Assume you have a relatively low average of overbilling instances in your shipping invoices, 1 percent. If your company’s freight spend is $1 million, that 1 percent amounts to lost opportunities of $10,000. Now, imagine the savings if 1 percent of your parcel shipments, which make up 75 percent of total freight spend, cost half as much as they do now.
The savings could be as high as $350,000 on top of the $10,000 in savings by recapturing overpayments.
The opportunities for savings in parcel freight management are clear and add up much faster than shippers may realize. This demonstrates the value of a multi-carrier parcel shipping system, but why are shippers so reluctant to embrace the next wave of technology in freight management? Let’s take a closer look at the problem, the solution, and how to pick the right freight management system for parcel shipping.
The Problem: Shippers Are Stuck in Existing Contracts With Few Parcel Carriers
Parcel shipping can be quite complex, but a multi-carrier parcel shipping system is a labyrinth of opportunities for savings and risk for great costs. As explained by Adam Lewenberg via Parcel, shippers see between 3- and 10-percent annual increases on shipping costs, and the costs of parcel shipping are soaring at an even faster pace thanks to an improved economy, consumer demand, and a rise in e-commerce.
As the world of e-commerce exploded, demand for parcel shipping has gone through the proverbial roof. Shippers are paying more, yet they continue to get fewer services at the same time. For those with existing parcel contract carriers, finding ways to save money can feel impossible. However, opportunities for savings still exist.
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The Solution: Expanded Parcel Shipping Systems Put Multi-Carrier Options in the Spotlight
Expansion of service level agreements and contract carriers are the answer to problems in using multi-carrier parcel shipping strategies. Instead of focusing on building shipping costs into product prices, shippers should consider implementing a multi-carrier parcel shipping system.
Such systems allow shippers to immediately gain end-to-end visibility of all shipments, especially those at greatest risk for instances of overbilling or incorrect freight classification. Paired with increasing focus on dimensional pricing models, accountability and visibility in parcel shipping are key to keeping freight spend in check. The rigidity of parcel shippers must evolve and take of advantage of the newest technologies, including a transportation management system (TMS), such as the Cerasis Rater, which now empowers shippers with more information for multi-carrier parcel management through the Cerasis’ partnership with Pierbridge.
The Reward: Make an Informed Decision About Your Multi-Carrier Parcel Shipping System With These Steps
Although the Cerasis Rater is clearly our gold-standard for multi-carrier parcel shipping systems, shippers should not discount their own internal processes for selecting a system. Therefore, we would like to encourage shippers to use these steps for selecting the right multi-carrier parcel shipping system for their unique operation:
- Establish a change management team for selecting the right system. Establishing a change management team provides direction for your organization’s goals. It should be made up to essential personnel in your financial, logistics, human resources, customer service, and upper-level management departments. The team handles the selection and implementation processes.
- Compare rates and delivery times within a single carrier. Start with your organization’s existing freight spend on parcel shipping. Compare the rates and delivery windows for parcel packages from the same carrier. Ask about potential volume discounts and expected increases in freight rates over the next one, two, three and five years.
- Compare rates between carriers. Using the same standards, compare the cost and delivery windows of different carriers. Since this can be an exceedingly complex process, choose your five most frequently used carriers for comparison. Step two and step 3 provide a baseline measure of your current costs.
- Compare LTL to parcel shipping. Assume you used freight consolidation to reduce parcel spend, using LTL and FT truckloads where possible. Compare the costs, and if the result indicates potential savings, it means you need a system capable of handling freight consolidation, as well as multi-carrier parcel shipping.
- Look for an off-the-shelf solution that uses data analytics to drive value. Data analytics are critical in all modern business. Analytics allow managers to discern real-world savings by identifying potential opportunities for faster production and shipping, while identifying and mitigating risks through information dissemination. The system must include data analytics. Furthermore, select a system with customizable, searchable data reports. This will reduce headaches when using information to make data-based decisions.
- Think about location-specific factors that influence your multi-carrier parcel shipping system. Location plays a big role in managing parcels proactively. As explained by Pitney Bowes, shippers should consider warehouses, stores, manufacturers, and drop shippers as part of a multi-carrier strategy. In addition, it must consider other factors, like political divides and geographic barriers, when aggregating and reviewing parcel shipping data and options.
- Remember to consider inbound multi-carrier parcel shipping scheduling. A comprehensive parcel shipping strategy and system is incomplete without a means of managing inbound freight. Look for systems that include inbound freight management tools, like inbound freight scheduling. In fact, the Cerasis Rater offers this capability too.
- Avoid rigid systems. The last step is simple: avoid rigidity in your system. In other words, do not a buy a terminal-based system. Although effective in managing multi-carrier parcel shipping, the best terminal-based systems fall by the wayside when compared to the potential of cloud-based systems. As the world moves forward in the digital age, look for systems branded “software-as-a-service” or “managed freight-as-a-service.”
Put the Power of Multi-Carrier Parcel Shipping System to Work in Your Enterprise Today
The savings of implementing a multi-carrier parcel shipping system hinge on your status of your current freight spend and the lost opportunities resulting form inefficiencies in your logistics processes. In other words, the savings amount to reducing overpayment, getting the best rates possible, and securing customer-business relationships by delivering a shipment on-time, at competitive shipping rates, and without so much as a scratch on the box. Instead of trying to manage parcel shipping manually, let a multi-carrier parcel shipping system do the “heavy lifting.”