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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.

How a Transportation Management System (TMS) for Parcel Shipping Empowers Shippers

A Transportation Management System (TMS) for parcel shipping helps manufacturers, retailers, and logistics service providers better manage their parcel shipping execution, uncover inefficiencies, and unlock opportunities to improve customer service.  According to Gartner in the 2019 Market Guide for Multicarrier Parcel Management Solutions (Gartner subscription required) “parcel and last-minute delivery continue to be the fastest-growing shipment segments due to increases in multichannel retail, e-commerce in B2B, and same-day delivery offerings.”  Further, “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.”

As TMS for parcel shipping solutions continue to evolve, offering a SaaS delivery model as well as state-of-the-art features such as Control Tower visibility and Business Intelligence, it stands to reason more shippers will turn to TMS for parcel shipping solutions to quickly scale their shipping operations while keeping costs in check.

Shippers Face Challenges Today

Modern shippers face many challenges, including a rapidly changing distribution landscape.  According to Inbound Logistics, while traditional supply chains included master distributors, retailers, and consumers, modern supply chains have evolved to include all parties: consumers, resellers, liquidators, third-party resellers, and more – worldwide.  Unfortunately, in many organizations, logistics processes weren’t designed to handle such a convoluted network – let alone the surge in e-commerce, an increase in globalization, or the growing need for omnichannel distribution.  A TMS for parcel shipping, therefore, proves its value by enabling shippers to navigate these market dynamics successfully.

The Power of Data

get the ebook: critical capabilities of a tms for parcel shippingMost shippers realize a TMS for parcel shipping fuels data-driven decision making. What they may not realize is how substantial the benefits of data-driven decisions are. Data is the “holy grail” of modern transportation, and data-driven processes, ranging from delivery exception management and reporting to rate simulation, can quickly elevate parcel shipping related discussions from the warehouse to the C-suite.  Instead of spending countless hours requesting quotes and comparing rates, relying on dozens of carrier portal logins to track delivery movements, and manually reconciling carrier invoices, TMS for parcel shipping solutions automate and inform these routine tasks.  This enables organizations to quickly and cost-effectively scale operations. The system handles the legwork of parcel shipping management, so users can spend more time optimizing carrier service selection and eliminating errors that result in accessorial fees and surcharges – managing toward KPIs and driving cost savings.

Additional Benefits of a TMS for Parcel Shipping

The use of a TMS for parcel shipping offers additional benefits, including:

Scalability. Most TMS for parcel shipping solutions today include rate shopping, label printing, and delivery tracking for high shipment volumes. However, it’s essential to look for solutions that position your organization to really scale – in terms of market access and/or functionality.  As e-commerce continues to increase, consumers’ same-day delivery expectations grow, and omnichannel distribution strategies become the norm, scalability will be crucial to remaining competitive and overcoming obstacles. Also, look for a TMS for parcel shipping solution that provides flexible delivery models, including SaaS.  SaaS TMS solutions are turnkey technology, allowing you to respond immediately when your needs change without incurring additional (and unplanned) IT budget or requisitioning additional personnel.

Carrier network.  Demand for next-day and same-day delivery continues to increase, as does the complexity of last-mile delivery.  This dynamic means new carrier services could be in play before you know it. Seek TMS for parcel shipping solution providers with a breadth and depth of carrier configuration experience so you can quickly on-board new carriers and compare rates between the individual services they offer. An expanded network of contracted carriers means you get the best value for every destination, delivery date, and product.  In addition, working with more carriers can enable scalability within your network.

Cross-border compliance.  If you’re already shipping internationally in high volumes and at high velocity, or if there’s any chance your organization will expand its footprint across borders, you need a solution provider that guarantees cross-border compliance.  Unexpected delays at customs due to incorrect or incomplete labels and documentation will compromise your on-time delivery and perhaps impact your customer retention.  Therefore, you want a TMS for parcel shipping solution that can automatically identify and provide the appropriate documentation for any shipment.

Transportation spend analytics. A modern TMS for parcel shipping also includes an assortment of automated freight auditing capabilities, such as isolating accessorials to keep them under control. Be sure to find a solution provider that allows your finance and management teams to easily measure actual transportation costs against budget and report on spend, as well as to run reports that identify opportunities to deploy different multi-carrier parcel delivery strategies that yield greater returns.

Parcel consolidation. Parcel consolidation is critical to keeping parcel shipping spend in check.  If you’re shipping large amounts of orders to the same corner of the world, there’s no need to pay the highest price for every parcel. You can save on shipping costs by identifying a TMS for parcel shipping solution provider that can execute your consolidated parcel shipments and find the best rate across carriers for any destination.

