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Use Business Intelligence to Rethink your Parcel Shipping Strategy

The truth is parcel shipping is complex, which is why you need to optimize your transportation strategy to maximize your profits per parcel. And the best way to do this is to get business intelligence visibility. 

Is it just us, or is it starting to feel like Groundhog Day? After spending most of Q4 2020 digesting headline after headline alerting shippers and consumers worldwide of a carrier capacity shortage and consequently carrier surcharges, here we are again in Q2 2021, waking up to similar headlines.

Why all the drama? Well for one thing, we’re all shopping online. Digital Commerce 360 estimates approximately $1 of every $5 spent on retail purchases during Q1 2021 came from online orders. This surge has created an influx in parcel shipping demand, and carriers have increased rates accordingly. For shippers looking to retain their margins and even transform their shipping operations into a profit center for the business, it’s more critical than ever to optimize transportation strategies.

Improve Profits per Parcel with Business Intelligence

On the surface, parcel shipping seems easy. A shipper creates and affixes a label to a box, and carriers deliver the package to its destination. But what happens when you’re processing 300,000 orders a day out of a single distribution center? What happens when some of your packages contain hazardous goods? What happens when you’re shipping packages across borders? What happens when you’re moving inventory from a distribution center to a store, or from store to store?

And what happens when those shipments come back?

The truth is parcel shipping is complex, which is why you need to optimize your transportation strategy to maximize your profits per parcel. And the best way to do this is to get visibility into your parcel shipping data. The data will analyze your parcel shipping operations across hundreds of carrier services, dimensional weight factors, accessorial charges, shipping zones, pricing structures, and SKUs and tell you whether – and where – you’re leaving money on the table. Even better, it will provide a blueprint for how to increase savings.

Leverage BI Technology and Start Small

The good news is a multi-carrier parcel shipping system with Business Intelligence provides shippers with an easy way to aggregate, normalize, and report transportation data. This will:

  • Eliminate silos, connecting people, processes, data, and technology so teams can make decisions with context and tie parcel shipping operations to company strategy.
  • Identify inefficiencies and empower shippers to increase on-time delivery rates, shipping velocity, and order volume.
  • Demonstrate the impact of carrier capacity limitations and order demand, providing managers with the ability to pivot carriers and transportation budgets to match customer expectations.
  • Surface insights, giving leaders a source of truth and telemetry to steer, predict, and report on the business of parcel shipping with confidence.

However, the enormity of shipping data available once the technology is implemented can be overwhelming for even the most seasoned shippers. Therefore, we often recommend shippers initially focus on “high-impact-easy-change” areas.

For example, how many of your parcels are shipping via express services unnecessarily? In the age of Amazon, most shippers are offering next-day and two-day delivery, and they frequently use an express service. However, most of all ground packages are delivered in two days or less, and ground is also a guaranteed service. In our experience, the savings from a simple pivot from express to ground often yields an ROI on the Business Intelligence technology investment within the first year.

Prioritize Visibility

Make 2021 the year in which you look for more analytics and intelligence in your systems. Real-time visibility, distributed order management, and multicarrier parcel management—all connected and supportive of overall goals for lowest-cost, best-service delivery – will give you a competitive edge.

To learn how Logistyx can help you optimize parcel shipping, watch Find your True Parcel Shipping Data.