Winning Peak Season with Multi Carrier Shipping Software

Peak season 2021 looks to be a challenging few months for shippers and carriers. In this QAD Precision Report we look at how multi carrier shipping software helps high volume shippers navigate these challenges.

The last two years have been especially challenging for parcel shippers and their carrier partners. From March last year, parcel volumes skyrocketed beyond all expectations. While much of the world has returned to a semblance of normality, parcel shipping volumes look set to be extremely high during this year’s peak season.

In 2016, 1.66 billion people bought goods online. This year, forecasts suggest that more than 2.14 billion of us will make an online purchase.

Be Prepared for Surcharges

From the summer months, carriers have warned of peak season surcharges. In June, UPS announced that peak season surcharges will take effect from 31 October 2021 and remain in place until 15 January 2022. Any UPS customer that shipped more than 25,000 parcels in any week since February last year will be subject to surcharges. 

Big Brown also stated it will calculate surcharges based on pre-pandemic volumes. The amount in extra charges will depend on how much a shipper's peak season weekly volume surpasses its pre-pandemic weekly volume in February 2020. In some cases, this can be as high as $6.15 per parcel.

Similarly, in August FedEx announced its peak season surcharges. Like UPS, FedEx will calculate and apply surcharges to customers exceeding their February 2020 weekly volumes. In addition, from 4 October 2021 until 16 January 2022, the carrier will also add charges for oversized parcels, packages that require additional handling, and shipments not authorized for FedEx Ground.

Furthermore, FedEx is to apply a per-package surcharge for Ground Economy shipments. These surcharges will be in place from 29 November until 12 December and cost up to $3 per parcel. 

Peak Season Jobs vs the Great Resignation

Peak shipping season is always a challenge, and one that parcel carriers prepare for. UPS announced over 100,ooo jobs this September, including full- and part-time seasonal jobs. It’s main rival, FedEx has 90,000 roles on offer. Filling these jobs could prove to be a challenge for carriers. 

Firstly, they will be competing with retailers that are also looking to fill positions to support their logistics operations. In the US, Walmart has 20,000 roles to fill; Amazon has 150,000.

Secondly, across much of the world, the pandemic has caused employees to reassess their lives and livelihoods. In August of this year, 4.3 million people in the United States quit their jobs. In addition, more than 11.5 million Americans left their employment earlier in the year. 

This trend, known as the Great Resignation, is not confined to the US. A survey conducted by Microsoft of over 30,000 employees around the world, found that 41 percent of workers were considering leaving their jobs or changing professions.

The reasons workers give for leaving their jobs vary — a reassessment of their priorities; a transition to being a full time stay at home parent; or treatment they received from employers over the pandemic. Whatever the reason, the fact remains that the power that has rested with the employers for years is now firmly in the hands of employees. 

Shippers themselves may have trouble attracting the number of employees they need to manage their peak season shipping. Furthermore, it would be wise to assume that this year, unlike previous years, their carrier partners may not be able to fill all their seasonal jobs either.

Adding More Capacity with Multi Carrier Shipping Software

For high volume shippers, avoiding surcharges in their entirety is very unlikely. However, a multi carrier strategy means that shippers can remain compliant with service level agreements, while containing the number of parcels that exceed their February 2020 volumes.

Multi carrier shipping software is not just about controlling shipping costs — as important as that is. As well as the ability to shift volume to lower cost carriers, shippers also gain more lanes, service levels and capacity. Here we look at four more advantages of leveraging a multi carrier shipping solution.

AUTOMATED ROUTING

Ideally, your multi carrier solution should offer automation. A comprehensive multi carrier shipping solution will automatically route parcels to the lowest cost service that will meet the necessary transit time. This automated routing works alongside a company’s business rules.

For example, parcels with certain characteristics, such as size, weight or dimensions, can be routed to a chosen carrier and service without human intervention.

Furthermore, parcels can be routed to a specific carrier depending on the customer or the destination.

This also means that logistics staff do not have to rate shop manually. At any time of the year this slows down parcel shipping; during peak season it is almost impossible to do this and ensure timely delivery.

CENTRALIZED TRACKING, ALERTS AND REAL TIME INSIGHTS

Another advantage of multi carrier shipping solutions is that it enables shippers to track all parcels, with any carrier, from the same central portal. If a package is at risk of missing its delivery deadline, automatic alerts will let key personnel know of the problem. 

While delays are sometimes unavoidable, especially during peak season, this allows customer support teams and logistics staff to take proactive steps to fix the issue. It is a far better customer service experience to have your team reach out to the customer with a proposed solution, instead of the customer calling you a day or so after they expected a delivery.

Ideally, your multi carrier shipping software should include real time insights. This means that personnel can monitor KPIs, such as shipping volume by carrier, delayed deliveries and so forth.

SAVING WITH CONSOLIDATIONS

Shippers looking to use multi carrier shipping software should look for a solution that supports consolidations. Briefly, this means bundling parcels together that are being sent to the same country or geographic area.

Consolidation — also known as direct injection or zone skipping — can cut costs, particularly for international shipments. Once the shipment arrives in-country the parcels are injected into a carrier’s network for last mile delivery.

With multi carrier shipping software, shippers can use different carriers for the first and last miles. Alternatively, they can use the consolidation options offered by carriers, such as FedEx IPD, UPS World Ease or DHL Break Bulk Express. 

ONGOING CARRIER COMPLIANCE

Last, but not least, your multi carrier solutions provider is responsible for carrier compliance. As a result, shippers remain up to date with carrier requirements for electronic communications, labeling and so forth. 

Carriers strictly enforce these standards. They are necessary in order to process shipments through their networks reliably. Shippers that do not comply with these standards will be penalized by carriers. 

How QAD Precision Can Help

QAD Precision Multi Carrier Shipping Software is a global, multi carrier, multimodal solution offering access to more than 5,500 carrier services around the world. The solution is multilingual, multi currency and supports multi date formats. To see how multi carrier shipping could benefit your organization, please contact QAD Precision here.

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Further Reading

3 MINUTE EXPLAINER: WHAT IS MULTI CARRIER SHIPPING SOFTWARE?

CHOOSING A GLOBAL MULTI CARRIER SHIPPING SOLUTION: 3 QUESTIONS TO ASK

THE BENEFITS OF INTEGRATING COMPLIANCE AND MULTI CARRIER SHIPPING SOLUTIONS