With all but essential stores closed in many parts of the country, e-commerce sales have increased, particularly for items people can use in their homes, such as games, sports and fitness equipment, and cooking and gardening tools. While carriers are providing an essential service ensuring these products make it to their final destinations, social distancing guidelines can make processing orders – and delivering them – more difficult. For example, a large percentage of commercial passenger flights are grounded, which means carriers no longer have air transport as a ready means of distribution. And in order to manage this high demand and limited capacity, many carriers have added surcharges to their services.
Controlling Parcel Shipping Costs in the Wake of Carrier Surcharges
Controlling transportation costs is important at any time, but at a time when capacity is tight and surcharges apply, it’s even more critical. A couple of examples where shippers and logistics service providers can achieve savings in parcel shipping during the pandemic:
While it’s unlikely shippers and logistics service providers can avoid surcharges altogether, many shipping solutions will enable “zone skipping” and consolidate parcels, using one carrier to move a consolidated shipment, and a local carrier for the last mile delivery–reducing total shipping spend. Additional benefit: by using zone skipping, parcels no longer have to travel to multiple sorting facilities to reach their final destination. Instead, shipments to local carriers are faster, which in turn creates quicker deliveries for customers.
Carrier Invoice Auditing and Business Intelligence
For shippers and logistics service providers shipping large parcel volumes, auditing carrier invoices is crucial. Mistakes can, and do, happen. For example, a carrier may bill for a service level promised, but not received, or a carrier may add an unexpected accessorial. These errors can have a surprising impact on the bottom line.
With the right technology, shippers and logistics service providers can automate carrier invoice auditing. All transportation data, from carrier contracts… to delivery events… to carrier invoices, is captured and normalized in one system, and discrepancies between expected costs and carrier invoices are flagged–giving shippers and logistics service providers greater control over their transportation spend.
Furthermore, carrier invoice auditing provides shippers and logistics service providers with an overview of invoiced carrier costs versus carrier agreements, enabling them to ensure their carrier procurement is aligned with strategy and verifying they’re receiving the delivery outcomes for which they’ve paid. Sophisticated software will also include Business Intelligence to model and compare selected carrier services against actual carrier performance to find routing alternatives with lower cost implications and/or faster delivery times. Business Intelligence can also reveal even more advanced optimization strategies, such as effective ways to position facilities and inventory around the globe.
Satisfy Customers at the Lowest Cost
While there is no “one size fits all” approach to shipping, with the right approach and technology shippers and logistics service providers can counteract surcharges by identifying and acting upon opportunities to ship efficiently and satisfy customers at the lowest cost.
Ken Fleming is president of Logistyx Technologies, the leader in Transportation Management for parcels. Since the mid-1990s, Ken has led successful launches of many new technologies and services, including supply chain management, e-commerce, SaaS, and enterprise software and systems integration solutions. Ken can be reached at firstname.lastname@example.org