3 Minute Explainer: Multi Carrier Shipping Software and 3PLs

The way we shop has been revolutionized by e-commerce. In this 3 Minute Explainer, we look at how multi carrier shipping software benefits logistics service providers.

Shopping has changed — and with it, so has logistics. The global pandemic resulted in skyrocketing online orders. While this was an unprecedented event, online shopping has been exponentially growing every year. 

Last year, retail shoppers spent over $4 trillion online. Forecasts suggest that by 2022, more than $5 trillion will be spent on online retail shopping.

All this activity means that third party logistics providers are shipping more small parcels to more destinations than ever before. As a result, a 3PL with systems designed to manage large orders of freight will need a way to manage parcel shipments. Here we explain the benefits of multi carrier shipping software for 3Ls

Customer Demands are Changing

Traditionally, 3PLs sent large shipments of freight to stores for distribution. As a result, they worked with a small number of trusted carriers to deliver these shipments. 

These days, 3PL customers are likely to require their logistics partners to provide both distribution to stores and to e-commerce customers. 

A retailer with a brand based on customer experience and customer satisfaction will expect their logistics providers to provide this same level of customer service to online customers. 

Relatively speaking, it is more complex and more expensive to send one hundred small parcels to one hundred different customers than it is to send one shipment of one hundred items to a single store. Therefore, 3PLs need a way to manage parcel shipping costs.

With a multi carrier shipping solution, 3PLs can leverage better carrier rates, more capacity, access different routes and increase their delivery options. 

Multi carrier shipping software allows you to easily compare carriers, shipping costs and delivery times. It is also possible to automate this process so that staff do not have to manually perform this task. Automation, used alongside a 3PL’s with business rules, ensures that the lowest cost service to meet the delivery requirements is always chosen.

Managing Different Customer Accounts with Multi Carrier Shipping Software

Large 3PLs can generally negotiate very favorable shipping rates with parcel carriers. Despite that, it is possible that some of their customers can negotiate even better rates due to their size and volume.

In such a scenario, these customers expect their logistics providers to manage inbound and outbound shipments using the customer’s carrier account to avail of the lower rate.

In order to do so, many 3PLs must manage their own carrier accounts as well as customer carrier accounts separately. With a comprehensive multi carrier parcel shipping solution, this is not necessary. A best-in-class solution will enable a 3PL to manage all carrier accounts — for both freight and parcel — from one centralized shipping platform.

Beating The Competition

Logistics is a competitive industry. Efficient logistics also significantly contributes to the bottom line. This is why a number of large e-commerce and omni-channel retailers have brought at least some of their logistics operations in-house.

If a logistics company cannot provide the service their retail customers need and expect for online orders, many will look at in-house fulfillment.

Retailers expect that their 3PL partners will be able to respond to consumer expectations. These may include a variety of delivery options, including expedited delivery, reverse logistics as well as repairs and replacements.

At the same time, logistics providers must be able to control parcel shipping costs. A multi carrier shipping solution allows 3PLs to manage carriers, ensure on-time delivery, and deliver at the lowest possible cost.  

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Further Reading

SIX WAYS MULTI CARRIER SHIPPING LOWERS PARCEL DELIVERY COSTS

THREE VALUE-ADDED SERVICES THAT HELP 3PLS ATTRACT NEW CUSTOMERS

CLOUD SOLUTIONS FOR 3PLS