The days of single carrier shipping strategies are now considered ancient history. If your company isn’t leveraging multi-carrier TMS (Transportation Management Software) to increase profits, it’s probably missing the boat. Instead of investing in a TMS solution, however, many shop for one based only on price, and that’s a big mistake. Better yet, more advanced TMS solutions are designed to make money (so much that even Jordan Belfort would be envious) and help a company grow. Therefore, it’s best to consider the ROI and investment potential vs. the start-up costs as the dominant purchasing factor.
Executives charged with evaluating and implementing TMS solutions on behalf of their companies can be categorized into two groups: the prudent or the investor. The prudent guard their company’s cash box as if it were their own and take great pride in doing so, while the investor lays the groundwork for a shipping solution that practically prints money.
The mistake I often see? Executives charged with implementing TMS shop for a solution as if they were shopping for a car. They research it for months, check the features, get confused or frustrated and end up buying the cheapest one. They are the prudent, and they will have their reward, but they are simply not leveraging TMS’ inherent ability to continually beat the competition and increase profits. Rather, they are just looking to save on the purchase price. The next group, the investor, views TMS for what it is: an income-generating machine that pays dividends for a generation or more. They are creating a seemingly endless stream of cash flow and contributing toward corporate growth.
The problem is philosophical. The first type views TMS as a system required to perform perfunctory tasks such as print carrier compliance labels, international forms and BOLs. They wait too long to get a system and then lament for years because their system can’t deliver the functionality required to properly run their business. Conversely, the second type spends more time and money designing a system that whips the competition, provide endless ROI and possesses an untethered capacity to deploy business rules and functionality that help run their e-commerce business. A high growth e-commerce company has a solid TMS solution.
How you view multi-carrier TMS will have a tremendous impact on your company’s bottom line. Here are 10 ways one can be leveraged to help drive revenue, beat the competition, and increase profits:
1. Automated selection of least cost, day definite delivery services among all carriers/all modes - Quicker delivery is an expectation. Heck, the USPS is delivering orders on Sundays to meet changing consumer demand. Better keep up with the changes whether you like it or not. If your company can’t deliver by yesterday, customers will find another e-commerce store that can. One carrier can’t do it all! TMS will help achieve desired delivery objectives and rate shop all carriers/modes including: TL, LTL, Regionals, UPS, FedEx, DHL, USPS, couriers, messengers and many more.
A good TMS can quickly add new services that help a business grow. Here are two examples: International Bridge will help increase business in places few consider important such as AK, Hawaii, Puerto Rico and US Territories. Vanguard Global saves money and delivers faster while helping increase sales into Canada.
With TMS, all classes, such as SurePost, SmartPost, DHL Global Mail, CWT, MWT and many, many others, are included in the rate shop. Expect transportation costs to decrease 8-15% or more immediately after a system is in place.
2. Ship from stores – Does your e-commerce company have brick and mortar stores? Can they ship from a single enterprise-shipping platform from those stores while adhering to a company’s business rules or do they use carrier provided disparate systems? Is the critical shipping information visible throughout the organization? Are business rules enforced? Omni-channel commerce is driving growth in this area. A good TMS solution eliminates disparate systems across an entire enterprise, increases shipment accuracy and helps delight customers.
3. Enforce S & H policies – It’s one thing to create shipping policies, it’s yet another to enforce them. Companies lose four to eight percent of shipping spend by not deploying automated enforcement tools inherent in a well-designed TMS solution.
4. Avoid Fees - Accessorial fees account for 30% or more of small packager carrier invoices. Due to the great recession, LTL carriers got serious about reclassifying and reweighing their freight to increase revenue and although the recession is now over, it seems they really like having the extra money so they’ve decided to keep up the revenue enhancement, albeit at your expense – no surprise there. Many fees are unexpected and some executives believe they are unavoidable. They’re wrong. A TMS is the best way to avoid and/or reduce fees. Save an additional 5-10% in this area.
5. Validate addresses – This should be done at the time of purchase, when an order is placed but even today, many incorrect addresses slip through the cracks and can cost a company $12.00 or more each time. That doesn’t include the real cost — the inability to achieve the desired delivery objective resulting in customer dissatisfaction. TMS will validate addresses in the cart and at shipment execution, ensuring deliverability and reducing unnecessary fees. Many executives are completely unaware this is even happening, so check your carrier invoice periodically to be sure.