Seamless integrations. Integration between the TMS for parcel shipping and other supply chain systems, including the ERP, WMS, and OMS, reduces the risk of human error, which naturally increases performance. In addition, responsiveness is a critical ingredient in the recipe for business success.  As industries change, organizations must be able to rapidly pivot – whether it’s a new product on the market or changes in customer behavior.  And let’s face it: when it comes to parcel shipping, changes in customer behavior are occurring daily.  Suddenly, customers want their products next day.  Or same day.  Or delivered to a local retailer.  Or delivered to a local parcel locker.  When your parcel shipping technology is integrated to other systems of record, you enhance the flow of products both within and without your facilities, turning operations toward omnichannel success and future proofing your organization against additional changes to come.

Integrating systems can also help an organization respond to internal changes. When all business functions take a holistic view of data, decision-makers can identify trends and areas for improvement. These can then be addressed proactively, rather than when problems occur.

Put a TMS for Parcel Shipping to Work in your Supply Chain

Without a TMS for parcel shipping, shippers are ill-equipped to handle the changing demands of customers and the expansion of the global supply chain.  To learn more about how a TMS for parcel shipping can empower your organization to scale shipping volumes, enter new markets, and implement new distribution channels, download our e-book:  Do Nothing to Create Shipping Efficiencies, and Cost of Delivery Will Increase.

Logistyx Recognized as Representative Vendor by Gartner

Logistyx Technologies was recognized for the second time by Gartner in the 2019 Market Guide for Multicarrier Parcel Management Solutions (Gartner subscription required). We believe this serves as a validation of our SaaS-based Transportation Management System (TMS) for parcel shipping and our highly valued global carrier services network and Business Intelligence capabilities.

According to the report, “although multicarrier parcel management is mature in some retail and distribution environments, many companies have large parcel operations in other areas of their businesses, or they are not traditional shippers but have a large parcel shipping need.”

In addition, “parcel and last-minute delivery continue to be the fastest-growing shipment segments due to increases in multichannel retail, e-commerce in B2B, and same-day delivery offerings.” Further, “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.”

Translation: the debut of our innovative TMS for parcel shipping, TME, is intersecting with a significant need in the marketplace.

get the checklist: choose the right tms for parcel shippingWith Logistyx TME, shippers  leverage a SaaS-based solution to achieve on-time delivery while significantly reducing transportation costs.  Our expertise includes 8,500 carrier service configurations, thereby equipping Logistyx customers to leverage rate shopping and simulation tools across their contracted carrier network – no matter how vast or global in nature – to determine the ideal combination of carrier services in real time, based on factors such as price, capacity, service requirements, and performance.  Control tower visibility and dashboard reporting enable proactive delivery event management and carrier performance monitoring, and advanced freight audit capabilities allow companies to verify invoice accuracy before issuing payment and find potential savings.

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.

Discover how you can leverage these services and ship around the world – faster, smarter, and for less.

 

Gartner “Market Guide for Multicarrier Parcel Management Solutions,” Bart De Muynck, et al, 25 July 2019

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

 

Aimee Tierney Shares Holiday Fulfillment Tips for Retailers with EPSNews

As sales (and shipping) volume rise within the peak holiday shopping season, so do the stakes. Retailers need to be attentive to the potentially heightened expectations and challenges that come with transporting high-value products this time of year. Deliveries need to be on-time to keep customers happy, particularly as consumers increasingly demand same-day or next day delivery and expectations include special holiday offers and discounts.

headshot of Aimee Tierney VP Sales Logistyx
Aimee Tierney, Vice President of Sales, Logistyx Technologies

For those fulfillment teams shipping next-day deliveries via overnight carrier services, they’re almost certainly overpaying and adding to their cost of distribution. This is especially true during the holidays when consumers’ love of buying electronics and other tech products goes into hyperdrive.

In a recent article for EPSNews, Logistyx Technologies Vice President of Sales Aimee Tierney shares some essential holiday fulfillment tips to help retailers boost service and cut costs – no magic sleigh required! Aimee provides insights on selecting the most appropriate carrier for each order, addressing the impact of accessorial charges, and making parcel delivery more transparent.

Read Aimee’s full article on EPSNews: “Fulfillment Tips for the Holidays – Boost Service & Cut Costs

SaaS vs. Hosted vs. Hybrid: Which TMS for Parcel Shipping is Right for You?

Not every TMS for parcel shipping out there, several of which are objectively great, is ideal for your company.  After all, your business has a strategy, infrastructure, and budget specific to you, and this landscape might be very different than even your best competitors.  Finding the best solution – and the best delivery model for it – comes down to clarifying your needs and articulating what you’re looking to achieve with a TMS for parcel shipping.  Only then will you be able to determine which TMS – and which delivery model, SaaS, hosted, or hybrid – can improve your specific shipping environment.

Three Basic TMS Delivery Models

There are a few different delivery models for TMS for parcel shipping solutions: software as a service (SaaS), hosted, and hybrid. Each delivery model has its advantages and disadvantages, and the ideal delivery model for your shipping environment depends on a variety of factors.

