Technology is supposed to make our jobs easier, and there is perhaps nowhere that this is more true than in the shipping arena. In our industry, there is a multitude of tedious tasks that need to be performed: for example, filling out shipping addresses, calculating and comparing rates, communicating with customers and tracking shipments. In addition to saving us time, technology can also minimize mistakes and save our organizations money. Penalties of five dollars to $10 per shipment are often imposed if address information or other data is incorrectly or incompletely entered. There are numerous ways for organizations to manage their shipping tasks and minimize errors to expedite the processes and to save money.
Customary Shipping Methods
To understand the basics, it may be useful to look at the traditional way to process a shipment, which consists of entering handwritten information on a form called a waybill. The traditionally accepted method involves the following steps:
- Fill out the address you are shipping from with your carrier account number.
- Record your internal billing information, such as your invoice number or a customers purchase order number, so that you will be able to reference the package.
- Write the address of the recipient.
- Select the service that you want, such as Priority Overnight or 2-Day.
- Mark the type of packaging that you are using.
- Enter the weight of your package.
- Note any special options such as Saturday Delivery.
- Specify the method of payment you will use to pay for shipping charges.
- Designate any other options such as Adult Signature Required.
You can imagine how time-consuming and error-prone this process can be and even then, you still dont know how much this package is going to cost to ship. For that, you would have to look up the ZIP Code on a chart to determine the zone that the package is in. Finally, you would have to look in the rates book to find the intersection of your packages weight in the zone cell for the service that you are selecting. Can you imagine having to do this for multiple packages a day? And how burdensome would it be to assess rates for multiple carriers in order to compare rates for the same services?
Legacy Shipping Systems
Computerized shipping systems were first used in the early 1980s, shortly after the introduction of the personal computer (PC). I refer to these as legacy shipping systems because these computerized shipping systems have been around for the longest period of time. With the advances of technology in the last
The ability to store data is one of the most significant benefits gained from this advanced technology. In shipping, this means that we only need to enter address information and account information once, so that we do not have to re-enter it each time we need to prepare a shipping label. The real savings of time comes from the capability to create an address book. This enables us to enter addresses that we ship to frequently and then select them, rather than re-type them for subsequent shipments to the same recipient. Additionally, almost all address books allow us to import addresses from other sources, such as Microsoft Outlook.
The ability to store data also provides us with the ability to maintain a historical file of all of our package shipments, thereby giving us the instant ability to retrieve shipment details or track a package when a customer calls. An added benefit is the ability to generate reports that help us to evaluate our spending patterns and analyze our shipping habits. In addition, we can store ZIP Codes, zone tables, weights and rates for each service level and for multiple carriers, which makes comparisons of services between multiple carriers realistic. By viewing a variety of options that are available, an organization can realize substantial savings.
While there have been major innovations in the types of shipping systems available today, we still have organizations that rely on PC systems. These systems typically run as a Windows application and can be interfaced with electronic scales, thermal label printers, barcode scanners and report printers.
Acquiring Shipping Systems
There are various ways that a shipper can acquire a shipping system. Individual carriers each offer systems for their customers to use, and most of them provide the software at no charge. Typically, customers have to provide their own PCs, scales and label printers. Some carriers may help offset these costs if the customer commits to a specified volume of shipments. Unfortunately, this can limit your ability to get the best rates available.
Another method of acquiring a shipping system is to purchase it directly from a vendor. Some companies that sell transportation management systems and warehouse management systems also offer shipping systems. Other companies specifically market shipping systems only and offer consulting services to help analyze an organizations needs. Most sell their software or charge a fee for a software license. The fees can range from $500 to more than $50,000 based on the number of features and level of customization. In addition, they typically charge an annual fee for software maintenance so that rates displayed by carriers are always accurate and up-to-date.
Online Shipping Systems
By the late 1990s, advances in Internet technology supported online shipping systems that easily could be accessed on the Web, i.e., www.UPS.com, www.FedEx.com, www.DHL.com, or www.USPS.com. A major benefit of these systems is that they are all free, as is the newest entry in online shipping, www.RedRoller.com, which offers comparisons of rates and services for multiple carriers in one location.
These online shipping systems offer all the features of the first generation systems and more. One common feature they share is the drop-off locator, which provides the address of the nearest drop-off point. At some sites, maps and directions are provided from your ship from address to the drop-off location.
E-mail notification systems are also another major tool provided by online shipping sites. You can notify customers that packages have been shipped and provide tracking information. The sender can receive e-mails to confirm delivery and receive signature confirmation.
As wide area networks and high-speed connections have become commonly available, so has the growth of enterprise shipping systems. This version is a secure, Web-based system for multiple users in multiple locations. Organizations with multiple warehouses located worldwide have the greatest need for enterprise systems. A drawback for legacy systems is that each computer has to run the shipping software application, and when a change is needed, i.e., a carrier rate increase occurs, every PC needs to be updated. With enterprise shipping systems, the software resides in and is maintained in one central location, which eliminates the redundant tasks involved in updating individual computers.
Organizations can manage the entire shipping process in multiple locations with centralized control and shared visibility of the activity of individuals. Managers can establish company shipping guidelines, accurately track shipping costs and produce detailed reports on usage for a specific location, department or individual. And since these systems are international, the user interface can utilize the language that each user speaks.
As we expand our enterprise globally, these systems will further evolve, so that a user will be able to ship to and from anywhere in the world, with the ability to translate languages and convert monetary systems, weights and carrier rate tables.
Shipping systems can reduce labor costs in an organizations shipping department as well as in accounting and customer service departments. They can improve cash flow and minimize costly errors. Perhaps even more importantly, shipping systems give shipping managers and staff more control of the shipping process and power to integrate shipping into a total business strategy, affecting everything from inventory control and profit margins to staffing levels and customer service benchmarks. In the next issue of Parcel, we will look at some of the advanced functionality of shipping systems and explore more benefits to be gained from this technology.
Mark Taylor, MBA, DLP, is the President of TAYLOR Systems Engineering Corporation and the Chief Logistics Officer of RedRoller, Inc., the worlds first free Internet-based shopping service for shipping that compares the rates and delivery options of multiple carriers. He has been featured as an industry expert on ABC News and in the New York Times and is the author of Computerized Shipping Systems: Increasing Profit & Productivity Through Technology.