6. 3rd Party Insurance – This is one of the biggest no-brainers. Expect savings of 30-50% or more on insurance costs and increased coverage. TMS will charge back the list price of declared value to the customer thus enabling a company to realize a profit. Companies such as Transguardian offer heavily discounted insurance and will insure even up to $100,000 or more per package (with any carrier) and if a package gets lost, they’ll send an investigator to find out what happened to it! U-Pic is another great alternative.
7. Switching residential deliveries to the USPS - This is not your father’s post office; it’s the new USPS. They track, they ship, they deliver and when it comes to residential delivery, they do it better and more efficiently than anyone else… period. That explains why they are the principle carrier for residential delivery for some of the largest ecommerce companies in the world. You may need to get over the fact they lost one of your packages in 2008 and give them another try. Companies that switch to the USPS can easily realize shipping cost reduction of 15- 20% or more. Know this: you competition is switching, saving and growing as a result! For more information contact the USPS ecommerce expert, Peter Manning at peter.l.manning@usps.gov.
8. Regional carriers – Business is good at regional shipping companies such as Eastern Connection, Lone Star Overnight, OnTrac, Spee-Dee Delivery, US Cargo, LaserShip and others. Regional carriers can provide significant savings between 15-20% and their rates can easily be included in a TMS solution.
9. Third Party Logistics for LTL/TL services - 3PLs can leverage millions of dollars of buying power and can generally save 15-30% or more on LTL/TL shipping. Their rates/services can be exposed in a good TMS solution and require no maintenance. Some examples: check out CT Logistics (www.shipandsave.com). They provide unparalleled service and extremely low shipping rates for LTL/TL carriers and as an added value, all invoices are pre-audited and consolidated. Other popular brands to consider: Echo Logistics and Coyote Logistics, among others.
10. Returns – Eliminate old-fashioned paper/label-based return processes that generate millions of tons of waste. Eliminating waste equates to higher profits and happier customers. Connect a dynamic return solution to TMS to help reduce waste and increase profits on returns.
It’s time to rethink shipping strategies; giving all the business to a single carrier to achieve tiered revenue targets is no longer as effective as it once was. Annual double-digit rate increases appear to be taking a toll. Multi-carrier TMS is simply a requirement. When searching for one, please consider the payback, not the price. This is not a time to be prudent; it’s a time to invest. I assure you the result will be dramatically different. Here’s an example: a company that spends $5 million per year on transportation can easily see savings of half a million or more. That means saving a few thousand dollars on the TMS price tag is meaningless.
Executives charged with evaluating and implementing TMS solutions on behalf of their companies can be categorized into two groups: the prudent or the investor. The prudent guard their company’s cash box as if it were their own and take great pride in doing so, while the investor lays the groundwork for a shipping solution that practically prints money.
The mistake I often see? Executives charged with implementing TMS shop for a solution as if they were shopping for a car. They research it for months, check the features, get confused or frustrated and end up buying the cheapest one. They are the prudent, and they will have their reward, but they are simply not leveraging TMS’ inherent ability to continually beat the competition and increase profits. Rather, they are just looking to save on the purchase price. The next group, the investor, views TMS for what it is: an income-generating machine that pays dividends for a generation or more. They are creating a seemingly endless stream of cash flow and contributing toward corporate growth.
The problem is philosophical. The first type views TMS as a system required to perform perfunctory tasks such as print carrier compliance labels, international forms and BOLs. They wait too long to get a system and then lament for years because their system can’t deliver the functionality required to properly run their business. Conversely, the second type spends more time and money designing a system that whips the competition, provide endless ROI and possesses an untethered capacity to deploy business rules and functionality that help run their e-commerce business. A high growth e-commerce company has a solid TMS solution.
How you view multi-carrier TMS will have a tremendous impact on your company’s bottom line. Here are 10 ways one can be leveraged to help drive revenue, beat the competition, and increase profits:
1. Automated selection of least cost, day definite delivery services among all carriers/all modes - Quicker delivery is an expectation. Heck, the USPS is delivering orders on Sundays to meet changing consumer demand. Better keep up with the changes whether you like it or not. If your company can’t deliver by yesterday, customers will find another e-commerce store that can. One carrier can’t do it all! TMS will help achieve desired delivery objectives and rate shop all carriers/modes including: TL, LTL, Regionals, UPS, FedEx, DHL, USPS, couriers, messengers and many more.
