Weighing in on the case for Carrier Agility
We have yet to meet a Supply Chain executive that has looked at a balance sheet and not shaken their heads in frustration at their shipping spend. Regardless of the amount of distribution centers, business rules, zip code tables, smart packing, right-sizing packaging or data crunching, it is always a shock to the bottom line. This is the point where hard questions get asked and levers start being pulled to try and affect some change.
As experts in this field, we try and find every advantage for our partners by optimizing all aspects of the order fulfillment lifecycle from the shopping cart to shipping point selection to packaging recommendations. But your Parcel TMS is only as good as the shipping network you have selected and we will outline why having multiple carriers could be the right decision for your company. Carrier agility is the ability to fulfill your customer’s orders through the use of multiple shipping methods operated by any number of carriers. Having options gives you flexibility in your decision making, elasticity to market developments, and ability to move between carriers quickly and easily.
Having multiple carriers providing similar ship methods to your end customers means you have shipping options and most likely a multitude of rates to choose from. Each carrier has their strengths, whether it be geographical or ship method, to choose from when making your selection. By utilizing a robust decision engine in your Parcel TMS, you can use those real-time rates to find the lowest price. Pairing lowest price with historical delivery information and you have a powerful tool to make sure that your parcel reaches your customer to meet their expectations with the least out of your pocket. One of the most obvious examples is including a Ground shipping method in your rate shop (where applicable) to fulfil a 1-day order rather than a more expensive method.
Carriers also have many hidden fees associated with delivery not just baked into their rates. While a carrier might be a winner on rate alone, if your PTMS can’t account for accessorial charges, handling charges, commercial versus residential addresses, or dims, than you will find you are paying way more for that package on the back end than what you thought. Surprise variance bills will add up and that can cause heated conversations that can all be prevented by having all those charges up front and handled by your PTMS. Make a partner out of your PTMS and keep your rates up to date.
Leverage in Negotiations
As we mentioned before, carriers have different strengths. By using your own comparison data you can see how carriers are helping you with your business. Real data provides you with variance reporting, exception handling, and on-time delivery percentages that should be down to the zip code. Your BI team should be having a nerd field day with all the results they can show you about your business. Armed with this data you can now walk into negotiations understanding the best outcome for your business. Carriers are partners and by negotiating with them you can highlight your business needs and align it to your strengths.
Even the best plans go pear-shaped sometimes. When things truly go south it is good to have options. Whether it is ecological disaster, strikes, bankruptcy, or parting ways with a long-term partner, all these are what keeps Logistics professionals awake at night. We hope that never happens, but we have been called upon by our customers to perform miracles when it does. Luckily, we were able to work with our client’s team and the carrier to get up and running quickly, but nobody needs that level of stress in an already stressful industry. Being able to set plans in motion by flipping a switch, or at the speed of an email, is crucial to your outbound fulfillment not being interrupted. Keeping carriers active in your system means that you have this ability if all else fails. Allow your PTMS and carriers to be partners and have the understanding that contingency plans exist and can be activated.
The ability to add/delete/change carriers quickly is a must for any PTMS that you are evaluating. At ScanData we pride ourselves for our ability to make changes in hours and add carriers in days. We can’t stress enough that without this ability to change, at scale, means you will be stuck with an underperforming mix of lackluster shipping methods. If you are finding yourself waiting on your PTMS to make changes than it is time to re-evaluate your partnerships.
Delivery and the manner of delivery is now more than ever tied to customer satisfaction. In the past, if the product arrived on a customer’s doorstep, they were more than happy. But now customer wants options in carrier selection, and more visibility. If their package arrives late, damaged, incorrect, or worse, not all not at all, the chances of them coming back for their next order are next to zero. By absorbing the carrier tracking status updates into your PTMS and creating actionable status updates you can communicate internally and with your customer – in whatever manner you choose, and with whatever frequency you desire. This could mean an alert to a customer rep for a high value package that will be arriving during the day and a phone call to that customer to expect it, or a communication to the recipient as to delivery status. Supply Chain alerts can be automated to your CRM and you can go from reactive to proactive in moving your customers from just one-time shoppers to raving fans.
LTL And Full Truck loads might have marketplaces where you can get companies to bid for your business (or a broker can do this for you), but in parcel you need to do it yourself. Small incremental savings add up in a big way and leveraging multiple carriers with many shipping methods your can find the right mix of efficiencies to provide the customer service to your end customers and the right number on your balance sheet that keeps product moving out the door.
We realize this piece is very high-level, and if you’d like to drill down on any of our recommendations, reach out to us with questions or comments. We also welcome opportunities to deliberate or dispute our insights and recommendations. No conversation is off limits.
You are an expert and we'd love to speak with you.
Get in touch
Whatever your shipping logistics needs may be, chances are we have a solution for you.
- Address: 9701 Brodie Lane, Bldg. 104. Austin, TX 78748
- Phone: (512) 358-1585 x300
- Email: email@example.com