If you are a high volume small parcel shipper, leveraging a multi carrier software solution is no longer optional. In this QAD Precision Report we look at the growth in the parcels market and discuss the benefits of multi carrier software solutions.
Growth in the Global Parcels Market
The e-commerce juggernaut is seemingly unstoppable. Online purchasing is not just changing the retail landscape — it has transformed the parcels market too. Globally, parcel shipping volumes shipping grew by an average of 5.8 percent between 2012 and 2016, and spiked 17.3 percent in 2017. Forecasts indicate that around 100 billion parcels will be shipped next year.
All this growth has been largely driven by e-commerce. As e-commerce continues to grow, customers have demanded a greater variety of transportation and delivery methods. This has created a number of last mile challenges. Retailers have a number of ways they can respond to these demands. These include using parcel lockers and Pick-Up and Drop-Off facilities, as well as weekend and evening deliveries.
Carriers have responded to the demands too. In May, FedEx it will offer seven day delivery in the US from January 2020. In July, UPS followed with an announcement that Sunday Ground services would become available from January.
The Impact of Parcel Growth on B2B Shippers
This growth may be largely driven by retail, but e-commerce has changed the way many global shippers reach their customers. Parcels are becoming a significantly larger part of the transportation mix for all kinds of industries that ship business to business. This means there is a greater need to manage and control the parcel shipping spend.
Switching between carriers in an ad hoc manner can be a time consuming drain on resources. Staff also must ensure that each shipment is compliant with each particular carrier’s requirements. Not doing so leads to delays, lost packages, additional costs and the inability to use particular shipping services.
In addition, global shippers often find themselves handling different carriers at separate geographical locations. Furthermore, companies working across various international markets need to comply with a variety of ever changing shipping requirements. This means companies need knowledge of import tariffs, packaging specifications, customs rules and compliance regulations. Finally, this makes it very difficult to track shipping data and control parcel spend. This is because the data is not centralized but stored in a disparate array of shipping system silos.
Is Direct Injection the Answer?
Direct injection — also known as zone skipping or hub induction — is one possible solution to enterprise shipping needs. This provides a better service to shippers while reducing freight spend. When multiple customers place an order, direct injection consolidates these orders for the first leg of their journey. After that, the goods are put directly into a parcel carrier network for the final delivery. This is particularly advantageous when you need to ship items across borders. Direct injection can reduce customs clearance related costs and simplify the overall shipping process.
Some carriers offer consolidated services where they will do direct injection on your behalf. Alternatively, a shipper can implement it themselves with their choice of carriers for the first leg and final mile. The latter approach provides greater flexibility as it allows shippers to choose local carriers in different countries and regions that have the best networks to serve their customers. The downside of direct injection is that it can greatly increase the number of carriers and services that an organization has to work with, each with their own set of unique requirements.
The Importance of Multi Carrier Software Solutions
The sheer volume of global parcel shipments emphasizes the importance of multi carrier software solutions to provide consistent service to customers. Businesses were once able to get away with having a partnership with a single carrier. Indeed, this was often preferable as it allowed companies to negotiate favorable rates and standardize their shipping procedures. Today, however, this is a huge risk. Carriers and the services they offer are continually changing. As a result, leveraging multiple carriers can give businesses an advantage, providing more shipping options and competitive rates. Furthermore, with a robust multi carrier software solution, organizations can seamlessly switch between carriers while maintaining enterprise-wide shipping procedures.
Multi carrier solutions with a comprehensive global network also allow you to future-proof your last mile delivery options. As carriers upgrade and add new capabilities or routes, you will be able to leverage these too. As a result, you will ensure that you have access to the full range of delivery options.
Whatever you ship, your number one goal should be to deliver packages in a timely manner and without any damage, no matter where your customers are located. Multi carrier solutions make it easier for businesses to meet expectations and deliver a quality service every time while complying with the appropriate shipping laws and regulations. If your business handles a high volume of shipments implementing a software solution with multi carrier compliance is crucial for your business success.
About QAD Precision – Trusted Global Trade and Transportation Execution
QAD Precision (Precision Software), a division of QAD Inc., provides industry-leading global trade management, transportation execution and multi carrier shipping software solutions from a single, integrated platform. Preeminent industry leaders in every region of the world rely on QAD Precision’s global support centers to leverage thousands of carriers and manage millions of shipping transactions every day. Our open architecture easily integrates with Enterprise Resource Planning, Warehouse Management Systems and legacy solutions. An ISO-certified company, QAD Precision assists companies to minimize shipping costs, optimize first mile and last mile deliveries, automate free trade agreement compliance, avoid customs delays and mitigate the risks associated with dynamic trading environments to maximize their competitive advantage. QAD Precision’s customers span multiple industries including banking and finance, life sciences, high technology, retail, industrial, automotive, higher education and public sector as well as logistics providers. For more information about QAD Precision, visit www.qadprecision.com.
LET’S KEEP IN TOUCH
To subscribe to our blog, or to receive notifications about QAD Precision events, webinars and news, please click here.