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Is Your Parcel Shipping Strategy Working? 5 Questions to Ask

The beginning of the year is a good time to take a critical look at your parcel shipping strategy. How well did it perform in 2018? Will it serve your organization’s needs this year? In the latest Precision Report we look at 5 crucial questions to consider.

Here’s an interesting figure: 13 percent of shippers use manual processes for their transportation activities. That was one of the findings of the Supply Chain Technology Innovation Benchmark Study conducted by American Shipper and published in December 2018. American Shipper surveyed nearly 300 beneficial cargo owners, carriers, third-party logistics providers, freight forwarders and supply chain stakeholders. The study also found that just 34 percent of respondents use transportation management systems (TMS). Furthermore, only 12 percent use global trade management (GTM) solutions.

As American Shipper notes, the industry is often seen as slow to adapt to change. Technologies such as blockchain and the Internet of Things (IoT) received much attention over the course of 2018. But for every article extolling the transformative powers of these innovations, there was another claiming that this was simply hype and hot air. Granted, it makes sense to wait and see which technologies offer the best ROI. Getting it wrong can be an expensive mistake.

Increasing Parcel Volumes

Another challenge facing shippers is the increase in parcel shipping volumes. E-commerce has made smaller, more frequent parcel shipments a reality for many industries. Even shippers with a TMS may struggle — traditional TMS systems were designed for freight, not parcel shipping.

What’s more, the 2018 Pitney Bowes Parcel Shipping Index found that growth in global parcel volumes is far outpacing revenue growth. The study looked at parcel shipping in 13 countries. These were Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Norway, Sweden, United Kingdom and the United States. It found that parcel volumes in these countries was up 17 percent year-on-year in 2017. However, revenue rose 11 percent over the same period. It also forecasts that global parcel volumes will increase 25 percent to surpass 100 billion parcels by 2020 in aggregate across the countries studied.

The beginning of the year is a good time to take a critical look at your parcel shipping strategy. How well did it perform in 2018 — especially over peak season? More importantly, will your current strategy serve your organization’s needs this year? Or is it time to consider some changes? Here are 5 questions to consider:

ARE YOU CONTROLLING PARCEL SHIPPING SPEND?

Does your current transportation execution strategy allow you to accurately determine what your organization is paying to ship parcels? Are you sure you are getting the correct service level at the best price?

Can your organization easily identify discrepancies between your estimate and your carrier’s month-end invoice? Sometimes your estimates are under or over that of your carrier. Other times, your carrier may bill you for a service level you requested but did not receive, such as priority overnight. Does your organization have a simple, affordable way to identify those mistakes and recover funds for excess shipping charges?

DO YOU NEED A MULTI CARRIER STRATEGY?

Parcel shippers were once able to get away with having a partnership with a single carrier. For many organizations, this was preferable. It allowed companies to negotiate favorable rates and standardize shipping across all locations. These days, a single carrier strategy is a risk. Carriers, like other businesses, are not static. The services, lanes and prices they offer are subject to change. Leveraging multiple carriers offers businesses an advantage, providing more shipping options and competitive rates. With multi carrier shipping software, organizations can gain the benefit of choice while maintaining enterprise-wide shipping procedures.

DO YOU HAVE HAPPY RETURNS?

How well is your returns process working? For retailers, and anyone who ships to consumers, returns are inevitable. Despite that, many organizations do not have a reverse shipping strategy to ensure their goods come back efficiently and cost-effectively. Furthermore, around two-thirds of customers check the returns policy before making a purchase. Your returns process needs to meet their expectations, whether you ship domestically or globally.

ARE YOU PLANNING FOR THE FUTURE?

Is your current transportation strategy based on domestic shipping only? Can it support your organization’s needs going forward? While there has been something of a slowdown in trade volumes, cross-border parcel shipping is growing, particularly for consumer goods. Manually processing international shipping paperwork is time-consuming and inefficient.

ARE YOU USING CONSOLIDATIONS?

Let’s say you have five shipments headed to New Jersey. 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?

Some carriers will do consolidations on your behalf. Alternatively, shippers can implement consolidations themselves with their choice of carriers for the first leg and final mile. This offers more flexibility. Shippers can choose local carriers in different countries and regions that have the best networks to serve their customers. 

About Precision Software – Trusted Global Trade and Transportation Execution

Precision Software, a division of QAD Inc., provides industry-leading global trade management, transportation execution and multi carrier shipping software solutions from a single, integrated platform. Preeminent industry leaders in every region of the world rely on Precision’s global support centers to leverage thousands of carriers and manage millions of shipping transactions every day. Our open architecture easily integrates with Enterprise Resource Planning, Warehouse Management Systems and legacy solutions. An ISO-certified company, Precision Software assists companies to minimize shipping costs, optimize first mile and last mile deliveries, automate free trade agreement compliance, avoid customs delays and mitigate the risks associated with dynamic trading environments to maximize their competitive advantage. Precision Software’s customers span multiple industries including banking and finance, life sciences, high technology, retail, industrial, automotive, higher education and public sector as well as logistics providers. For more information about Precision Software, visit www.precisionsoftware.com.

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