As a new year begins, now is the time to take a hard look at whether your organization’s TMS strategy and performance served you well in 2017, especially during peak shipping season. Will your current carrier strategy serve you well in 2018? Or is it time to consider some changes?
The beginning of a new year is a great time to ask questions like these. Strategic planning is several months away for most organizations, but there are lessons to be learned today. Don’t let peak shipping season recede into memory without taking the opportunity to identify what your organization learned, and make a New Year’s Resolution to apply those lessons in the year ahead.
Did You Pass the Peak Shipping Season Stress Test?
Peak shipping season is peak stress season for any organization that needs to ship products to customers, regardless of industry. Whether you’re in retail or just after closing out your Fiscal Year End the crush of holiday/end of year package shipping severely impacts shipping at the carrier level, causing delivery delays and often leading to additional freight and shipping costs.
The growth of e-commerce and mobile commerce has made shipping such an integral part of so many industries that shipping volumes are increasing faster than carriers’ abilities to handle them, particularly during the holidays. And while the final count for 2017 holiday shipping is still being tallied, it’s likely that 2017 was another record-breaking year. UPS estimated that it would handle a total of 750 million packages during the 2017 holiday season, or about 30 million a day for the 17 days before Christmas. FedEx anticipated that it would handle 350 to 400 million packages during the holiday season; DHL also predicted a strong holiday shipping season.
The challenges of handling these volumes have led carriers to add surcharges for packages shipped during the holiday season, as well as for oversize, overweight or unauthorized packages. Yet even this doesn’t ensure that packages will be delivered on time. In the 2016 holiday season, UPS ground deliveries missed their delivery estimates 3.7 percent of the time. This doesn’t sound too bad, but it’s triple the rate of late deliveries during the rest of the year, underscoring the fact that it’s a struggle to keep up during peak season.
Carriers are not the only ones struggling. Shippers too, find it a challenge to manage shipping volumes during peak season. Handling delays are a common occurrence during the holidays, when the number of orders taken outstrips the warehouse’s ability to handle them all.
Your 2018 New Year’s Resolution for TMS and Carrier Strategy
With these things in mind, now is the time to look at your TMS and carrier strategy and determine whether what happened in 2017 worked well. If not, looking back will allow you to recognize and learn from what didn’t work while there is time to adjust course in the new year.
Some areas to consider as you make your New Year’s Resolutions for TMS and shipping in 2018 include:
- Returns processing – Did your returns process work well? In many organizations, returns and reverse shipping are not well supported by their current carrier strategy. PRECISION Multi Carrier Shipping Software allows you to reduce costs on return shipping, while increasing customer satisfaction with a simple and convenient returns process.
- Freight spending – With peak season surcharges now being applied by many of the top carriers, Q4 freight spending is going up for many organizations. Does your current TMS solution allow you to accurately determine what your organization is paying to ship your your freight? With PRECISION, you can.
- Single or Multi Carrier Strategy – Shipping delays are becoming a holiday tradition, with leading shippers reporting on-time delivery rates far lower than during other times of the year. But some carriers are more affected than others. A smart strategy to reduce stress during peak season is to reroute packages to carriers that are the least affected by the holiday rush. However, if your current TMS solution is based on a single carrier strategy, implementing this seemingly simple solution requires a lot of work on your part. Might it be time to consider a multi carrier strategy? PRECISION Multi Carrier Shipping delivers the flexibility to work with hundreds of carriers around the globe.
- Freight Bill and Audit Pay – In the holiday rush, it’s not uncommon to find discrepancies on your carrier’s month-end invoice. Sometimes your freight estimates are under or over that of your carrier. Other times, you might have been billed for a service level that you did not receive, such as when shipments arrive late. When those discrepancies are in your favor, does your organization have a simple and affordable way to identify those mistakes and recover funds for excess shipping charges? PRECISION’s Freight Bill and Audit Pay solution allows you to identify and recover the funds for each overpayment, without having to outsource the auditing process to a third party.
- Global Shipping – Global shipping is growing at 10% a year. If your current TMS strategy is based on domestic shipping only, can it support your organization’s needs going forward? Processing international shipping paperwork is time-consuming and inefficient when you have to do it by hand. With PRECISION Global Trade Management, you have access to a real-time library of international shipping documents and trade compliance workflows that can make it easier to expand your global reach.
- Consolidations – Suppose you have five shipments headed to Los Angeles. You could handle them all individually, and pay freight and shipping costs for each one. But what if you could save money by consolidating them into one shipment? With PRECISION, you can consolidate shipments by region and final destination, saving money in the process.
It’s time to begin identifying how you can improve your shipping operations during next year’s peak season. In the coming weeks and months, we’ll be bringing you more information about how to reduce your stress in 2018’s peak shipping season with solutions from PRECISION.