How to Control Parcel Shipping Costs with Business Intelligence

Mike Eisner, Logistyx Vice President, Business Intelligence, recently contributed a guest commentary to Logistics Viewpoints, in which Eisner outlines how manufacturers and retailers can leverage business intelligence to meet consumer expectations for fast delivery, increase revenue per shipment and collaborate better with key partners in the extended supply chain.

Eisner summarizes that globally, we are nearing one in four human online purchasers, and Amazon commands 14% of these global online sales. Within the US, they dominate with +50% market share of online sales, and their ability to deliver on clients’ expectations for same day, workplace, Sunday, pick-up and locker delivery options while also reducing transportation costs has heightened consumers’ delivery service expectations around the world.  Other manufacturers and retailers have taken notice, and to compete, now offer myriad delivery options as well.  However, myriad delivery options have often translated into soaring parcel shipping costs for these organizations.

To contain these costs and increase revenue per shipment, Eisner recommends that manufacturers and retailers large and small need to incorporate business intelligence into their transportation management.  Without it, transportation teams are operating in a silo and decision making becomes flawed.  When data is interconnected from tendering… to parcel shipping execution… to carrier invoice payment, and then synchronized for reporting, transportation teams simplify the complexity of informed decision-making.  For example, in traditional financial audit processes, business intelligence can identify and adjust improperly invoiced items relating to contractual rates, accessories, guaranteed service rebates, claims management, address correction validations or even manifested but not shipped transactions.

Shippers can also use business intelligence to model and compare selected carrier services against actual carrier performance to find routing alternatives with lower cost implications and/or faster delivery times.  A simple example is foregoing use of a premium overnight expedited service level for a carrier, when the lower cost ground option offers the same delivery time at a much lower cost.

Business intelligence can also reveal even more advanced optimization strategies, such as effective ways to position facilities and inventory around the globe.  While these analyses are more complex, the overriding principle – provide near immediate delivery options to satisfy consumers’ need for instant gratification at as low a delivery price as possible – remains.

In total: the results of each business intelligence effort – let alone all – can have a significant impact on cost savings.

To learn more about what Eisner has to say about transforming parcel shipping with business intelligence, read his guest commentary on Logistics Viewpoints: Modern Business Intelligence for E-Commerce Shipping.