Software as a Service (SaaS) TMS for Parcel Shipping

A SaaS, or cloud-based TMS, is a parcel shipping solution that is accessible to users via the internet and is managed by a third-party vendor. Rather than installing and hosting the software locally on your servers, you basically “lease” it on a fee basis.

A SaaS delivery model improves scalability, accessibility, and security – seamlessly connecting people, processes, and third parties to your parcel shipping operations in real time, regardless of location and with minimal upfront costs and IT investment. All users can execute, track, and analyze parcel shipping in a single solution – improving reaction time, collaboration, and decision-making accuracy.

And since the solution provider hosts and maintains the SaaS TMS solution, the software doesn’t monopolize space on your servers or consume your IT resources. The solution provider is responsible for all upgrades, repairs, and support, which means the solution deploys faster and enables you to realize a return on investment quickly — without the hit of an initial investment and with the benefit of accelerated implementation and integration processes.

Also important to note: an additional benefit of a SaaS model is security. A reputable SaaS TMS for parcel shipping vendor will potentially provide more robust data security than you could yourself – particularly if you lack deep IT resources, staff, controls, or expertise.

All told, however, this does mean the solution provider ultimately “holds the reigns” for the tools, technology, and user experience.  As you evaluate solution providers, make sure they’re transparent about their product roadmap (and willing to seek client input into it) and/or are willing to customize the solution for clients with unique features and functionality needs.

Hosted TMS for Parcel Shipping

get the ebook: critical capabilities of a tms for parcel shippingA hosted, or on-premise, TMS delivery model is exactly that – the solution is hosted on your premises (aka your servers). This means the system is reliant on your network and your IT resources. While this can mean faster LAN speed and file access, it also means you need the right infrastructure in place to manage your system’s security, maintenance, IT, upgrades, and support.  Many companies find that as they scale (think e-commerce), they quickly become underwater.

For those businesses in highly regulated industries, however, the decision might already be made for them as to whether to house their applications on premise.  And in general, on-premise systems are much easier to modify.  As a result, many organizations, especially in niche industries with unique shipping processes, prioritize the ability to customize the solution to their specific needs and requirements and implement an on-premise solution.

Hybrid TMS for Parcel Shipping

A hybrid TMS for parcel shipping combines both SaaS and hosted solutions. From the user’s perspective, there’s only one TMS for parcel shipping system in place, but a peek at “the plumbing” will reveal both cloud-based and on-premise servers at work.

A hybrid TMS for parcel shipping solution is ideal for organizations that want control over where their data is stored but realize the benefits of global accessibility. For example, you might store sensitive customer data on your private cloud and use a public cloud to manage the rest of your shipping operations.

Why a SaaS-Based TMS for Parcel Shipping Solution May Be Best 

Today, most organizations prefer a SaaS-based TMS for parcel shipping solution over their hosted or hybrid counterparts.  In fact, according to Gartner, global SaaS revenues could hit $113.1 billion by 2021, a 30% increase from 2019. The reason for SaaS’s rise in popularity? Companies are attracted to SaaS’s fast implementation times, minimal support requirements, accessibility, scalability, and cost.

Implementation Time

A SaaS TMS for parcel shipping solution enjoys a significantly faster implementation time than that of a hosted or hybrid solution.  Essentially, it’s ready from the moment the contract is signed.  SaaS solutions can be deployed in as little as a few weeks, whereas a hosted or hybrid solution can take months. And because SaaS TMS solutions are cloud based, they’re more time-efficient when it comes to sharing and managing shipping data on an ongoing basis.  This means you receive a double benefit: time savings upfront and time savings over the long-term.

Support

If you don’t implement a SaaS TMS for parcel shipping, your IT team will be responsible for fixing bugs, deploying upgrades, and identifying ways to optimize your technology. This is expensive, and it will consume a significant amount of resources in the form of time and labor. In addition, your needs will compete for IT resources against other priorities within your organization, and if you’re on the losing end of that battle, your performance will be sub-optimal – perhaps for lengthy periods of time.  Alternately, a SaaS TMS for parcel shipping will have a Professional Services team in place to maintain and optimize your system and help your business evolve.

Accessibility

A SaaS-based TMS for parcel shipping only requires internet access.  There’s no need for users to use a VPN or to be on the office network. This kind of flexibility enables everyone from shipping teams to customer service representatives worldwide to have 24/7 access to your shipping operations. And in a dynamic shipping environment, access results in on-time deliveries.

Scalability

Before implementing a TMS for parcel shipping solution, you need to think long-term and consider how it will scale as your organization grows. If you anticipate that shipping volumes will increase, for example, or that the number of carriers in your network will grow, you need to understand how your solution – and your resources – will manage.  SaaS TMS solutions are turnkey technology, allowing you to respond immediately when your needs change without incurring additional (and unplanned) IT budget or requisitioning additional personnel.

