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The Transformation Underway in Parcel Shipping

According to a recent report by Accenture, the parcel shipping industry is projected to grow 9% annually to more than $343 billion globally by 2020. Not surprisingly, Accenture’s research shows that as a result of these projections, firms around the world are scaling up to meet future consumer demand – expanding capacity and modernizing networks.In the wake of these findings, Ken Fleming, President and CSO of Logistyx Technologies, was interviewed by Bob Bowman of SupplyChainBrain on how parcel shipping is changing and what the future may hold for shippers and consumers alike. As Ken explains, “the very definition of ‘what is a parcel’ is changing.” Digitally connected buyers, looking for lower prices, greater convenience and a seamless experience when purchasing, receiving and returning products, are forcing manufacturers, retailers and 3PLs to rethink traditional parcel delivery. 

A New Parcel Shipping Strategy Begins with Technology

Ken suggests that thoughtful companies are implementing new technologies to focus on this shift and lay the foundation for a global parcel shipping strategy. They understand their traditional carrier networks are no longer enough to satisfy same-day/next-day e-commerce fulfillment worldwide, and therefore they’re leveraging technology to quickly expand their carrier network to include regional last-mile carrier services as well as up-and-coming couriers such as Uber. The right technology will also allow these companies to manage and optimize these myriad services, increasing revenue per shipment and meeting consumer delivery expectations each time a parcel leaves the warehouse. Ken also highlights that many manufacturers are now deploying a “3D print and ship” strategy to manage rising inventory and shipping costs. As these savvy manufacturers are finding, the combination of 3D printing and sophisticated parcel shipping management packs a powerful one-two punch that’s enabling them to:

  • Significantly reduce their inventory and production costs
  • Slash their shipping expenses
  • Accelerate delivery times
  • Provide a faster and on-demand customer experience
  • Say farewell to third-party resellers, long-distance carriers and other middlemen in their supply chains

Carriers Don White Gloves

Also on the horizon: In an effort to differentiate the delivery experience for consumers seeking personalization and customization, Ken cites that many shippers are now offering (and carriers are providing) “white glove” delivery service. For example, a consumer orders a bike online, and not only is the bike delivered the same day or next day, but the carrier assembles the bike and disposes of the packaging. States Ken, “I don’t know that I’d say customers are ‘willing’ to pay for this extra white glove service, I’d say that more often than not, they don’t know they’re paying. It’s an embedded fee in the cost of the product.”

Video: The Critical Capabilities of a TMS for Parcel Shipping | Length: 46 sec

Focus on the End User

Accenture reports 80% of retailers see a positive and measurable impact on customer satisfaction by offering multiple delivery options to shoppers. Whether there’s a consumer or a business on the end of the purchase, Ken recommends its important to recognize the buyer now has many more choices and options for delivery services. Successful companies will focus on their end users and leverage technology to deliver on the buyer’s wish for better last mile service that keeps them in control of when, where and how their products are delivered. Watch the full interview.