Carrier Management – Which Method of Onboarding a Carrier Is Right For Your Organization?

The ability to leverage the carriers and services they need is mission-critical to global shippers. In the QAD Precision Report we examine different methods of carrier onboarding.

When you select a transportation execution solution provider you are choosing more than a vendor to help ship your goods. Firstly, you are also selecting the look, feel, performance, reputation, flexibility and support of their solution. 

Secondly, you are also selecting their ability to provide the carriers that your organization uses to ship its goods. Furthermore, you are also deciding on their ability to offer options to scale. You may wish to expand your capabilities by adding additional carriers, services and countries of origin. 

You explore the carriers your solution provider has available, which services they offer and where. Luckily, a very good portion of the time, the provider already offers the carriers and services you need. However, there are times that the provider does not have specific carriers onboarded and ready to leverage.

This article focuses on the process of carrier onboarding. We will discuss the available options for adding new carriers, new services and new origin locations.

What is Carrier Onboarding?

“Carrier onboarding” is the process of adding a new carrier, carrier service or geography. The following information is typically required when a carrier is on boarded:

• Carrier record (establishes unique carriers in the transportation solution)

• Carrier full name

• SCAC code and/or global carrier code

• Customer internal carrier “Ship Via” code

• Account number

• Carrier services (e.g. next day, 2nd day or ground shipping)

• Tracking number generation

• Carrier rates

• Negotiated rates – your specific rates per your carrier contract

• Customer rates – rates that reflect what you charge customers (optional)

• Accessorial charges (e.g. fuel surcharges)

• Routing guide

• Geographical data that describes the area for where each service is available

• Transit times

• Typically differentiated by service level and geography served

• Certified/accredited shipping labels

• Optional, but often a requirement to ship via a carrier

• End of day manifest/carrier close out file(s) generation, reports and transmission

Options for Carrier Onboarding

There are several methods used to onboard a new carrier. Below, the three most typical methods. We also examine each of their pros and cons.

Web Service API – Application Programming Interface

With this method, the solution provider builds a connection to your carrier. This allows them to pass transactions over and receive rates directly from the carrier. The carrier maintains your rates, accessorial charges, routing guides, transit times, tracking numbers and shipping label formats on your behalf. 

The web service API can, and often is used for end of day manifesting/carrier close out file transmission. For some carriers, web service API is the only integration method available.

PROS

Quick

Web service API integrated carriers can generally be quickly onboarded. The carrier must provide support for a web service API interface. Therefore, your transportation solution provider can implement a change within their application that can use the web service API.

Ongoing Compliance

Using a web service API means the carrier is responsible for ongoing compliance. This includes:

• Rates

• Services

• Routing guides

• Transit times

• Tracking numbers 

• Accessorial charges 

• Shipping labels

Your solution provider and carrier(s) maintain the web service API. Your carrier maintains their systems for your usage.

CONS

Response Times

Your transportation execution provider can optimize your solution for high speed processing. However, you do not have any control of how quickly the carrier’s system responds to the web service API call.

Speed of Processing

Leveraging web service API calls for carriers may not satisfy your response time requirements. As a result, you may not achieve the speed you need in a busy shipping environment.

Reliability of Processing

Although infrequent, carrier systems do go down or become unresponsive. Issues such as a network problem, outage or maintenance could severely impact your ability to ship. 

System Integrated

With this method, your provider builds and maintains carrier compliance. Once again, this includes:

• Rates

• Services

• Routing guides

• Transit times

• Tracking numbers 

• Accessorial charges 

• Shipping labels

Alternatively, you can license or subscribe to this data for usage in your system. 

Your transportation management solution provider may create or modify system programs and end of day/carrier close out manifest process. 

This approach to carrier onboarding typically requires more effort from your solution provider. However, most transportation execution solution providers offer some form of easy onboarding services. These are processes to formalize onboarding with definitive and accurate time frames and cost values.