Cost

One of the main advantages offered by SaaS is the financial savings companies can realize.  In fact, for many organizations, a lower total cost of ownership (TCO) is the primary and most attractive benefit of a SaaS-based TMS for parcel shipping, since companies save on human resources to service the application and on overall operating expenses (OPEX).

See Whether a SaaS TMS for Parcel Shipping is Right for You

Your unique business needs will determine whether a SaaS, hosted, or hybrid TMS for parcel shipping solution is right for you. If implementation time, support, accessibility, scalability, and cost are priorities for your organization, a SaaS TMS might be the ticket to improving your parcel shipping operations and generating a quick ROI on the solution.

To learn how to choose the right TMS for parcel solution to meet your business needs, download this checklist.

New Case Study: Master Lock and Open Sky Deploy Logistyx with JDA

Cost savings. More efficient WMS upgrades. Improved decision-making and customer service. These are just a few of the benefits Open Sky helped Master Lock realize, choosing Logistyx Technologies’ Transportation Management Execution (TME) multi-carrier parcel shipping solution and retrofitting JDA’s parcel-handling integrator to work with Master Lock’s version of JDA Warehouse Management.

The custom integration allows Master Lock to ship to Canada without using a separate system and prepares the company for its future WMS upgrade. The solution went live smoothly and handles volume very well.

With Open Sky and Logistyx, Master Lock disproved the notion that major WMS upgrades must precede the shift to efficient, automated parcel shipments. With rate shopping and other sophisticated parcel shipping capabilities, Open Sky’s custom integration helps Master Lock enjoy the benefits of Logistyx Technologies’ TME right away, while setting the stage for smooth and uninterrupted WMS upgrades going forward.

Read more about this custom integration and the results of the effort in our latest case study: Master Lock Cracks the Code with the Logistyx TME Parcel Shipping System Integrated with JDA Warehouse Management.

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.

 

TMS Software: TMS for Freight versus TMS for Parcel

Gaining the control and visibility necessary to ensure cost-effective transportation and on-time delivery: this is the goal of any enterprise shipping goods from point A to point B. TMS software, either for freight or parcel, do just that – and more. The days of manual logistics planning and execution, which made both capabilities virtually impossible, are behind us. The modern logistics landscape now offers state-of-the-art technology that streamlines shipment planning and execution, tracks delivery movements to meet the strenuous demands of customers and saves companies thousands of dollars.

However, before you replace your existing logistics solution and invest in TMS software, it’s important to understand the distinctions in the new solutions available. Once you sort through the details, you’ll have a more complete picture of the technology you need to manage your end-to-end shipping operations – and even scale your shipping volumes in the years to come without adding additional resources.

So, let’s discuss one of the most popular logistics technologies available in the market today: TMS (Transportation Management System) software. This next-gen technology has forever changed how the world’s largest manufacturers, retailers, and logistics providers interact with carriers to improve customer service and increase profits per shipment. But will it make a difference in your business?

What is TMS Software?

get the ebook: critical capabilities of a tms for parcel shippingIn general, TMS software gives shippers visibility and control over shipment processes, from carrier procurement to carrier invoice reconciliation. The AI-powered software offers tools to improve shipment delivery performance while minimizing costs. But the scale, capabilities, and benefits vary from one TMS provider to another. So, what distinctions should you make before diving into further research?

First, understand that not all shipments are the same, and what you’re shipping will make all of the difference in terms of which TMS works best for your company. Are you shipping freight? Or are you shipping parcels? And if you’re shipping both: what percentage of your total shipping volume does each represent? While not all systems specialize in a single type of shipment, you always want to invest in a TMS (or any type of expensive technology!) that caters to your exact business needs – which means it’s time to talk about a TMS for freight shipping versus a TMS for parcel shipping.

TMS for Freight Shipping versus TMS for Parcel Shipping

Freight shipping versus parcel shipping — you might think the difference is obvious: the size and weight of the shipment. And while you’re right, there are underlying considerations that size and weight bring to the surface when choosing TMS software. The system’s access to specific carrier services, for example, will make a major difference in which TMS works for your shipping needs.

Simply put, a TMS for freight shipping is necessary when the shipments:

  • Consist of whole pallets, truckloads, or large shipping containers — essentially any large quantity of goods.
  • Are moved by one or more cargo transportation modes, including trucks, cargo planes, trains, or ships.
  • Arrive in ports, large warehouses, or assembly facilities.

Freight shipping is typically used by commercial shippers that are operating in the middle of the supply chain and are delivering thousands of shipment components to one distribution facility. Freight shipping also has a more stringent tendering process, where the shippers must consider factors such as point-to-point charges or per-mile cost models early in the carrier selection process.

