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How Parcel Shipping Execution Fosters Long-Term Customer Loyalty

Conditioned by large, online providers’ innovative services, modern consumers now have high expectations of their shopping experience.  They expect more than just easy product selection and ultra-fast or same-day delivery; they also want flexibility in both delivery location and delivery time, as well as real-time status shipment updates throughout their parcel’s journey. Smart shippers understand these parcel shipping demands and realize that to gain long-term customer loyalty, they need to put the customer – not the product – first.

When it comes to parcel shipping, perhaps the first opportunity to curate a positive attitude toward the product or brand is during the check-out process.  Research shows that buyers carefully assess the available delivery options and personalize the delivery experience to their liking – receiving the product how, when, and where they want it. In fact, a recent study from BigCommerce indicates that 77% of buyers abandon the purchase process if the shipping costs and services are deemed unsatisfactory, and 87% of digital buyers choose a retailer specifically because free shipping is offered.

get the ebook: critical capabilities of a tms for parcel shippingBut beware: offering Amazon-like delivery services and free shipping isn’t enough to win repeat purchases.  The same study also states that if an order is delivered incorrectly, late, or not at all, 29% of end customers won’t order again from the same retailer.  And the lost sales opportunities don’t stop there.  Consumers today share their negative experiences with the world on various social media channels and review sites, which means a bad experience with parcel delivery can quickly lead to the further loss of potential customers.

The right Transportation Management System (TMS) for parcel shipping can help shippers implement new delivery models such as omnichannel and 24-hour delivery while decreasing costs.

Changing consumer behaviors are forcing shippers in myriad industries to embrace digital transformation along the entire supply chain.  For example, with the effective use of data-driven multi-carrier shipping solutions, companies are able to efficiently ship goods worldwide at the lowest possible price and gain a competitive advantage by:

  • Maximizing the customer experience by offering fast and flexible services, increased transparency, and proactive responses to their individual needs
  • Managing carriers to ensure compliance and avoid delivery delays due to incorrect labels and documentation
  • Rate shopping with contractual partners to select the best carrier service for each shipment according to customer preferences and business rules
  • Identifying and quickly on-boarding new carriers to better leverage last mile services and expand into international markets
  • Eliminating labor intensive tasks such as invoice reconciliation
  • Leveraging Business Intelligence (BI) tools to uncover savings opportunities

Keep Customer Loyalty High with Parcel Shipping Execution

Never before has it been so easy for customers to find brands or change suppliers. And with the right TMS for parcel shipping, never before has it been easier for companies to establish and maintain a direct relationship with their customers, reaping trust and retaining their loyalty in the long term.

Discover how a TMS for parcel shipping can help you manage your customer experience. Contact us today.

 

3 Ingredients for a Successful Parcel Shipping Solution

Parcel shipping is hard.  There’s a lot of “stuff” standing between your customers and their purchases, and the roller coaster of events that can take place between a carrier pick-up and delivery is enough to make the most seasoned customer service professional consider running for the door.

Even harder: at the exact moment your parcel shipping is growing more complex, your competition is getting fierce. Today, there are zillions of buying channels your customers can access to purchase products just like yours, some of which offer myriad shipping options – often free of charge.

This means there’s no time to wait.  You have to work now to minimize the “stuff” between your customers and their purchases, and shape positive and consistent buyer experiences. Plus, you have to communicate really well, telling your customers where their product is at each and every stage in the delivery journey. It’s no easy feat, especially if your internal teams lack the necessary tools and technology to align with your carriers.

But with the right parcel shipping strategy and technology in place, you can establish the foundation you need to deliver superior customer experiences – at a palatable cost to you. You can create a parcel shipping ecosystem that promotes productivity and empowers your internal teams and your carriers to work together — better, cheaper, and faster.

The Right Resource

get the checklist: choose the right tms for parcel shippingTo achieve cost-effective parcel shipping, you need to provide your shipping teams with the resources they need to efficiently increase profits per shipment. First on this list is parcel shipping technology, which will drive strategic carrier service selection, help you secure advantageous carrier contracts, and enable you to support your customers throughout their buying journey.

More specifically, parcel shipping technology removes traditional barriers between your internal procurement, logistics, finance, and customer service teams and your external software and carrier partners. For example, parcel shipping technology can alleviate inefficient carrier invoice reconciliation processes or enable your customer service team to proactively send a customer a delivery alert.  It’s about empowerment, automation, and orchestration, which lay the groundwork to help you ship more products across farther distances – cheaper and faster.

