Transportation Management Systems (TMS) for parcel shipping have been implemented within the enterprise order fulfillment process for the last 25 years. However, over the last couple of years (and especially over the last couple of months), demand for these systems from mid-size companies, e-commerce retailers, and omnichannel retailers has increased. More than ever, shippers are straining to fulfill orders on time while decreasing costs, and those without a cloud multi-carrier shipping solution are finding themselves behind.
The only way to surmount the situation is to recognize when it’s time to implement a cloud TMS for parcel shipping. Pay attention to these four indicators:
1. Securing Carrier Capacity is Challenging
Right now, difficulty securing carrier capacity is the primary challenge for shippers without a TMS for parcel shipping, and as capacity tightens, organizations are unable to cover basic shipping needs at affordable rates. A TMS for parcel shipping that guarantees compliance with an extensive number of national, regional, and local carrier services can empower you to deploy a flexible transportation strategy worldwide – improving on-time delivery rates and saving money with each parcel journey. Think about it this way: the more carrier services you have in your network, the more choices you have to optimize your parcel delivery and transportation spend.
2. Transportation Spend is Increasing
A good way to spot unfavorable trends in transportation spend is to keep an eye on net landed cost of goods figures. As transportation spend increases, so too does the net landed cost of goods. In addition, increasing transportation spend during supply chain disruptions such as the COVID-19 pandemic may also coincide with an increase in spot rates, as shippers rush to access available capacity. If either data point surfaces in your reports, it likely makes sense to onboard additional carriers, couriers, or lanes. Growing the carrier network can help any company by introducing more options and capacity into the parcel delivery mix, and companies that want to stay ahead of market dynamics such as delivery capacity shortages or increasing e-commerce volumes have invested in a cloud Transportation Management System (TMS) for parcel shipping that creates flexibility and diversity in fulfillment.
3. Teams Use Multiple Systems to Execute Shipments
There’s no question single-carrier systems are well designed for the carrier they represent. However, working across multiple systems adds precious seconds (if not minutes) to the order fulfillment process. Advanced TMS for parcel shipping solutions give shippers access to multiple carriers within one system and integrate with leading business systems to seamlessly execute shipments, automatically identifying the best carrier service and providing a label that complies with the carrier’s requirements in sub-second time – a marked improvement at a key milestone in end-to-end supply chain execution.
4. Shipping System Updates Cause Disruption
Another key indicator you’re ready to implement a cloud TMS for parcel shipping: system maintenance and updates. On-premise solutions typically incur downtime for regularly-scheduled maintenance and updates. In contrast, a cloud TMS for parcel shipping eliminates this issue. The software provider is responsible for solution upgrades and enhancements, including application maintenance, and most application upgrades can be deployed automatically, eliminating the need for internal IT resources.
Build a Business Case for a TMS for Parcel Shipping
Investing in a TMS for parcel shipping may sound overwhelming, but the right solution provider will help you identify the features and functionality you need to manage fulfillment volume today while infusing scalability and flexibility into your supply chain. To start building your business case, watch our video: The Logistyx Shipping Quadrant