If you feel like the shipping landscape is shifting under your feet, you are not alone. As I mentioned in my last article, the rules of the game have changed. The foundation of an effective shipping program – signing a good contract, factoring rate increases into your budget, and negotiating exceptions, no longer suffices.
Nor does the relationship with your carrier built over decades hold the same weight. Is it important? Yes. But is it enough to address all of your shipping needs now?Probably not.
Perhaps the most noteworthy change is that the decision to work with more than one carrier is no longer an elective one for most shippers. While it can be argued that an optimal program always required the flexibility of working with different partners, many shippers could get by with just one and for years that’s exactly what most did.
That contrasts starkly with the shipping landscape we are living in today, where working with one carrier is rarely a realistic option. But that's not where the changes end. A multi-carrier approach in and of itself is also not sufficient.What is needed is a trueomnicarrier approach.
Why omnicarrier and not just multi-carrier? Multi-carrier means a shipper uses more than one carrier, but each carrier is typically managed on its own, not only with separate contracts, but also invoice processes, portals, and reports – silos that make true comparisons hard.
Omnicarrier goes a step further: every carrier and mode in the network is managed as one connected system, with shared data and decisions made at the package level across all of them. It’s the same distinction as multichannel versus omnichannel retail. Multi-carrier is about having options; omnicarrier is about using them together to choose the best carrier for every shipment based on cost and service.
This integrated approach makes it more important to keep several considerations in mind:
●The ability to manage complexity is crucial: As major carriers increasingly move to grow revenue-per-package not with general rate increases but instead through constantly changing accessorial charges unveiled with no warning, working with even one carrier is more complex than ever. And working with numerous carriers in an integrated way is exponentially more so. The ability to monitor volume discount tiers, avoid blind spots, normalize the unique vernacular each carrier has for similar products and charges, and effectively use data is crucial.
●Success begins with modeling the ideal carrier network: Creating the right carrier network was never a cookie-cutter endeavor, but the level of detail and importance of getting it right has never been greater. The good news is that there are more shipping options available now than ever, among them competitive regional players eager for business.
●The lines between modes are blurring: As carriers move to price packages they no longer want out of their networks – often overtly – shippers must in turn look at when and where new approaches make sense to keep costs in check, among them LTL and FTL deliveries within their own distribution networks.
●Fundamental mistakes are more consequential: A majority, nearly 75%, of shippers fail to claim rebates owed to them because carriers failed to meet their own service level guarantees. With increased cost pressures such longstanding weak points are even impactful. Audits are a prime example. Retrospective audits are more difficult to manage when working with numerous carriers. In today’s more complex environment, an automated claims process with continual audits is crucial.
These considerations are merely part of the thought process that should go into creating an effective omnicarrier program. More than ever shippers must come to the challenge intent to plan, manage and govern their shipping operations with confidence, speed, accuracy and agility.
Josh Dunham is the co-founder and CEO of Reveel, known for its Shipping Intelligence Platform. Josh leads the company's corporate strategy and vision. He directly oversees the technology and operations departments. Under his guidance, Reveel successfully acquired a technology partner and is now the industry leader in machine learning technology.