TMS for parcel shipping, on the other hand, usually takes place within these parameters:

  • Shipments are individual, box-sized parcels up to 150 pounds.
  • Shipments are part of an omnichannel distribution model, where multiple delivery locations and stringent delivery times require different carrier services.
  • Shipment destination and ETA are dictated by the consumer.

Parcel shipping is typically used by retailers or businesses​ that operate toward the end of the supply chain.  These companies often ship to separate geographic locations, and accurate time of delivery is a top priority.​ While the shipment itself might be physically easier to handle, stringent delivery times can make parcel shipping a complex venture.​ A TMS for parcel shipping adds value by providing rigorous control over – and visibility into – each delivery movement from the warehouse to the final destination, ensuring on-time delivery is achieved.

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While advancements such as 3D printing in manufacturing are blurring the lines between freight and parcel shipping​, the transportation modes, delivery service requirements, and pricing are usually different.  Therefore, it’s vital to identify your shipment requirements before selecting a TMS.

Learn more about what differentiates one TMS provider from another and download our checklist: Choose the Right TMS for parcel shipping.

 

A checklist for selecting a multi-carrier shipping solution

The ability to quickly adapt to customer demands, open up new markets, or switch service providers is vital in today’s economy. This also applies to parcel shipping – an area of growing importance across all industries in our e-commerce era.

These needs gave rise to TMS-for-Parcel solutions. These platforms offer enterprises the ability to tap into a wide array of parcel carriers and services, increasing flexibility and greatly reducing costs for shipping and IT-integrations. But how do you select the shipping solution that is right for you?

One platform, touching on many processes

get the checklist: choose the right tms for parcel shippingSelecting a multi-carrier TMS for Parcel solution for your business is a serious undertaking. This platform touches on countless processes in your organization, from customer service and warehouse floor to your financial administration and supply chain planning. So making an informed decision is vital. To help you make the right choice, we created this checklist containing the most important points of attention in your selection process for a multi-carrier TMS-for-Parcel solution.

Carriers, services & procurement

The core of any great TMS for parcel solution is a wide array of carriers and services users can choose from. Note that ‘carrier’ does not always fit the description here. Many local branches of global carriers operate as separate entities, each with their own labeling and IT requirements. So always verify if a vendor supports the specific carrier services in your key geographies.

SaaS-software & Cloud-hosting The ability to ship parcels via an application hosted in the cloud, connected to your existing systems via an API or integration. This SaaS infrastructure offers increased flexibility and improved data safety over typical on-premise installations of shipping software.
 
Front-end integrations with e-commerce software and platforms Availability of an off-the-shelf integration/partnership with your current e-commerce systems and platform partners (e.g. Amazon).
 
Back-end connectivity Availability of an off-the-shelf integration/partnership for your current back-end systems such as your WMS, OMS or ERP.
 
API structure & documentation The ease with which the TMS can be integrated into other systems via an API and the level of support in this process (API documentation, sample code, technical project management)

Operational

Carrier library size and system connectivity are both vitally important for a good TMS-solution. Still, the true value of these systems is created on your warehouse floors. The power to operate at scale whilst upholding systems speed is essential for any enterprise shipper. This is where the true differences between vendors shine through, so be sure to pay close attention to these operational requirements.

Labeling, documentation & EDI The output of shipping documentation by the system; is this is only shipping labels or also e.g. customs forms or end-of-day manifests.
 
Business ruling A business ruling engine that automatically books shipments with ‘best-fit’ carriers based on business rules.
 
Consolidation of cross-border shipments Ability to consolidate cross-border shipments going to the same geographic area. By skipping zones and avoiding accessorial charges this significantly reduces costs for cross-border

processing, brokerage, and insurance.

 
Real time performance analysis and rerouting Ability to compare selected carrier services against actual carrier performance to find routing alternatives with lower cost implications and/or faster delivery times.
 
Automatic address verification Ability to verify addresses upfront to prevent costly missed deliveries.
 
Service speed Response time of the API / service when booking shipments and generating shipping documentation.

Tracking & Dashboarding

From a shipper’s perspective, most of the job seems done when the parcels leave your warehouse. But for your customers, this marks just the beginning. The ability to keep your customers, and your customer care team, updated on all shipments in real-time is therefore essential. A great TMS solution not only standardizes the shipping process across carriers; it will also create a uniform tracking experience. Ideally, the system allows you to include your branding in all communication.

Real-time Track & Trace Notifications Tooling to send uniform, branded shipping Track & Trace updates across all carriers
 
Real-time Track & Trace portal Branded website or portal via which customers can Track and Trace shipments in real-time (instead of visiting individual carriers’ tracking website).
 
Handling of exceptions Pro-active signaling of delivery exceptions (e.g. delays or re-routing) .
 
