Organizations tend to follow a predictable trajectory as their shipping needs grow. When organizations have few packages to ship, they often deploy an ad hoc shipping strategy. Individuals who are responsible for sending packages may simply research rates online or request a spot quote. Then they select the carrier and delivery service option they or their customers prefer.
As an organization’s shipping needs grow, these ad hoc processes become excessively time-consuming and costly. A better strategy is needed to make shipping processes more uniform and cost-effective. Often, this takes the form of selecting a single carrier strategy. The organization negotiates rates and contracts with a single carrier to handle all of its inbound and outbound shipping, streamlining decision-making and bringing order to the organization’s shipping processes.
Yet, in spite of these benefits, a single carrier may still not be the most effective strategy for handling your shipping as volumes grow. In fact, a multi carrier shipping strategy offers several advantages over a single carrier strategy. In this post, we’ll talk about five of those benefits
Five Benefits of Using Multiple Carriers
When an organization opts for a multi carrier shipping strategy, there are several benefits to be gained. These include:
Ability to Compare Rates, Routes and Delivery Options – When your organization selects a single carrier, typically this decision is made to lower costs and reduce the time required to research rates and process each shipment. However, not all carriers handle every type of shipment equally well. For instance, DHL might service one country or region better than UPS or FedEx, while the opposite may be true elsewhere.
If your organization is using a multi carrier shipping strategy, you have more flexibility to find the carrier that can provide the best service for each shipment. You can consider not just the big three global carriers, but also “local heroes” that service the destination for each shipment. You can even look at 3PL, freight carriers and alternate modes of transportation.
Of course, researching every rate, route and delivery option for each shipment is no easy feat without access to tools to simplify the process and an extensive carrier network from which to choose. PRECISION Multi Carrier Shipping Software automates the comparison process and delivers access to a global network of more than 200 carriers.
Risk Mitigation – There’s a reason people advise against putting all your eggs in one basket. And that advice never rang more true than when it comes to your shipping operations. Shipping is subject to significant risk: carriers can change their service levels or eliminate service to some regions altogether. More commonly, problems may develop with shipments getting lost in transit or delayed due to inclement weather.
When you use only one carrier, you’re more at risk when any of these problems arise. If the single carrier you depend on exits a market where you’re doing business, you’ll be left scrambling to move those packages. If weather delays movement of your shipments through a major carrier hub, you’ll have fewer options to reroute them if you’re limited to what one carrier can provide.
With PRECISION Multi Carrier Shipping Software, you can mitigate these risks by selecting the carrier that best meets your needs for every shipment. When snowstorms stop the movement of a carrier’s shipments through its hub in Cincinnati or Paris, you can quickly reroute them to another carrier’s hub in Cleveland or Amsterdam, and get them on their way.
Greater Negotiating Power – One of the biggest problems with a single carrier strategy is that you’re somewhat at the mercy of that carrier once you’ve signed an exclusive agreement. Leaving them for another carrier is time-consuming, since it’s necessary to research and negotiate rates with the new carrier, sign new agreements, build integrations to that carrier, and so on. This process is time-consuming and can often take several months.
Because of these challenges, carriers and shippers in an exclusive relationship may become somewhat relaxed about their relationship with each other. As long as parcel service is generally meeting expectations, shippers may not be keeping abreast of services that are offered by other carriers. Carriers may also not offer existing customers their most competitive service options or rates, especially if the customer seems satisfied with what they’re getting.
With a multiple carrier strategy enabled by PRECISION Multi Carrier Shipping Software, shipping organizations gain negotiating power. You’re constantly informed of the best rates, routes and service levels available from hundreds of carriers around the globe. Carriers also know they need to earn your business on every shipment. This allows you to negotiate lower rates and drive down shipping and freight costs, increasing profitability and margins.
Ability to Accommodate Customer Requests – Customers themselves may have preferences about which carrier you should use. B2B customers, for instance, may prefer that you ship packages or freight to them on their account, particularly if they’re locked into a contract with a carrier that specifies that both inbound and outbound shipments must travel by that carrier. Consumers also may wish to take advantage of special carrier services such as carrier drop-boxes or pick-up/drop-off (PUDO) options.
When you’re locked into a contract with a single carrier, you’re unable to satisfy these kinds of requests without creating problems. Your preferred carrier may even penalize you with higher rates or loss of favored shipper status.
On the consumer side, cost and service options are a crucial aspect of the purchase decision. According to a 2016 study by 3PL firm Dotcom Distribution, 87 percent of online shoppers identified shipping as a key factor in their decision to repeat shop with an e-commerce brand. In another recent study, 86 percent of online shoppers gave shipping cost as a reason for cart abandonment—a perennial problem for omnichannel retailers. A multi carrier shipping strategy enabled by PRECISION Multi Carrier Shipping Software positions your organization to meet these customers’ rising expectations around shipping.
More Flexibility on Returns – Return shipping is becoming a bigger challenge for shippers everywhere, particularly as more businesses sell goods through mobile and online channels. Online sales, unfortunately, are subject to significantly higher rates of returns than goods sold in brick-and-mortar stores—three times higher, in fact.
The higher volumes of returns associated with omnichannel selling creates a business challenge for many shippers that are committed to a single carrier strategy. That’s because while some carriers may excel at shipping outbound parcels, they are less adept at managing reverse logistics. Shippers that do handle forward and reverse logistics well, may not offer the most competitive rates.
Organizations that want the best rates and service for both their outbound and reverse shipping may find that it takes more than one carrier to get the job done—making multi carrier the better strategy for handling all aspects of their shipping business.
A multi carrier strategy offers shippers greater flexibility to reduce risk and cost, adjust to meet the needs of each customer and shipment, and shop for better rates, faster routes and more service options for all shipments. PRECISION Multi Carrier Shipping Software helps your organization derive these benefits, while streamlining and simplifying your shipping processes.