Make the Case for a Transportation Management System for Parcel Shipping

David Hogg, VP Business Development of Logistyx Technologies, recently shared his thoughts with Logistics Management explaining why implementing a Transportation Management System (TMS) for parcel shipping is a key ingredient in manufacturers’ and retailers’ omnichannel distribution formula.

As David explains, the fastest-growing shipment segment due to increases in multichannel retail, e-commerce in B2B, and same-day delivery offerings, is parcel shipping. It’s a critical transportation component for any product-based company. The problem, however, is that most companies continue to operate in “reactive” execution mode for parcel and are therefore missing the opportunity to optimize and consolidate their parcel shipping.  States David, “In the past, organizations were happy with any year-on-year e-commerce growth.  Today, the same companies are getting 20% or more of their revenues through online channels, and their CFOs are thinking beyond sales goals and demanding better optimization of those channels.”

This means shippers that invest in multi-carrier parcel shipping systems stand a better chance of keeping costs in check, their customers happy and the bottom lines intact.  “Even for a domestic shipper, a multi-carrier parcel system is an asset because the systems already in place simply can’t optimize transportation costs,” says David. “The company that’s using a single parcel shipping company can’t access the broadest range of parcel services from that provider and the many other parcel carriers available on the market.”

Enter: The TMS for Parcel Shipping

A multi-carrier solution that gives manufacturers, distributors and retailers a voice and a choice, a TMS for parcel shipping enables informed parcel shipping decisions in a fraction of the time otherwise required.  It eliminates information silos and synchronizes all data points for reporting.  From visualizing the impact of changes in carrier contracts and rates to proactively notifying a customer of a delivery event, parcel TMS users make informed parcel shipping decisions.  The best carrier contracts are secured, facilities and inventory are optimized for planned order fulfillment, and carrier service selections are made to align with client delivery expectations and cost impact.   When these are complete, shippers maximize revenue per shipment and eliminate the time, money and labor resources necessary to address post-shipping problems.

And because the solution offers fluid integration with WMS, ERP and larger planning systems, it helps companies develop a streamlined shipping ecosystem.  “Logistics managers get one platform to do everything—from basic domestic shipments to the most complex international shipments that you can think of,” says David.

And the benefits extend beyond the logistics manager.

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

For the CFO: As the senior executive who is responsible for managing a company’s financial actions, tracking cash flow, analyzing its financial strengths (and weaknesses), and proposing the best corrective actions, CFOs have a lot on their plates right now. Top of mind for many of them are rising transportation and labor costs, both of which can quickly cut into a company’s bottom line.

Rather than watch that happen, many of them are advocating for a multi-carrier TMS for parcel shipping in a world where huge carriers like UPS and FedEx are writing the rules. By using a TMS to handle freight invoice audit, for example, a company that spends a good portion of its operating expenses on shipping every year can achieve substantial savings—music to the CFO’s ears.  “For every $1 million that a company spends on freight annually, roughly $60,000 of that is at risk of being overcharged in some way,” says David. “That’s a lot of money just slipping through that CFO’s hands.”

To hear more from David and learn how you can optimize your parcel shipping, download Logistics Management’s: Making the Case for a Transportation Management System for Parcel Shipping.