Customer Service Tools Real-time shipping insight into shipments via all carriers, allowing  customer service teams to proactively take action in the case of ‘exception events’.

Reporting & Finance

To make strong and informed business decisions you want to rely on ‘a single source of truth’, in which data is connected across all systems in real time. A powerful TMS solution breaks down data siloes, allowing instant access to financial or carrier performance reporting.

Delivery & carrier performance analysis Ability to monitor the delivery performance per carrier, warehouse or geography.
 
Invoice matching

 

Automated auditing of invoices to identify and adjust improperly invoiced items based on contracted rates, claims and “not shipped” transactions.

Contact us for a free consultation

Whatever your company size or need, from customized labels to parcel shipping software, we have the solutions to save time, save money and make your business more successful. Contact us today and a Logistyx representative in your global region will be in touch.

Logistyx Helps Businesses Accelerate Parcel Fulfillment and Shipping Operations in an On-Demand World

Dot Foods, the largest food industry redistributor in North America, recently selected Logistyx’s SaaS-based solutions to grow and expand its current parcel shipping capabilities to provide higher levels of service as food industry manufacturers and distributors make smaller and more frequent deliveries to customers. Dot Foods chose Logistyx’s TME to seamlessly integrate with its JDA warehouse management system (WMS) to optimize its fulfillment and shipping operations to better accommodate customer needs as the company ramps up its e-commerce capabilities. The joint product offering connects Dot Foods with more than 8,500 global parcel carrier services, including low-cost regional and local operators.

As consumer behavior continues to shift with an increasing demand for smaller, more-frequent shipments to convenient delivery/pickup locations, a wide range of industries are adopting what had been primarily a retail strategy. Many businesses have turned to automated and scalable multi-carrier shipping solutions to better serve customers and generate cost savings. Whether shipping time-sensitive goods for food suppliers or restaurants or determining cross-border tax calculations and cost adjustments on ecommerce orders in light of Brexit’s potential impact on shipping across Europe, businesses around the world can successfully navigate these new market dynamics with the right technology.

A TMS for parcel shipping accelerates and synchronizes the shipping process with greater precision and certainty, making it possible to see what’s happening across the entire shipping ecosystem in real-time and more efficiently meet customer needs in this on-demand world.

Read the full customer announcement to see how Dot Foods is leveraging Logistyx’s TMS for parcels to optimize fulfillment.

8 Reasons Modern Manufacturing Companies Cannot do Without a TMS for Parcel

The current shift from operational efficiency to customer experience is changing the way manufacturers look at the IT-infrastructure of their supply chains. One of the applications spearheading these changes is a Transportation Management System (TMS) for Parcel. Discover the 8 reasons every modern manufacturers cannot do without such a multi-carrier shipping solution.

In our recent white paper, we cover the 7 logistics trends that will change the manufacturing industry in 2020. The common thread in these trends is the increased complexity and volatility of supply chains, caused by the consumerization of sales. Manufacturers open direct sales channels to end customers and the expectations of business buyers now mimic those of consumers.

More sales channels, more carriers

Powered by the consumerization of sales, the manufacturing industry is shipping out more parcels, via more logistics partners and more delivery services. Everything to ensure they meet the demands of modern business buyers.

“As to be expected given the growth of e-commerce, full-pallet only [shipping] profiles are rare. Considering that 40% of the respondents were manufacturers, [the] level of split-case shipping is significant.”

The 2018 Warehouse / Distribution Center Survey on the shift from full-pallet to split-case shipping

Managing carriers – the traditional way

The increase of carrier partners is at odds with traditional views on shipping. For several reasons manufacturers are used to working with one, or at most a select number of delivery partners.

First, bundling parcel volumes into a single carrier contract traditionally produced the lowest shipping costs. This paradigm has since shifted. Today, smart rate shopping with multiple carriers results in even lower shipping costs. Also, no single carrier can meet all modern customer demands. A second major reason manufacturers stuck to a single-carrier strategy is the time-consuming IT process of connecting EPR and WMS systems to the API interface of a carrier.

Those who do ship via multiple, custom integrated, carriers often run into challenges when trying to keep an overview. Pain points include logging into multiple systems to track shipments or needing to combine multiple data sets to generate the correct (financial) reports.

The future of shipping is a TMS for parcel

This contributed to the conception of Transportation Management Systems for Parcel. These systems, sometimes referred to as multi-carrier shipping software, take away the major challenges surrounding carrier management. By making shipping via multiple carriers more efficient and accessible, these systems are at the base of a future-proof supply chain. Discover the 8 reasons why modern manufacturing companies cannot do without a TMS for parcels:

1. Instant access to new carriers and delivery services

The first advantage of a multi-carrier shipping solution is instant access to a large library of carriers and associated delivery services. This translates into huge savings on IT. With these solutions API connections with individual carriers are a thing of the past, drastically shortening the time-to-market for new carriers.

