If you are not in the shipping software business, why are you spending so much time, energy, and money on managing, updating, and deploying shipping software? 

Cloud-based shipping systems deliver all the power of server-based systems at a fraction of the cost and can be deployed in days instead of months. The software provider, who IS in the software business, continually updates the software so you have instant access to the latest innovations — leaving you to focus on your core business. Let’s look at an example:
It’s 2am and somewhere in the world, your customer has just ordered a product from your website. What is the most efficient method of delivering their order to them?

The order might include products warehoused in different locations: multiple distribution centers, store locations, or even with a vendor or third party drop shipper. There might be multiple carriers or services that could reach the customer in the fastest or best manner. Past orders or customer preferences might influence the selection of the right carrier or service. Or even the contents of the shipment (high value, perishable, hazardous) might be factors.

Cloud-based technologies are being deployed in many of the leading retailers in the United States to address these issues: to optimize shipping with the end result of dramatically lowered costs, increased efficiency, accuracy, and service in delivering shipments to their customers.

What are some of the factors that lead to the choice of a cloud-based shipping solution?

1) Ease and cost of deployment
2) Visibility across the supply chain
3) Multiple distribution points
4) Optimizing the selection of service 
5) Modeling and learning rules based on past shipping behaviors 

Ease and Cost of Deployment. Typical cloud-based solutions are web browser-based, accessible from devices including PCs, tablets, and smartphones. Standard deployment of a solution typically takes less than 30 minutes with very low deployment costs. The solutions creates optimized labels, reads weight from attached scales, prints to thermal label printers, or integrates with warehouse or order management systems.
By comparison, a typical enterprise shipping solution starts at $50,000 in license fees, $200,000 in customization, and a two to three month deployment timeframe – less the ongoing cost of maintaining the software and servers on premise.

Visibility Across the Supply Chain. Whether you’re shipping from warehouse to a consumer, warehouse to a store, store to store, store to consumer, or from a supplier to any of those points, a cloud-based solution can provide immediate visibility into all shipments. From the time of order completion through picking/packing, carrier pickup, and eventual delivery, the entire process can be mapped out and accessed from any device, anytime, anywhere.

Multiple Distribution Points. As is true in real estate, so it is in shipping: location, location, location. The strategic advantage of being able to distribute products from multiple locations is a key realization of those who are the best at cross-channel shipping. Retailers such as REI, Nordstrom, Zumiez, and lululemon athletica are continuously seeking distribution point optimization. By strategically locating distribution centers in multiple parts of the country or the world, cheaper carriers and shipping services can reduce time-in-transit, leading to increased customer delight and lowered costs.

Optimizing Selection of Carrier and Service. Many retailers have learned that it’s sometimes unnecessary to send a shipment 2nd day air when the sender and recipient are less than 200 miles apart. Switching from premium air to ground services can save up to 70% of the shipping costs and still get the shipment to the destination in less or equivalent time. By building and leveraging business rules that can map the distance of a delivery, the smart retailer can benefit themselves and their customers. And last mile delivery options where a postal service can deliver the last mile provide an even more cost-effective delivery solution. Cloud-based solutions can seamlessly communicate with multiple parcel and freight shipment options without having to establish expensive client-server communications between the customer site and the carrier sites.

Modeling Business Rules Based on Past Shipping Behaviors. Cloud-based shipping solutions can retain and analyze data about past shipments, then leverage this data on the fly to determine optimization opportunities. The most current data about delivery areas where certain carriers will charge delivery area surcharges can factor into the selection of carrier and service — and as these charges can change without warning, by monitoring surcharge history, the cost and control of shipments can be optimized.

By carefully considering these opportunities presented by cloud-based technologies, today’s smartest retailers are innovating and competing more effectively and strategically while reducing costs and improving customer satisfaction.

Keith A. McCall is CTO & Founder, Enroute Systems Corporation.