How to Turn Parcel Shipping into a Competitive Advantage
With the rise of e-commerce in both manufacturing and retail, product distribution is growing more complex. Long-held benchmarks for what constitutes a competitive advantage – faster, better service – is now standard practice. In fact, for many shippers the hard reality is that three-day shipping is no longer satisfactory, and when customers can’t get their products next-day (or even same-day), they’ll go elsewhere… and the risk amplifies when customers can get next-day or same-day delivery free.
Unfortunately, for many organizations, this reality strains resources to the breaking point, making it more difficult to reduce shipping costs. In fact, shippers are often disappointed to discover the savings they’ve realized from supply chain advancements over the last five years will be short lived, and their order fulfillment operations are now woefully outdated when compared to behemoths such as Amazon, Wal-Mart, and Logistyx customer Bleckmann.
The good news, however, is that a Transportation Management System (TMS) for parcel shipping can change this narrative, empowering shippers to reduce fulfillment costs, provide optimal service, and streamline the customer experience to gain a competitive advantage.
A TMS for Parcel Shipping Creates a Competitive Advantage
Features in a TMS for parcel shipping, such as automated carrier service selection, Control Tower delivery alerts, carrier invoice auditing, and Business Intelligence tools, help shippers gain a competitive foothold.
For one thing, a TMS for parcel shipping enables shippers to leverage a single system to manage multiple carrier contracts, comply with label and documentation requirements for each, and see the long-term impact of various carrier service rates – streamlining order fulfillment ops and setting each parcel up for cost-effective, on-time delivery before it leaves the warehouse.
In addition, a Control Tower will provide full visibility into customer deliveries, including a complete picture of what’s happening with each shipment, 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.
A TMS for parcel shipping with automated freight audit tools will also eliminate manual labor and expedite carrier payments. The system will automatically compare carrier invoices against expected transportation costs and identify discrepancies, so finance and management teams can easily measure actual transportation costs against budget and report on spend according to geography, business unit, accruals, and GL Coding, to name a few.
And Business Intelligence tools enable shippers to leverage their shipping data to evaluate carrier performance, uncover missed savings, and identify opportunities to deploy different multi-carrier parcel delivery strategies that yield greater returns. This data in turn informs carrier contract negotiations and increases the optimization of operations so that shippers can meet customer expectations for on time delivery without incurring additional extraordinary costs.
Finally, another huge aspect to gaining a competitive advantage is that a TMS for parcel shipping positions shippers for successful omnichannel capabilities, at a time when characteristics like ship and return-to-store are growing in customer importance. Case in point: in the 2018 UPS Pulse of the Online Shopper, 50% of U.S. customers surveyed reported shipping to store for pickup, and 52% expressed interest in shipping items to an alternate delivery location with reduced fees.
A TMS for parcel shipping enhances omnichannel distribution by providing shippers with an easy, cost efficient way to move inventory across a distributed network so products reach customers where they want – and quickly. And by catering to buyer preferences via competitive shipping options, a company can shine.
Tips for Optimizing a TMS for Parcel Shipping
To use a TMS for parcel shipping to continuously maximize operational efficiency and exploit a competitive advantage, shippers should follow these tips:
- Get a TMS for parcel shipping “upgrade.” Shippers that currently have a TMS for parcel shipping in place, but functionality is limited to domestic carrier selection and label production, should “go beyond the label” and consider an upgrade. Implementing a TMS for parcel shipping that provides access to a global carrier services network, for example, or that has the capability to harness real-time shipping data and perform analytics to help evaluate carrier performance, uncover savings opportunities, and inform carrier contract negotiations, will help shippers reach digital maturity and exponentially decrease transportation spend in the long term.
- Connect assets and systems. Connecting business-critical systems such as an ERP, WMS, and/or OMS to a TMS for parcel shipping will eliminate data silos – enhancing the validity and speed of the end-to-end supply chain.
- Get all supply chain entities to use the same system. Getting all distribution centers, all retail locations, and/or all brands in the brand portfolio on the same technology platform will streamline reporting and improve efficiency throughout the distribution network.
- Eliminate errors with robust training. Providing proper, cross-functional training on the TMS for parcel shipping and all complementary technology will eliminate the risk of human error and reduce employees’ resistance to change.
- Choose a SaaS-based TMS for parcel shipping. A SaaS-based infrastructure will offer increased flexibility and improved data safety over typical on-premise installations of shipping software.
Leverage the Full Power of an Advanced, Easy-to-Deploy TMS for Parcel Shipping Today
When you consider that according to Gartner, by 2020, same-day delivery will drive up logistics costs as a percentage of revenue by 50%, having a TMS for parcel shipping is no longer a “nice-to-have,” it’s a true necessity for shippers looking to gain a competitive advantage. To learn how to choose the right TMS for parcel solution to meet your business needs, download this checklist.