2. Constant up-to-date carrier connections

Many companies also struggle to keep their existing carrier connections up-to-date. for example because delivery services or shipping label specifications change. With a TMS for Parcel solution, you ensure all carrier connections are always up-to-date, again saving valuable IT resources and time.

3. Better negotiation, lower shipping costs

A smart TMS for Parcel solution compares shipping costs between multiple providers. Based on the unique characteristics of shipments (destinations, formats, weights) and desired service levels (delivery speed, insurance) the system instantly selects the right mix of carriers. This is fundamental for better contract negotiations and direct savings on shipping costs.

4. Easily open new shipping locations

Because a TMS for Parcel solution is hosted in the cloud, opening up new shipping locations is simpler than ever. You no longer need on-premise installations or local updates allowing you to scale up (internationally) at an unprecedented speed.

“The Cloud just naturally lends itself toward TMS. After all, most TMS-related data is outside of the four walls of the company anyway, so why constrain your system to just being inside the four walls? ”

Amit Sethi, senior manager of logistics and supply chain at Capgemini

5. Increase in operational productivity

By standardizing and streamlining the shipping process through all carriers a TMS significantly increases operational productivity. The system slots right into existing operational workflows, allowing users to generate all shipping documentation with a single touch. From shipping labels to End of Day manifest and CMRs, regardless of the chosen carrier.

6. Increased transparency for all parties

Successful e-commerce organizations recognize that the customer experience does not stop after a click on the order button. Customers are treated to Track & Trace notifications via SMS or proactive updates in the event of a delay. With a TMS for Parcel solution you also can tap into this trend of maximum transparency. The system not only standardizes the Track & Trace communication across all carriers. It also recognizes when exceptions occur and immediately takes subsequent action.

“People are used to going over Amazon to track shipments, and that capability is now being carried over to B2B transactions.”

Bart de Muynck, research director Gartner

7. Central insight into the performance of carriers

Track & Trace information is not only helpful for the receiving party or a customer care team. The data also contains valuable information about the lead times of shipments. A TMS for Parcel solution uncovers this information via smart algorithms providing a unique insight into the performance of carriers (compared to SLA’s). Valuable information for every logistics manager.

8. Automated auditing of invoices

By comparing source data about shipments and insights from tracking data with carrier invoices, a TMS for Parcel system uncovers differences that translate into great cost-saving opportunities. Especially for high-volume senders who still perform limited or manual audits on invoices.

Conclusion

A TMS for Parcel is about flexibility. With instant access to multiple carriers users can respond to new developments much quicker. Examples include new customer segments or product lines requiring specific carrier services or competing carriers offering reduced shipping rates.

But a strong TMS for Parcel solution offers much more. By analyzing the enormous amount of logistics data, the system discovers unique cost-saving opportunities. Take the real-time selection of the most economical shipping option or the auditing of carrier invoices for example. This layer of data intelligence makes a TMS for Parcel more than just “a collection of carriers”. The system opens new avenues for cost-saving that remain closed if you opt for the traditional in-house integration of carriers.

Are you ready to discover more? Contact us for a free consultation. As a leading TMS for Parcel solution Logistyx Technologies helps enterprise shippers tackle their logistical challenges and discover opportunities to save costs and enhance customer service.

Ready to discover the logistics trends in manufacturing for 2020?

Download the white paper The 7 logistics trends that will radically change the manufacturing industry in 2020today. In this white paper, we cover the logistical trends that every manufacturer must acknowledge to remain competitive in today’s dynamic market.

3 Signs You’ve Outgrown your Shipping Practices

One of the biggest challenges in an organization’s growth is when it becomes evident your shipping environment is no longer working… and yet you’re unsure of what to do next. After all, the processes you’ve painstakingly cobbled together over the years, piece by piece, has brought you to where you are today.

It’s Worked Fine So Far…

Your veteran team members are at ease with the shipping environment you’ve built together. The special amalgamation of spreadsheets, training documents, and carrier workstations feels comfortable. They remember when each piece was added to the puzzle and why. They’re proud of their ability to successfully navigate your shipping “labyrinth”—it’s like a badge of honor to be someone who “gets it.”  Heck – it just might be job security.

But… things are starting to slip. You may notice some team members are overwhelmed and suddenly voicing worry they’re falling “behind,” despite the fact their personal productivity hasn’t changed.  For the first time you might find yourself wondering whether you need to increase staff and looking for month-to-month shipment projections to support your decision – only to come up empty handed. And whenever you train a new employee on the ins and outs of your shipping environment, you’re reminded of just how complex it is.

How do you know when it’s time to abandon your formerly tried-and true shipping practices and embrace the tools of the future—and how do you tell the differences between them? Read on for three telltale signs you’ve outgrown your shipping environment and the time is right to build something new.

