There was a time when organizations could get by with one or two shipping options. That’s not the case today. Not only are you shipping more, you’re paying more for each piece. Rates from traditional carriers rose from five percent to 10% this year. Plus, shippers are increasingly being asked to absorb this increase. In some industries, customers may even expect you to pick up the full cost of shipping.
Now, more than ever, organizations need a smart, well-coordinated multi-carrier strategy.
Regional carriers can play an important role. While UPS, FedEx, and the United States Postal Service are often the default go-to carriers, regional carriers may provide you with options for better service or pricing in a particular geography. Some carriers co-mingle parcels and induct them directly into USPS destination facilities, which could lead to faster delivery and better tracking. You may be able to add greater flexibility to your shipping options, with more affordable next-day shipping. Others can help you introduce incentives, such as flat-rate shipping or free pick-up. In some cases, you could reduce your cost-per-parcel by as much as 40%.
Regional carriers, however, are not a cure-all. While all offer some advantages, there are many instances where the “big three” will perform better (and at lower costs). In order to increase profits and satisfy customers, you need to get better at managing multiple carriers.
The five essentials for multi-carrier success
Each carrier you add increases the complexity of your shipping operations. In order to excel in a multi-carrier environment, focus on building five core competencies:
01. Instant rate shopping
Success starts with your ability to calculate an exact cost. You’ll want to compare rates instantly, taking into consideration any fees or surcharges, so you can identify the best shipping option across all carriers.
02. Rules-based selection
Price is not the only factor. What level of service is required? Ground, 2-day, next-day, same-day? With the right system, you can set well-defined rules that dictate what level of service is appropriate for each shipment. You can even customize these rules based for specific users, departments, clients, or use-cases, so your shipping costs are always aligned with value.
03. Simplified processing
Each carrier has their own forms, rules, and requirements. Today, this can all be automated. Look for ways to generate labels and process parcels across multiple carriers, adding accuracy and efficiency at every step.
04. Total visibility
No one has time to toggle between different websites. With the right technology, you can view all of your shipments in one place, giving you the power to manage and track across multiple carriers.
05. Built-in communication
Lastly, you’ll want to keep customers informed at every step. Automated emails and client-portals can help keep customers in the loop, while reducing the number of phone calls you receive.
Once you have the ability to manage multiple carriers, you need to carefully assess which ones will add value to your business. Not all regional carriers are the same. Ask for details about their rates, fees, geographic reach, customer experience, and service levels. Dig deep to find out whether they are a serious player in the parcel shipping space. Technology can be a good indicator. When making a selection, look for:
· Strong transportation infrastructure
· Well-defined security and tracking procedures
· High level of automation
· Ability to rapidly respond to increase in volumes
· End-to-end track and trace
· Full visibility throughout the process
The right mix of carriers can provide several advantages when it comes to shipping. In addition to the big national players, you should establish a relationship with one or more regional carrier in order to satisfy customers in ways your competitors can’t. Before moving ahead, however, you should first assess your ability to manage multiple carriers. In today’s world, it takes a smart, coordinated strategy to succeed.
Chris Giles is Vice President, Business Development, Global Product Management, Pitney Bowes.