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:
- Better rates
- More capacity
- Greater negotiating power
- Better customer service
- Flexible returns
Let’s look at each of these in-depth.
Better Rates
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.
More Capacity
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.
Greater Negotiating Power
Carriers and shippers in an exclusive relationship can be lax with one another.
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.
Better Customer Service
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.
Flexible Returns
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 reverse logistics.
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.