1. You’re Embarrassed When You Teach New Hires Your “System”

When you’re showing a new hire the ropes, do you find yourself over-explaining or justifying why you do things a certain way—and facing a perplexed reaction? Are you repeatedly answering the same questions about where to go for a piece of data or how to locate a particular shipping record? Have you ever said, “Yeah, it’s confusing now, but it will make more sense over time?” These are all signs your existing shipping environment is stuck in the past, and if you’re in a growth phase, it’s only going to get more challenging from here.

But when you implement a shipping system that’s intuitive and centralized – not cobbled together from multiple, disconnected solutions and processes – it’s much easier to not only onboard new employees but also to increase the productivity of your current team.

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

For example, Service Lighting and their online superstore, LightBulbs.com, realizes 80% of their sales through e-commerce. Sales are busiest during the holiday season, when order volume triples and shipping operations handle more than a 200% increase in packages a day.  Originally, LightBulbs.com had six shipping workstations, all with standalone, carrier-provided shipping software. The shipping process was cumbersome because the staff had to enter orders in multiple carrier systems, type in the dimensions of every package, and then manually compare and choose the best carrier rate and service.  “Shipping was our biggest bottleneck,” President Paul McLellan said, “We needed to find a way to automate our process and increase productivity.”

LightBulbs.com implemented a Transportation Management System (TMS) for parcel shipping, gaining the ability to load all carriers onto one platform and automate carrier rate shopping and shipment processing.  As a result, Service Lighting streamlined and improved shipment processing speed and is now handling the same volume of work on two shipping stations instead of six. “We were able to reallocate employees to other areas in the warehouse that needed help,” McLellan said.

2.   You Miss Your Shipping KPIs

Even the best shipping teams will miss a delivery deadline or select the wrong carrier service. However, if these lapses suddenly occur with greater frequency, it could be a sign your existing shipping environment lacks the bandwidth to accommodate growing order volumes.

For example, Faes Group, the leading manufacturer of custom packing solutions in Europe, employed a small team to manually plan its transportation: physically creating each transport order, calling a large number of carriers to verify pricing and schedule transport, and tracking transport movements through phone calls and email exchanges with carriers’ customer service teams.  When Faes Group began to sell its products through e-commerce sites including Amazon, orders increased, delivery service faltered, and pressure mounted.  Said Johan Faes, the founder and director of Faes Group, “Amazon speeds up the process, and if you do something wrong, you get hit hard. If you don’t get your house in order, you can’t sell to a customer like Amazon.”

Faes Group ultimately chose a TMS for parcel shipping to integrate with their large carrier network and automate their end-to-end shipping processes –  gaining the ability to meet increasing order demands without adding staff by automating and optimizing transportation management. Immediate benefits included lower labor costs and improved customer service, and with automated carrier booking and compliance as well as track and trace functionality in the platform, the team directed their attention away from carrier communications and exception management and focused on other value-added activities in the warehouse.

Video: The Critical Capabilities of a TMS for Parcel Shipping 

3. You Can’t Easily Provide Customers with Delivery Information

Think about the steps it takes to tell a customer when their package will be delivered. Do you tell the customer to call the carrier’s customer service number for an update?  Provide the customer with a tracking number and send them a link to the carrier’s website? Fill out a ticket in the carrier’s system and ask the carrier to contact you with an update?  If the process is at all manual or takes hours (heaven forbid days), even for a fairly standard request, then you have your first clue it may be time to consider updating your shipping environment.

For example, as one of the most highly respected and well-known healthcare brands in the world, Bausch + Lomb needs to ensure their product distribution is seamless to maintain their integrity in the industry and keep their customers happy. However, a complex in house system combined with huge growth within the organization was making this difficult to achieve.  Bausch + Lomb was using 25 different carriers, each with their own different services and each with a specific type of bar code that wasn’t always compatible with Bausch + Lomb’s software.  The Bausch + Lomb team had to track thousands of items every week on different carrier sites, which was time consuming, and ultimately the team couldn’t confidently inform customers of exact delivery times.

Bausch + Lomb chose a TMS for parcel shipping to support all carrier services in one complete system, eliminating the need to work on different carrier sites and in different languages.  As a result, they have full visibility – saving at least half a day in labor costs every week and importantly: improving customer satisfaction by providing customers with up-to-date shipping statuses.

Ready for a Shipping System Fit for an Enterprise?

Your shipping practices have served you well. You can be grateful for them without allowing them to hold you back, and if any of these three signs felt familiar, it’s probably time to consider a TMS for parcel shipping. It will create an end-to-end shipping ecosystem – automating processes and centralizing all data so it can be analyzed, reported, and optimized.  It’s an absolute must for dynamic shipping teams in the e-commerce age, and it’s just a click away.

Yes, I want a Demo!