THE IMPORTANCE OF MULTI CARRIER COMPLIANCE

The holiday season is upon us again and there are a noticeable uptick in articles and news items related to the growth of e-tailing. In the past couple of weeks there have been articles from various sources predicting growth of between 11% and 15% and when to expect the peak period. The information emanating from the parcel carriers is particularly interesting and provides an insight into the challenges that they experience at this time of the year.

UPS expects their daily shipping volume to increase by 8% during peak season, with pick-up volumes for Cyber Monday increasing to 10%. FedEx is expecting a 13% increase compared to last year’s busiest week, with more than 85 million shipments expected to move through its global networks during the week of December 1 – 7.

These volumes are astounding, and highlight the importance of the carrier certification programs and their insistence on enforcing stringent labeling and electronic communication standards. If these standards were not enforced it simply would not be possible for these carriers to move such a high volume of parcels through the networks. Shippers who fail to adhere to these  requirements are at a risk of seeing delays, lost packages, extra costs or the inability to use particular services.

In the past it may have sufficed to have a relationship with a single carrier and put in place the systems and processes to deal with that; this is no longer the case and not only because of the risk of putting all your eggs in one basket. The carriers and services that an organization needs to use have likely been driven by numerous factors including cost, providing a consistent level of service to customers and customer mandated shipping requirements.

We see more and more of our customers using Direct Injection sometimes referred to as Hub Induction or Zone Skipping to provide better service to customers and to reduce freight spend. This is where orders from multiple customers are aggregated for the first leg of their journey and subsequently are put directly into a parcel carrier network for the final delivery. It can be particularly advantageous when shipping across borders as it can significantly reduce the customs clearance related costs and also simplify the overall process.

The carriers offer consolidated services where they will do this on your behalf or a shipper can implement it themselves providing carrier choice for first leg and final mile. The second approach provides for greater flexibility as it allows shippers to choose local carriers in different countries and regions whose network is best placed to serve their customers. The downside of Direct Injection is that it can greatly increase the number of carriers and services that an organization is required to deal with, each with their own unique set of requirements.

As mentioned customers can, and are doing more often; mandate shipping requirements and this typically takes the form of them specifying a carrier, service and account to be used. This has the potential to impact on entire shipping processes particularly in highly automated or high volume environments if it is not handled systematically. This means meeting the customer carrier’s requirements from within the shippers system.

The goal for shippers is to get product to the customer on time without damage and arranging the transport at the lowest cost. This puts the onus on the shipper to put the systems in place that will allow the labels, documents and electronic communications be produced in accordance with the carrier requirements. Is this possible with the systems you have in place today?

This article was written by Paul Murphy, VP Product Management at Precision Software, a division of QAD Inc.  Paul has over 18 years experience in the Supply Chain Industry. Murphy joined Precision Software in 1996 and was part of the team that developed the first iteration of the PRECISION solution. He has held various roles in Product Development, Implementation Services and Product Management.