce and the need for expedited parcel shipping continues to grow, retailers, manufacturers and other companies need the right tools to look beyond a carrier’s base rate to successfully navigate the complex and crowded field of service charges and added fees to achieve cost savings. Fleming shares essential questions shippers can ask themselves to simplify this process and better understand the variables for creating an optimal carrier strategy to effectively control costs.Read more from Ken Fleming on Total Retail: “Controlling Shipping Costs Means More Than Just Comparing Base Rates, Part 1.”

The Transformation Underway in Parcel Shipping

According to a recent report by Accenture, the parcel shipping industry is projected to grow 9% annually to more than $343 billion globally by 2020. Not surprisingly, Accenture’s research shows that as a result of these projections, firms around the world are scaling up to meet future consumer demand – expanding capacity and modernizing networks.In the wake of these findings, Ken Fleming, President and CSO of Logistyx Technologies, was interviewed by Bob Bowman of SupplyChainBrain on how parcel shipping is changing and what the future may hold for shippers and consumers alike. As Ken explains, “the very definition of ‘what is a parcel’ is changing.” Digitally connected buyers, looking for lower prices, greater convenience and a seamless experience when purchasing, receiving and returning products, are forcing manufacturers, retailers and 3PLs to rethink traditional parcel delivery. 

A New Parcel Shipping Strategy Begins with Technology

Ken suggests that thoughtful companies are implementing new technologies to focus on this shift and lay the foundation for a global parcel shipping strategy. They understand their traditional carrier networks are no longer enough to satisfy same-day/next-day e-commerce fulfillment worldwide, and therefore they’re leveraging technology to quickly expand their carrier network to include regional last-mile carrier services as well as up-and-coming couriers such as Uber. The right technology will also allow these companies to manage and optimize these myriad services, increasing revenue per shipment and meeting consumer delivery expectations each time a parcel leaves the warehouse. Ken also highlights that many manufacturers are now deploying a “3D print and ship” strategy to manage rising inventory and shipping costs. As these savvy manufacturers are finding, the combination of 3D printing and sophisticated parcel shipping management packs a powerful one-two punch that’s enabling them to:

  • Significantly reduce their inventory and production costs
  • Slash their shipping expenses
  • Accelerate delivery times
  • Provide a faster and on-demand customer experience
  • Say farewell to third-party resellers, long-distance carriers and other middlemen in their supply chains

Carriers Don White Gloves

Also on the horizon: In an effort to differentiate the delivery experience for consumers seeking personalization and customization, Ken cites that many shippers are now offering (and carriers are providing) “white glove” delivery service. For example, a consumer orders a bike online, and not only is the bike delivered the same day or next day, but the carrier assembles the bike and disposes of the packaging. States Ken, “I don’t know that I’d say customers are ‘willing’ to pay for this extra white glove service, I’d say that more often than not, they don’t know they’re paying. It’s an embedded fee in the cost of the product.”


Video: The Critical Capabilities of a TMS for Parcel Shipping | Length: 46 sec

Focus on the End User

Accenture reports 80% of retailers see a positive and measurable impact on customer satisfaction by offering multiple delivery options to shoppers. Whether there’s a consumer or a business on the end of the purchase, Ken recommends its important to recognize the buyer now has many more choices and options for delivery services. Successful companies will focus on their end users and leverage technology to deliver on the buyer’s wish for better last mile service that keeps them in control of when, where and how their products are delivered. Watch the full interview.

Make the Case for a Transportation Management System for Parcel Shipping

David Hogg, VP Business Development of Logistyx Technologies, recently shared his thoughts with Logistics Management explaining why implementing a Transportation Management System (TMS) for parcel shipping is a key ingredient in manufacturers’ and retailers’ omnichannel distribution formula. As David explains, the fastest-growing shipment segment due to increases in multichannel retail, e-commerce in B2B, and same-day delivery offerings, is parcel shipping. It’s a critical transportation component for any product-based company. The problem, however, is that most companies continue to operate in “reactive” execution mode for parcel and are therefore missing the opportunity to optimize and consolidate their parcel shipping. States David, “In the past, organizations were happy with any year-on-year e-commerce growth. Today, the same companies are getting 20% or more of their revenues through online channels, and their CFOs are thinking beyond sales goals and demanding better optimization of those channels.” This means shippers that invest in multi-carrier parcel shipping systems stand a better chance of keeping costs in check, their customers happy and the bottom lines intact. “Even for a domestic shipper, a multi-carrier parcel system is an asset because the systems already in place simply can’t optimize transportation costs,” says David. “The company that’s using a single parcel shipping company can’t access the broadest range of parcel services from that provider and the many other parcel carriers available on the market.”

Enter: The TMS for Parcel Shipping

get the ebook: critical capabilities of a tms for parcel shippingA multi-carrier solution that gives manufacturers, distributors and retailers a voice and a choice, a TMS for parcel shipping enables informed parcel shipping decisions in a fraction of the time otherwise required. It eliminates information silos and synchronizes all data points for reporting. From visualizing the impact of changes in carrier contracts and rates to proactively notifying a customer of a delivery event, parcel TMS users make informed parcel shipping decisions. The best carrier contracts are secured, facilities and inventory are optimized for planned order fulfillment, and carrier service selections are made to align with client delivery expectations and cost impact. When these are complete, shippers maximize revenue per shipment and eliminate the time, money and labor resources necessary to address post-shipping problems. And because the solution offers fluid integration with WMS, ERP and larger planning systems, it helps companies develop a streamlined shipping ecosystem. “Logistics managers get one platform to do everything—from basic domestic shipments to the most complex international shipments that you can think of,” says David. And the benefits extend beyond the logistics manager.

For the CEO

On a mission to help their companies grow in even the most uncertain, resource-constrained environments, CEOs are driven by growth and profit—something a TMS for parcel shipping supports with its end-to-end supply chain capabilities. For them, being able to reach a larger potential audience of customers without having to be tied to a limited number of carriers is the Holy Grail. “From a CEO’s perspective, it’s about being able to push the boundaries of what their organizations are capable of,” says David, “and then constructing a customer proposition from that.”

For the CFO

As the senior executive who is responsible for managing a company’s financial actions, tracking cash flow, analyzing its financial strengths (and weaknesses), and proposing the best corrective actions, CFOs have a lot on their plates right now. Top of mind for many of them are rising transportation and labor costs, both of which can quickly cut into a company’s bottom line. Rather than watch that happen, many of them are advocating for a multi-carrier TMS for parcel shipping in a world where huge carriers like UPS and FedEx are writing the rules. By using a TMS to handle freight invoice audit, for example, a company that spends a good portion of its operating expenses on shipping every year can achieve substantial savings—music to the CFO’s ears. “For every $1 million that a company spends on freight annually, roughly $60,000 of that is at risk of being overcharged in some way,” says David. “That’s a lot of money just slipping through that CFO’s hands.” To hear more from David and learn how you can optimize your parcel shipping, download Logistics Management’s: Making the Case for a Transportation Management System for Parcel Shipping.