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When to Choose a Transportation Management System for Parcel Shipping

Every manufacturer, retailer, and 3PL has its own unique capacity for logistics tech investments. In fact, many companies still get by with phone call track-n-trace, paper carrier contracts, and Excel sheets. Whatever works, right? But according to Gartner, by 2020, same-day delivery will drive up logistics costs as a percentage of revenue by 50%, which means we think an investment that solves the many pain points of shipping (and has an impressive ROI) is worth making. And modern technology has transformed the way we can handle parcel shipping — so much so that going without it may be hurting your bottom line. So, how do you know when you’re ready to implement a transportation management system for parcel shipping?

Know What You Want to Accomplish

First, it’s vital to explore exactly what you need your transportation management system (TMS) for parcel shipping to do. Are you struggling to understand various carrier contracts and quickly onboard new ones? Are you looking to find the best rates for fluctuating shipping volumes and lanes? Are you missing your delivery commitments to your customers, and if so, how is the problem impacting the bottom line? Start by calculating how much money you’re losing by not using a smart, streamlined, and accurate parcel shipping management platform.

While a TMS for parcel shipping ultimately allows you to save money, time, and labor in shipping, it can also solve many issues within fulfillment ops, procurement, finance, and customer service. Discover everything you can accomplish with new TMS for parcel shipping technology:

  • Manage carrier contracts, comply with label and documentation requirements, and see the long-term impact of various carrier service rates – while also increasing your capacity to identify new carrier services and on-board them more quickly.
  • Centralize all parcel shipping data (i.e., shipment volumes, cost variables, delivery events) in a single, accessible platform and integrate it with other enterprise systems.
  • Get real-time updates on all shipping and delivery details.
  • Run data analytics and generate reports for better decision making.
  • Achieve higher on-time delivery rates, be proactive about customer delivery updates, and automate the returns process.

If your current logistics environment is struggling with budgeting, data management, and on-time delivery tracking, to name a few, it may be time to invest in TMS for parcel shipping technology.

Video: The Critical Capabilities of a TMS for Parcel Shipping

Define the Scope of your Transportation Management System for Parcel Shipping

Ensure the success of your investment by digging into the details. To truly understand whether a TMS for parcel shipping is worthwhile, it’s crucial to identify which features of the system will be meaningful for your specific business needs. Answer the following questions before taking the leap.

Which carrier services am I using? Whether it’s UPS Ground or FedEx Priority Overnight, the label requirements change with each carrier service you use, and the more carrier services you utilize, the more you should consider adopting a TMS for parcel shipping. Keep in mind, different TMS for parcel shipping systems may integrate with specific carrier services, so confirm you’re investing in one that caters to your company’s specific needs.

Do I have the capacity to handle my current parcel shipping volumes? Same-day and next-day delivery expectations, combined with increasing parcel volumes, may be the pivotal factors that push you toward a TMS for parcel shipping investment. And if you’re not feeling the pinch now, consider that with healthy growth, your business could reach capacity. Don’t hesitate to think in the long-term here. Make sure your TMS for parcel shipping selection can handle not only your current needs, but also be capable of taking on more.

How is my procurement and carrier service selection process? If you’re drowning in carrier contracts, lack proper insight into your contract history, or struggle with rate simulation and budgeting, then a TMS for parcel shipping can be a life-changing tool for your business. As long as the TMS for parcel shipping of your choosing specializes in procurement ops, you’ll be on the right track.

In the past, TMS for parcel shipping technology was often difficult to integrate, required an on-premise installation, lacked cross-border functionality, and cost a fortune to operate. Luckily, the past decade has been monumental for the technology. Companies are now seeing almost immediate ROIs when implementing a TMS for parcel shipping while simultaneously expanding their geographic footprints, implementing omni-channel distribution, and even innovating with 3D print-and-ship strategies. Because, let’s face it: parcel shipping can’t just be about delivering parcels. It also has to be about delivering bottom line performance.