3 Ingredients for a Successful Parcel Shipping Solution

On the surface, parcel shipping technology is relatively straightforward.  Implement parcel shipping technology that automatically selects the best carrier service for each parcel shipment according to your business rules and print the label. But, as we know all too well, to squeeze the most profit out of every shipment, you have to go beyond printing the label – integrating your technology with your business-critical systems to leverage business intelligence cross-functionally, measure performance, and react quickly.  And this is more challenging.

With that said, there are three ingredients — integrations and Professional Services, technology, and Business Intelligence  — that are foundational to any successful parcel shipping solution implementation. Here’s what goes into this winning trifecta:

1. Integrations and Professional Services

Despite the impressive functionality in most parcel shipping technology solutions, critical to your success will be how well the technology integrates with both your carriers’ systems as well as your ERP, WMS, OMS and/or e-commerce systems. You need a solution provider with significant integration experience across a broad network of global carriers and world-leading enterprise, e-commerce, and supply chain software providers – in either a blackbox or attended environment.

You also need a Professional Services team capable of evolving your technology instance as your shipping strategy becomes more complex, that’s willing to coach and train your people. You need folks who have your back and on whom you can rely to spearhead the conversation that moves your shipping strategy forward. And you need people that know how to leverage and inform the implementation and integration processes and technologies that streamline your shipping workflows and make distributing and managing your shipping data easier. The list goes on and on, but you get the gist — Professional Services are key.

2. Technology

As your organization matures, your distribution scenarios will likely become more complex. This means there will be more shipments, more carrier services, more warehouses, and more information to manage. Technology can help streamline every stage from carrier services procurement to carrier invoice reconciliation and reporting.  For example, the right parcel shipping technology automates carrier selection, produces all necessary labels and documentation, and helps organizations scale and improve their shipping efforts – even across borders. It gives Customer Service teams 24/7, on-demand access to critical delivery event details, and its dashboards display KPIs such as Total Shipments, Exceptions, Packages In-Transit, Delivered, Late, and Lost.  It automatically compares carrier invoices against expected transportation costs and reports on spend according to geography, business unit, accruals, and GL Coding, to name a few. 

3. Business Intelligence

A huge part of achieving cost-effective parcel shipping has to do with the creation, distribution, and management of information. While it’s a somewhat vague term, “information” includes everything from delivery event alerts and carrier service scorecards to rate simulations, cost accounting, and more. Without accurate information and the proper management of it, your organization will have a harder time securing favorable contracts with carriers. Parcel shipping technology with a Business Intelligence platform will understand how factors such as distance, speed to delivery, density, and package size affect spend within the transportation carrier landscape, and analyze your shipping data in real-time to visualize how and where changes should occur for you to yield greater returns.

Put the Right Resources into Action for a Successful Parcel Shipping Solution

Parcel shipping today is challenging. It’s an on-demand, 24/7, obstacle-ridden environment. And you must keep pace. Parcel shipping technology can provide you with the necessary foundation to bridge the great product discovery-delivery divide and help you move your business forward. Wondering which parcel shipping technology is right for you?  Here’s how to choose the right parcel shipping technology for your organization.

How You Can Use Predictive Analytics to Reduce Parcel Shipping Costs

Predictive analytics has fast become a staple of every industry, and it’s no great surprise. The concept of using data to make better decisions holds water across business types; naturally, it applies to logistics, too. And if done right, your company can use predictive analytics to reduce parcel shipping costs. We’ll examine how, but first, let’s set the stage.

The Necessary Data for Predictive Analytics in Parcel Shipping

If you are beginning your parcel shipping data journey you should consider leveraging what is most readily available. This would include data from three levels of input: shipment level (what was manifested), event/visibility level (track and trace feeds), and invoicing level. More sophisticated organizations will leverage additional data from internal and external sources.

But the truth is, not all data is equally valuable. Therefore, it’s critical organizations understand and add the proper data points into their data structures in order to maximize predictive capabilities around cost savings.

Parcel costs include four key components or variables:

  • Distance
  • Speed to delivery
  • Density
  • Package size

A Business Intelligence platform will understand how these components affect spend within the transportation carrier landscape, visualize how and where changes are planning to (or should) occur, and retain this information as a “profile” that allows you, the shipper, to negotiate with carriers. For instance, if you are implementing changes in fulfillment to increase ship-from-store or locate a new DC, understanding how these changes impact zone and carrier service-level downgrade options are critical. Additionally, planned shifts towards more frequent, smaller-weight shipments would naturally draw negotiations towards lower weight bands and minimum revenue per package.

get the ebook: critical capabilities of a tms for parcel shippingWithout predictive analytics, you’re planning under the assumption the past will repeat itself, instead of building a data vision and creating a model for the future. You’re leveraging the “what was” in planning, even though your profile characteristics may have changed slightly. And those slight changes can have huge impacts on spend…

Bottom line: If you’re not using predictive analytics, you’re placing your company at a competitive disadvantage. Let’s take a look at three key areas where you could be losing — or, with a positive spin, three clear ways in which predictive analytics can help reduce parcel shipping costs.

