Shippers face an uphill battle against Amazon and the big box retailers. These giants have deep pockets, capable of offering low-cost, if not free, parcel shipping. However, that does not mean all shippers must face the challenges to ship parcel at their expense. Rather than giving up, shippers need to consider what Amazon and the big box giants have done right and apply these concepts as part of a robust parcel shipping strategy.
The Issue: Amazon Is Forcing Shippers to Re-Evaluate How They Ship Parcel
Amazon’s ability to offer free two-day, next-day or same-day delivery makes it difficult for traditional shippers to maintain a competitive advantage. If shippers charge to ship parcel, customers will simply go to Amazon. Unfortunately, the volume of small packages shipped, as well as the variety of carriers used, can make keeping costs in check sound like a dream, inaccessible.
The Solution: A Robust Parcel Shipping Program Can Keep Costs in Check
Developing a robust parcel shipping strategy requires shippers go back to basics, such as the needs of customers. Customers want to pay as little as possible for shipping, and they want their packages delivered yesterday. As noted in a previous blog post, up to 37 percent of shippers are experiencing the growing pains of trying to get more packages to customers faster. However, tracking and tracing packages, as well as streamlining the packaging, labeling, and shipping processes, is key. Instead of focusing on charging more to ship parcel, shippers should redevelop their processes to streamline shipping and reduce delays, as well as freight spend. This has the effect of lowering overall shipping costs, meeting customers’ demands for lower-cost, faster delivery of small packages.
The Reward: Ship Parcel Best Practices Enhance Competitive Advantage
- Understand Your Shipping Data. Shipping data includes verifying invoices for accuracy and recapturing overpayments. Most shippers overpay carriers up to 3 percent, but instead of trying to manage the process, look for the low-hanging fruit. In other words, recapture overpayment on easy-to-identify issues, like late shipments, which account for up to 80 percent of recovery potential, says Jared Fisher via Parcel.
- Negotiate Shipping Rates Like a Pro. Accepting public carrier rates is a great way to spend way more than necessary. Those needing to ship parcel in volume should negotiate shipping rates with all applicable carriers, including local and regional carriers, reports David Butcher of ThomasNet. This may include working with a third-party logistics provider (3PL) to secure the best rates, especially if you are already locked into an existing carrier contract.
- Purchase Insurance. Things go wrong, but freight or cargo insurance, often reserved for less-than-truckload and full truckload shipments, is available for parcels as well. Before shipping anything, consider the value-add of purchasing insurance. This is especially true for shippers sending high-value items or working with multiple business-to-business customers.
- Know the Docking Restrictions for the Origin and Destination of All Parcels. Being a parcel does not exclude a package from the restrictions of individual loading and unloading docks. Document the restrictions for all destinations and origins, and review this list before scheduling a shipment pick-up or drop-off.
- Consider Event-Specific Labeling Guidelines. Certain events, like trade shows and fairs, may have specific labeling guidelines and requirements for all incoming freight. Failure to adhere to these rules may result in the refusal of packages at the destination, resulting in lost costs to shippers.
- Prepare and Retain Customs Documentation for Items Moving Across International Borders. According to a Meeting Professionals International guide, shippers should consider working with a freight forwarder or customers broker, services that a 3PL may provide, to reduce hold time and inspections for international shipments.
- Use International Symbols for Labels. International parcel shipping opens the door to problems with language barriers, so shippers should use international symbols for all labels, such as hazardous material or fragile symbols, as well as including a bilingual shipping label, if required by the destination, reports the Balance.
- Offer Reasonable Parcel Rates to Customers. As explained by Brad Hollister of Clear View Audit,
- Consider Zone-Skipping Strategies. Getting products to customers faster can be enhanced through zone-skipping strategies, effectively moving product faster by circumventing delays in entire zones.
- Remember to Use LTL, FT and Freight Consolidation to Manage Costs Proactively. Freight consolidation, combining many parcels into a larger shipment, can be key to using zone-skipping and keeping costs in check.
- Partner with a 3PL. Shippers are focused on moving more product, not getting bogged down in shipping details and data. However, details and data are key to staying competitive, so shippers should partner with a 3PL to manage parcel shipments, as well LTL and FT shipping, to drive savings even further.
Know How to Ship Parcel Like a Pro by Implementing These Best Practices Today.
Amazon is not going to stop marching toward domination over LTL, FT, and Parcel shipping. Shippers must act now to safeguard their companies against the current and future might of Amazon. Know the threat of no-cost, fast shipping, offered by the big guys, and implement these best practices now.