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4 Reasons Why It’s the Right Time to Invest in a Cloud Multi-Carrier Parcel Management System

Investing in new technology might seem unreasonable given today’s climate, but companies with a growth mindset are actually moving forward with new technology implementations, and in particular with cloud multi-carrier parcel management systems, to ensure that when the economy rebounds, they have the competitive edge.  Rather than plan for a return to “normal,” these businesses are instead using this time to redefine “normal” and prepare their supply chains to compete and win in a new landscape, with sustained increases in e-commerce and omnichannel distribution occurring across most industries.

Here are four reasons why a cloud multi-carrier parcel management system will be instrumental in this “new normal:”

1. Cloud Multi-Carrier Parcel Management Systems Digitize the Supply Chain

One way to prepare supply chains for the new normal is to digitize supply chain management and move the supply chain technology stack to the cloud.  This will improve the speed, accuracy, and flexibility of the supply chain by building a single source of truth, and a digitized supply chain improves a company’s ability to anticipate risk, improve transparency and coordination across the supply chain, and manage the issues that arise from increasing complexity.  Retailers with cloud multi-carrier parcel management systems have had the necessary visibility and flexibility to move inventory and use stores as distribution centers during the COVID-19 outbreak.  In flexing these omnichannel fulfillment muscles, they’ve been ahead of the game.  Others are learning from their example and positioning themselves accordingly to prepare for the next disruption.

2. Cloud Expands Transportation Networks

Another way to prepare supply chains for the “new normal” is to expand the transportation network.  In the early stages of a business’s growth, a single-carrier system may make sense because order volume isn’t high enough to warrant using more than one carrier service, but when online sales increase and customers are looking for personalized delivery (BOPIS, parcel lockers, etc.) shippers have no choice but to onboard new carrier services to meet customer expectations while keeping costs palatable.

ebook logistyx quadrant Choosing a TMS for Parcel ShippingA cloud multi-carrier parcel management system enables shippers to leverage multiple carrier services, effectively “rate shopping” among the carriers in its transportation network to identify the most cost-effective service for every parcel, accounting for factors such as origin, destination, lead time, business rules, and more, ensuring every shipment is in compliance with each carrier’s labeling and communication standards, as well as with any applicable trade regulations.

In addition, cloud multi-carrier shipping software enables shippers to easily use “zone skipping” (also known as “hub induction” or “direct injection”) to improve customer service and decrease transportation costs. Zone skipping occurs when multiple customers’ orders are consolidated for the first leg of the delivery journey and then inserted into a parcel carrier network for the last-mile delivery. This is especially beneficial for cross-border shipping because it significantly simplifies end-to-end logistics and decreases customs clearance costs.  The approach also provides greater flexibility since shippers can select local carriers in different countries and regions that have optimal delivery networks for serving their customers.

3. Cloud Multi-Carrier Parcel Management Systems Optimize Transportation Network Strategies

Conditioned by ecommerce behemoths, customers now have high expectations for order fulfillment. They demand more than just easy product selection and ultra-fast or same-day delivery; they also want flexibility in both delivery location and delivery time, and real-time updates throughout their order’s journey. And just because there’s a global pandemic doesn’t mean these customer expectations have changed. On the contrary, many people are becoming more and more used to rapid delivery and “Amazon-like” customer experiences since being quarantined at home.

Unfortunately for many shippers, these expectations push resources to the breaking point, making it more difficult to think strategically about smart ways to limit shipping costs. However, those who understand what’s at stake with order fulfillment and commit to reducing costs, providing optimal service, and streamlining the customer experience, often turn to cloud multi-carrier parcel management systems to make gains happen quickly.

The right cloud multi-carrier parcel management system will include Business Intelligence that enables shippers to take a data-driven approach to optimize their transportation network strategy to efficiently ship goods worldwide at the lowest possible cost while meeting or exceeding customer expectations.  Business Intelligence will provide detailed insight into current costs, including total shipping costs, shipping costs down to the SKU level, costs by carrier, carrier service levels, on-time delivery percentages, accessorial fees, and more.  These analytics can then be used to identify opportunities to save money, improve customer service, or both.

For example, it may be standard operating procedure to book the least expensive carrier on a lane. However, it’s possible the least expensive carrier is also late 40% of the time. While anecdotal evidence might not be enough to build a case for switching to a slightly more expensive carrier, hard data can. With data, it’s easy to build a case for pivoting to a carrier with better on-time delivery percentages to improve the customer experience and win repeat business.

4. Cloud Systems Improve the Customer Experience

A state-of-the-art cloud-multi-carrier parcel management system will include a Control Tower, giving shippers a heightened level of visibility into an order’s journey from its point of origin to its point of destination, 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 cloud multi-carrier parcel management system 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.

The Freedom to Be Nimble

Cloud multi-carrier parcel management systems improve order fulfillment efficiency, giving shippers the freedom to be nimbler, to offer customers more flexibility, and to surpass competitors by:

  • Providing fast, flexible delivery services, increased transparency, and proactive responses to individual needs
  • Identifying and quickly onboarding new carriers to better leverage last-mile services and expand into international markets
  • Tracking compliance and on-time delivery rates with an eye toward correcting problems
  • Uncovering savings opportunities with Business Intelligence

Seeking more information about why now is the right time to implement a cloud multi-carrier parcel management system, despite today’s economic climate? Watch this webinar with Ken Fleming, President of Logistyx: The New Definition of Multi-Carrier Parcel Shipping.