Parcel Network Optimization is not a one-time event for mega-volume parcel shippers (hereafter referred to as "Shipper(s)"). Green Mountain Consulting defines a mega-volume shipper as one with over 4 million parcel shipments annually and with some complexity in their parcel distribution network (multiple distribution centers, multiple business units, multiple parcel carriers and service levels, etc.). In recent years, Shippers have more intricacy in their parcel networks which require a sustainable optimization plan. The increased complexity stems from the challenges of implementing and maintaining an Omni Channel distribution network due to demands from customers to deliver faster and cheaper. As a result, many Shippers are optimizing their parcel network on a sustained basis to address these new complications. For many Shippers, ongoing optimization is extremely difficult and beyond their control due to: 

---Mega parcel volumes and ineffective tools which prevent accurate network modeling, data management and analysis
---Limited bandwidth and expertise that hamper the ability to tackle your parcel spend aggressively
---Limited view of the market which prohibits you from knowing what you don't know

In order to optimally manage your parcel spend on a sustained basis, the Shipper must consider the following:
Parcel Contract Strength 
• Pricing rationalization/strength of contract 
• Maximization of multiple carrier contracts
• Unrealized discounts & incentives
• Undiscounted services

Network Efficiency
• Consolidation opportunities
• Physical bundling
• Order consolidation across fulfillment channels 

Mode Selection
• Express services to ground
• Ground is single piece to hundredweight

Waste
• Weekly service charges for inactive accounts
• Use of 8:00am delivery service
• Anomalies within rate cards
• Unwarranted use of express services
• Next day 10:30am to 3:00pm opportunity

Cost Avoidance
• Use of declared value
• Use of flat rate products
• Use of DC bypass products (UPS Trade Direct to Ocean; FedEx International Priority Direct)
• Address corrections

When reviewing their parcel network, Shippers have more options to consider than ever before. Many Shippers are moving from a one-parcel carrier approach to a regional, or even local, view to meet these requirements. Such views bring more carriers and service levels into play to allow the Shipper to "dial in" a specific plan for each channel to better fit the demands of the customer. Here are some questions that Shippers are asking when considering their parcel carrier selection: 

Carrier Selection
• What specific lanes are best for UPS and/or FedEx? 
• What specific lanes can I segment for UPS SurePost and FedEx SmartPost?
• Where should we use regional carriers like OnTrac, Lasership, Eastern Connection, etc.?
• Where should we use local carriers like Dynamex, A1Express, Zipments, etc.?
• Where should we use USPS?

The complexity in the decision making process has increased with so many questions to consider. Depending upon the needs of each customer, Shippers have to develop a methodology to weigh challenges and opportunities in order to properly determine the best result. Some Shippers perform the analytical work internally to derive answers to the cost and service equation, while others select a provider that can bring an expertise the Shipper does not possess (a view of the parcel market, analytical tools, and resource bandwidth, to name a few). Either way, the demands of the customer are dictating a complex picture. It is crucial that the Shipper recognize a way to address these demands in order to win business while, simultaneously, managing and sustaining the cost and service of their parcel network.