A good TMS can quickly add new services that help a business grow. Here are two examples: International Bridge will help increase business in places few consider important such as AK, Hawaii, Puerto Rico and US Territories. Vanguard Global saves money and delivers faster while helping increase sales into Canada.
With TMS, all classes, such as SurePost, SmartPost, DHL Global Mail, CWT, MWT and many, many others, are included in the rate shop. Expect transportation costs to decrease 8-15% or more immediately after a system is in place.
2. Ship from stores – Does your e-commerce company have brick and mortar stores? Can they ship from a single enterprise-shipping platform from those stores while adhering to a company’s business rules or do they use carrier provided disparate systems? Is the critical shipping information visible throughout the organization? Are business rules enforced? Omni-channel commerce is driving growth in this area. A good TMS solution eliminates disparate systems across an entire enterprise, increases shipment accuracy and helps delight customers.
3. Enforce S & H policies – It’s one thing to create shipping policies, it’s yet another to enforce them. Companies lose four to eight percent of shipping spend by not deploying automated enforcement tools inherent in a well-designed TMS solution.
4. Avoid Fees - Accessorial fees account for 30% or more of small packager carrier invoices. Due to the great recession, LTL carriers got serious about reclassifying and reweighing their freight to increase revenue and although the recession is now over, it seems they really like having the extra money so they’ve decided to keep up the revenue enhancement, albeit at your expense – no surprise there. Many fees are unexpected and some executives believe they are unavoidable. They’re wrong. A TMS is the best way to avoid and/or reduce fees. Save an additional 5-10% in this area.
5. Validate addresses – This should be done at the time of purchase, when an order is placed but even today, many incorrect addresses slip through the cracks and can cost a company $12.00 or more each time. That doesn’t include the real cost — the inability to achieve the desired delivery objective resulting in customer dissatisfaction. TMS will validate addresses in the cart and at shipment execution, ensuring deliverability and reducing unnecessary fees. Many executives are completely unaware this is even happening, so check your carrier invoice periodically to be sure.
6. 3rd Party Insurance – This is one of the biggest no-brainers. Expect savings of 30-50% or more on insurance costs and increased coverage. TMS will charge back the list price of declared value to the customer thus enabling a company to realize a profit. Companies such as Transguardian offer heavily discounted insurance and will insure even up to $100,000 or more per package (with any carrier) and if a package gets lost, they’ll send an investigator to find out what happened to it! U-Pic is another great alternative.
7. Switching residential deliveries to the USPS - This is not your father’s post office; it’s the new USPS. They track, they ship, they deliver and when it comes to residential delivery, they do it better and more efficiently than anyone else… period. That explains why they are the principle carrier for residential delivery for some of the largest ecommerce companies in the world. You may need to get over the fact they lost one of your packages in 2008 and give them another try. Companies that switch to the USPS can easily realize shipping cost reduction of 15- 20% or more. Know this: you competition is switching, saving and growing as a result! For more information contact the USPS ecommerce expert, Peter Manning at peter.l.manning@usps.gov.
8. Regional carriers – Business is good at regional shipping companies such as Eastern Connection, Lone Star Overnight, OnTrac, Spee-Dee Delivery, US Cargo, LaserShip and others. Regional carriers can provide significant savings between 15-20% and their rates can easily be included in a TMS solution.
9. Third Party Logistics for LTL/TL services - 3PLs can leverage millions of dollars of buying power and can generally save 15-30% or more on LTL/TL shipping. Their rates/services can be exposed in a good TMS solution and require no maintenance. Some examples: check out CT Logistics (www.shipandsave.com). They provide unparalleled service and extremely low shipping rates for LTL/TL carriers and as an added value, all invoices are pre-audited and consolidated. Other popular brands to consider: Echo Logistics and Coyote Logistics, among others.
10. Returns – Eliminate old-fashioned paper/label-based return processes that generate millions of tons of waste. Eliminating waste equates to higher profits and happier customers. Connect a dynamic return solution to TMS to help reduce waste and increase profits on returns.
It’s time to rethink shipping strategies; giving all the business to a single carrier to achieve tiered revenue targets is no longer as effective as it once was. Annual double-digit rate increases appear to be taking a toll. Multi-carrier TMS is simply a requirement. When searching for one, please consider the payback, not the price. This is not a time to be prudent; it’s a time to invest. I assure you the result will be dramatically different. Here’s an example: a company that spends $5 million per year on transportation can easily see savings of half a million or more. That means saving a few thousand dollars on the TMS price tag is meaningless.
