An organization with growing parcel volumes should not rely on a
single carrier. In this QAD Precision Report we look at five
benefits of using a multi carrier parcel shipping solution.
Enterprises often follow a similar pattern as their small parcel
shipping needs grow. When they ship fewer packages, many use an ad hoc
approach. This means that they manually compare carriers, and select a
delivery service as needed.
Once an organization’s parcel shipping needs grow, this approach is
no longer practical. It is time-consuming and expensive to research
and select a service for each parcel.
At this stage, most organizations choose a carrier and negotiate
rates for all their parcel shipping needs. This makes sense as it
simplifies decision-making and standardizes parcel shipping on a
carrier-provided shipping platform.
However, if parcel volumes continue to grow, this single-carrier
strategy becomes less tenable. For high volume parcel shippers, a multi
carrier shipping solution becomes increasingly necessary.
There are five major benefits of multi carrier shipping software:
Greater negotiating power
Better customer service
Let’s look at each of these in-depth.
Most organizations choose a single carrier with the aim of reducing
parcel shipping costs. This allows an organization to negotiate volume
discounts. However, carriers do not typically inform their customers
when a lower cost service is available to meet the delivery deadline.
An organization using multiple carriers has more flexibility. It can
choose the best service and price for each parcel shipment.
Furthermore, multi carrier shipping software with automated routing
means that each and every parcel is sent at the lowest cost service.
In late 2020, carrier capacity was stretched to maximum due to the
combination of peak shipping season and the coronavirus pandemic.
Parcel volumes skyrocketed and carriers
turned away customers. Many high volume shippers could not get
parcels delivered in a timely manner. In the US, DHL eCommerce advised
shippers to add more carriers to meet their delivery needs.
The pandemic is (hopefully) a once in a century event. However, a
single carrier strategy leaves organizations vulnerable to capacity
shortages. Furthermore, carriers can reduce or eliminate certain
services or decide to no longer serve particular regions. Companies
using a multi carrier shipping solution have more capacity options,
and they eliminate these risks.
Carriers and shippers in an exclusive relationship can be lax with
Companies rarely offer their best prices to existing customers.
That’s true of many organizations, not just carriers. If a customer is
generally satisfied with the service, there is no incentive to offer a discount.
Shippers rarely investigate what services different carriers offer if
they are mostly happy with the service. This is especially true since
it takes months to negotiate rates and reach an agreement with a carrier.
Organizations using multi carrier shipping software are in a better
position to negotiate. The carrier has to earn the organization’s
business on every parcel. As a result, the organization can negotiate
better rates, drive down logistics spend and increase profitability.
Multi carrier shipping software allows an organization to meet
customer requests. If you ship B2B, your customer may prefer that you
ship parcels to them using their account, for example. Alternatively,
your customers may wish you ship using different carriers depending on location.
Organizations using a single carrier cannot accommodate such
requests. If they do, their carrier may penalize them, such as
revoking favored shipper status.
Organizations that ship B2C need to accommodate consumer requirements
for low cost and quick delivery services. Some of the most common
reasons customers abandon their online shopping purchases are high
shipping costs and long delivery times.
With a multi carrier shipping strategy an organization is better
placed to meet customers’ expectations around shipping.
Accommodating returns is a huge challenge for shippers. It is a fact
that online shoppers return goods in much higher numbers than brick
and mortar shoppers. Around 30 percent of all online orders are
returned — rising to 40 percent for clothing.
Organizations using a single carrier are not able to offer flexible
returns. Furthermore, some carriers are simply better than others at
A multi carrier strategy allows an organization to:
Get the best rates for returns
Offer different return shipping options for customers
Leverage carrier offerings such as pick up points
Overall, multi carrier shipping software helps organizations to save
time and money while improving customer service and lowering the high
costs of parcel shipping.
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.
MINUTE EXPLAINER: WHAT IS MULTI CARRIER SHIPPING SOFTWARE?
CUSTOMER DEMANDS WITH MULTI CARRIER SHIPPING SOFTWARE
LAST MILE DELIVERY: CHALLENGES AND OPPORTUNITIES