1. Rate Scenario Analyses

As data availability and data usage increases, so too does demand for simulation analysis.

  • What is the impact of a proposed carrier rate change on spend?
  • What are the available transportation savings with newly proposed carrier options?
  • How will ship-from-store or new DC placement affect spend?

With proper BI tools and an accurate shipping model (profile), you can extrapolate transportation spend impacts across significant data sets. And when you rate or cost your plan against the available contract options, your negotiations/budgets begin to take shape. To do so successfully, level of detail is critical. Like many things, the devil is in the details. Consideration towards use of accessories, fuel surcharges, and dimensional and core fees from each origin to destination are required; all must be calculated, normalized, and segregated across various carrier options.

Once the rate simulation is complete, you need to visualize the spend impacts across variables such as weight breaks, zones, regions, service levels, etc. This visualization will allow you to easily identify areas ripe for further negotiation. And if your data profile uses predictive analytics, you can meet the negotiation challenge head on — because most carriers will have this information, too — and you don’t want to start on your back foot when it comes to negotiations. Lastly, simulations with proposed future DC placements or ship-from-store deployment impacts can have huge effects on use of carrier services.  A rate scenario analysis paints the picture and empowers you to make cost-savvy supply chain decisions that align with your business strategy.

2. Real-Time Responses

Failures in the delivery process can be expensive to correct. Customers can be lost forever, if mismanaged. Effective exception management (visibility) with predictive analytics in parcel shipping facilitates a better customer experience and aids in overall supply chain health. But there are hundreds of types of status messages available from carriers, and it can be overwhelming. With a proper system to retrieve, store, interpret, and action the data, you can proactively manage your customer’s delivery experience.

Successful systems will normalize all of the different status messages available across carriers and place them into problem categories (exceptions) that require a call to action. You should be able to visualize and assign the right resources for real-time response and speedy resolution, minimizing customer service failures and reducing overall parcel shipment costs.

Today, customers not only expect a shipper to know when a shipment is held at customs, a delivery attempt is missed, a weather delay occurs, or a shipment is damaged or predicted to arrive late, they also assume the shipper will proactively work to resolve these problems. Aside from managing the problems, your ability to measure carrier impacts and predict the future can allow you to better meet your customer expectations (manpower) and make better carrier network decisions (report cards) that impact exception management, ultimately reducing parcel shipping costs. It also helps in procurement to understand ‘real’ service performance across a multitude of slicers such as carrier service, geography, weight break, and accessory type to create accurate carrier report cards to be used in the next step – procurement activities.

3. Real-Time Procurement

Finally, predictive analytics in logistics can help you reduce costs by making real-time procurement a real-life possibility. Identifying the ideal combination of carriers requires simulation analysis. If all carriers delivered to all regions with all services 100% on time, this would be a simpler exercise. By aligning your customer commitments and carrier performance and rate simulation tools, you can quickly define the best cost options to meet the service-level commitments of your customers.

By understanding where carriers perform well (and not) and leveraging this information within your procurement simulations, you can rapidly evaluate predicted delivery performance and cost impacts, identifying the optimal carrier service combination based on factors such as service, price, capacity, and quality.

Reducing Parcel Shipment Costs with Predictive Analytics: One Simulation at a Time

Predictive analytics isn’t only for the most adept data scientists among us. It’s for every business. But to get to the point where you can capitalize on all of the great data to which you have access, you need a great system, too. If you lack proper insight into your contract history, or struggle with rate simulation and budgeting, then a TMS for parcel shipping with BI and data analytics is right up your supply chain.

Get started with predictive analytics here.

Ken Fleming Breaks Down the Importance of Customer-Oriented Shipping for Manufacturers

Ecommerce is changing everything in its wake, even well-established and efficient supply chains. In a recent article for Digital Commerce 360, Logistyx President Ken Fleming breaks down how ecommerce revolutionized the B2B world by letting the customer determine where, when, and by whom goods are delivered rather than the supplier.

By saying goodbye to their efficient, but very rigid, supply chains in favor of flexibility, successful manufacturers can prepare for the rapidly changing demands and the wide array of wishes of all their customers.

Read Ken’s full article on Digital Commerce 360: “Manufacturers: Say goodbye to your rigid, if efficient, supply chains

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.