multi carrier shipping, parcels

With parcel volumes rising exponentially this year, high volume shippers are seeing benefits leveraging multi carrier shipping software. In this QAD Precision Report we discuss the benefits of multi carrier parcel shipping solutions.

Exponential Growth in the Global Parcels Market

Even before the global pandemic shut stores around the world, e-commerce was an unstoppable force. Last year, over 100 billion parcels were shipped across 13 major markets — Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Norway, Sweden, the UK and the US.

Small parcel volumes will continue to rise. Forecasts suggest that parcel volumes will more than double by 2026. This growth is largely due to retail e-commerce.

However, e-commerce has impacted other industries as well. Parcel shipping has become increasingly important for companies that ship business-to-business too.

DHL Supply Chain’s 2019 report, The Logistics Transport Evolution: The Road Ahead, found that e-commerce volumes and demographic changes were driving demand for ground transportation. The report found that 71 percent of companies surveyed said that ground transportation was critical to their operations. DHL Supply Chain also found that demand for ground transportation meant that the market was undergoing changes in excess of normal market fluctuations. Bear in mind that this report predates the impact of Covid-19 on logistics and the supply chain.

Simply put, more parcels are going to more customers, in more places than ever before. With increased volumes, shippers also have an increased need to manage and control the parcel shipping spend.

The Importance of Multi Carrier Shipping Software 

Many companies leverage the shipping solutions provided by carriers. Some will use two or more carriers, each with their own dedicated shipping software.

This does give a shipper more options. However, it is also time consuming if staff have to manually compare carriers, looking for the best rate and service level. In a high volume shipping environment, that becomes unworkable.

As a result, companies tend to use one carrier for deliveries bound for a certain region or geography. A second carrier is used for other deliveries.

One downside to this is that shipping data is siloed across different carrier systems. Another, more critical consideration is that shippers cannot ensure that every parcel is sent at the lowest possible cost.

Given sheer volume of global parcel shipments, companies are turning to multi carrier shipping software. Here we look at five ways multi-carrier solutions can assist high volume shippers.

MORE CAPACITY

Not that long ago it was preferable for a large volume shipper to use a single carrier. This allowed them to leverage volume discounts and standardize parcel shipping. These days, a single carrier strategy is a risk.

In October, both UPS and FedEx warned many high volume shippers that most of their peak season capacity is already allotted. Other carriers stated that they are not taking on new customers until after peak season. Similarly,  DHL eCommerce Solutions Regional Sales Manager Kim Gimble told retail shippers to “shake up that carrier mix” by diversifying their carriers.

Shippers in Europe or Asia have a multitude of carriers to choose from. Although shippers in the US tend to send most parcel shipments with global carriers UPS and FedEx, this year many turned to regional carriers as well. In 2020, 17 percent of US retail volume was handled by regional carriers. For comparison, regional carriers handled just 3.8 percent of retail volume in 2019.

Multi carrier software gives shippers flexibility in logistics and fulfillment at times when capacity is tight. Without a multi carrier strategy, shippers are vulnerable to capacity outages and longer transit times.

STANDARDIZED PROCEDURES

A multi carrier shipping system allows organizations to standardize shipping. Shippers can streamline shipping by seamlessly switching between carriers, while maintaining enterprise-wide shipping policies.

In addition, shippers working from different sites around the world often use different carriers at each location. This adds complexity. With multi carrier shipping software, all sites can follow the same rules for shipping, no matter what carriers they use.

BETTER VISIBILITY AND CONTROL

With multi carrier shipping software logistics managers can track all shipments, with any carrier from a central location. Multi carrier parcel shipping software with exception alerts also provides real-time tracking and status updates for all packages. 

FUTURE-PROOF YOUR DELIVERY STRATEGY

Multi carrier parcel shipping solutions allow you to future-proof your delivery options. Carriers are continually updating their services and capabilities. By leveraging multiple carriers, shippers have more options, rates and more capacity. As a result, they can provide consistent deliveries and ongoing customer service.

SAVE TIME AND MONEY WITH CONSOLIDATIONS

Consolidations — also called direct injection, zone skipping and hub induction — reduces freight spend. When multiple customers place orders going to the same region, city or country, multi carrier shipping software allows you to consolidate these into a single shipment.

This is particularly beneficial for international shipments. A consolidated shipment only requires a single customs declaration. Once the shipment arrives, individual shipments are put into the parcel carrier network for delivery. Consolidation simplifies the overall shipping process.

Unlike the consolidation options available from carriers, multi carrier solutions allow you to use one carrier for the first mile, and a different carrier for the final mile. This gives you more flexibility as you leverage local and regional carriers as well as global players.

Conclusion

Whether a company ships B2B or B2C, your customers expect to receive their packages in a timely manner. Multi carrier shipping solutions make it easier for enterprises to meet these customer expectations.

LEAVE A REPLY