PROS

Speed of Processing

Leveraging internal system logic to read and process data from within the database is very fast and efficient. In our own benchmark studies, the results showed several tens of thousands of transactions processed per hour.

Reliability of Processing

You will need an appropriately sized and functioning cloud solution and/or hardware. You should be able to process your shipments for carriers that are not configured to use web service API calls.

CONS

Time Consuming

It takes time for your solution provider to work with you and your carrier to do this. Your provider must first acquire the data. Then the provider builds the logic in the solution, loads the data, and tests the programming. The provider must also get shipping label certification and finally, deploy the carrier to your environment.

Cost

Cost could be a downside of this approach as well. Some solution providers either charge (or cost share with) their customer for onboarding a new carrier using this method. Which means that adding multiple carriers can become expensive.

Manual Entry or File Create and Load

Your transportation execution solution likely has a utility that allows you to enter carrier data manually. This includes rates, accessorial charges, services, routing guide and transit times. Most solutions allow you to create comma separated value (CSV) files or spreadsheets. This information is then loaded into your system.

PROS

Inexpensive

This process can be the least expensive of the options available to a customer. If onboarding a small carrier it could take just a few minutes or hours to accomplish manual entry. Small carriers may have very simple data. This makes it easy to capture rates, accessorial charges, services, routing guide and transit times.

Speed of Processing

The data would process with the same speed and reliability as the system-integrated method.

CONS

Time Consuming

This oftentimes is the most time consuming and expensive option available. It could take weeks, even months to enter all of a large carrier’s data into your system. 

Large carriers often have a complex rate structure, multiple complex accessorial charges, numerous services, with routing guides and transit times. 

Complex Updating

Updates to the data for a complex carrier could be as much of a nightmare as entering the data. You would also need to spend significant time testing the data for accuracy.

The “Right” Approach

Some carriers provide options to obtain their data either via web service API or system integrated. Weighing the pros and cons above, should help you choose the right option for you.  

For high volume shippers onboarding a mission critical carrier, a web service API may not be the best choice. Remember, it will be slower to process than the other options discussed above. 

If you are a low volume shipper, choosing a carrier web service API approach might be the best option for you. However, this means you need to accept the processing speed and reliability concerns. Ideally, you want a transportation execution solution provider that supports all three types of carrier onboarding we discussed because:

• Some carriers only provide web service API access.

• Other carriers provide either web service API access or system integrated data. Therefore, you should base your decision on processing speed and reliability factors.

• Some carriers are small and are not complex. Manual entry or file create and load would be an option here.

Recommendation

The QAD Precision solution provides access to an industry-leading global parcel carrier network. Our customers continue to move into new geographies. Furthermore, carriers continue to introduce new services and origins. As a result, our network continues to expand through our Carrier Onboarding Program. 

The vast majority of parcel carriers have specific requirements. Carriers stringently insist that providers meet these requirements to integrate their technology. Furthermore, customers must complete each carrier’s accreditation process before they can start shipping.

Our approach is to ensure that there is agreement between all parties: the carrier, the customer and the solution. This may seem straightforward. However, due to the myriad of carrier services offered across origin countries, this is not always the case. Our framework ensures that this information is clearly defined and agreed upon up front.

Our dedicated team of solutions consultants have decades of experience. We can help you examine your current processes, and leverage industry best practices. We will then provide a roadmap to help you achieve your objectives in a timely, cost efficient and comprehensive manner. 

LET'S KEEP IN TOUCH

If you would like to subscribe to the QAD Precision Report, or would like to receive notifications about QAD Precision events, webinars and news, please click here.

Further Reading 

3 MINUTE EXPLAINER: WHAT IS MULTI CARRIER SHIPPING SOFTWARE?

HOW MULTI CARRIER SHIPPING SOFTWARE BENEFITS GLOBAL MANUFACTURERS

THE BENEFITS OF INTEGRATING COMPLIANCE AND MULTI CARRIER SHIPPING SOLUTIONS