How a TMS for Parcel Shipping Helps You Scale

Let’s face it: the work of a transportation team is never done.  New products… new markets… new distribution channels… just because it isn’t Cyber Monday doesn’t mean your order volumes aren’t increasing – as are the number of carrier services necessary to meet the delivery demands of consumers.  You know you’re spending too much time manually booking transport on disjointed shipping stations and you’ve even run the numbers on increasing staff, but the numbers paint a pretty bleak picture: if the heavens opened and dropped 1,000 people into your transportation team in an epic “hiring tsunami,” you’d still have enough work for 1,001.

Fortunately, a Transportation Management System (TMS) for parcel shipping can help you transform your global parcel shipping processes – optimizing, connecting and adapting the way your team works so you can scale your shipping volumes and your success.

What is a TMS for Parcel Shipping?

A TMS for parcel shipping simplifies complex transportation management processes by providing easy access to tools such as multi-carrier rating, Closed User Group (CUG) tendering, delivery tracking, returns, business analytics and more – all in a single solution.  It can be integrated with other solutions such as E-Commerce, Omnichannel, WMS, OMS, TMS and ERP systems, and perhaps most important: it streamlines and optimizes transportation operations across the extended enterprise to improve on time delivery in full rates while increasing revenue per shipment.  Also important to note: as both B2C and B2B organizations shift to smaller, more frequent shipments, parcel TMS systems scale accordingly to hit KPIs regardless of whether it’s Cyber Monday or a Tuesday in July.

Here are four ways you can specifically benefit from the technology:

#1: Automate Carrier Selection for Smart Parcel Shipping. The right TMS will be your one-stop shop for an instant connection to a global, multi-carrier services network (not to brag, but our own network is 8,500 carrier services strong) – giving you the most comprehensive rate shopping power available and providing you with the optimal transportation formula for each parcel that leaves your warehouse.  Shipments are automatically booked with “best fit” carriers according to your specific business rules – reducing the number of stations on your warehouse floor and allowing volumes to scale without additional resources.

#2: Eliminate delivery issues. Like it or not, your consumers’ delivery experience is as important as their experience on your website.  It impacts their perception of your brand and their willingness to buy from you again.  To build credibility and trust, you need to avoid delivery errors and keep your customers informed when the unexpected happens.  But when shipping volumes increase, it can be difficult to deliver this kind of customer service.

Manufacturers and retailers who have implemented a TMS for parcel shipping benefit from Control Tower functionality, which means they can provide shoppers with the transparency they value.  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.

Customers can even track and trace shipments on your company website without the need to visit carrier sites, reducing inbound calls about shipment status to customer service and increasing the customers’ browsing behavior on your site – which (fingers crossed!) could lead to additional purchases.

#3: Automate carrier invoice reconciliation. In our experience, invoice error rates for some shippers can be in the double digits depending on carrier contract complexity.  These errors usually occur in the form of overcharges and accessorial fees such as residential surcharges, fuel surcharges and bad address penalties.

The bad news is that when your shipping volumes are increasing, your billing process (and your financial staff) become taxed, which means it’s difficult to reconcile your invoices accurately.  Detecting overcharges or errors in accessorial fees is time-consuming, and as a result they often go overlooked.

The good news is that by using sophisticated TMS for parcel shipping technology as their guide, shippers can navigate through the complex and crowded field of service charges and added fees, and ultimately achieve cost savings.  With the right tools in hand, companies can create blended carrier strategies that ensure each parcel they ship gets automatically matched to the ideal carrier service and sent into motion according to company-defined business rules based on preferences, costs savings, desired service levels and other factors.

#4: Measure transportation performance. In order to scale, transportation teams need to know what’s working, what can be improved and what they should stop doing across each stage of the end-to-end shipping process. In other words, they need Business Intelligence. Without it, they’re operating in a silo and decision making becomes flawed.  When data is interconnected from tendering… to parcel shipping execution… to carrier invoice payment, and then synchronized for reporting, you simplify the complexity of informed decision-making.  Examples include:

  • Making smart carrier routing decisions that have little effect on actual predicted delivery, such as downgrading from air to ground or avoiding premium delivery options when a ‘regular’ day/time option will suffice.
  • Implementing cross-border shipment consolidation to reduce cross-border processing fees, brokerage fees and additional insurance fees.
  • Visualizing the impact of changes in carrier contracts and rates.

The End Result

The manufacturing and retail industries are on the verge of a revolution, in which products are sold through new distribution channels and consumers are forever searching for the absolute in distribution transparency.  With the right TMS for parcel shipping solution in place, you can easily scale to meet these requirements and create a tough-to-beat leadership position.

To learn more about the significant challenges and substantial opportunities in omnichannel parcel shipping, download this E-book: Omnichannel Merchants Shift Closer to the Consumer.