With supply chains becoming ever tighter and order sizes becoming smaller, more companies are turning to parcel shipping in an effort to meet their customers' expectations at a price point they can afford. As a result, the parcel shipping industry has enjoyed double-digit growth for the past several years. 

Up until now, parcel shipping has not received the same level of scrutiny and optimization that the more traditional modes like LTL, TL, and rail have. In fact, despite its growing popularity, this mode of transportation has often been under the radar of professional logistics management. But not for much longer!

According to a recent survey by Aberdeen Consulting, twenty eight percent of the companies surveyed were planning on moving to a more effective solution in the form of a multi-carrier manifesting system. The reason for this level of interest is clear:  Parcel shipping can directly impact bottom line growth.

Companies using best-of-breed multi-carrier parcel manifesting solutions are able to save a great deal of money by automatically taking the lowest rate, choosing the correct level of priority for delivery, and consolidating shipments for zone skipping.  For example, after implementing such a system from Precision Software, Emerson Process was able to save 7.4 million Euros in just two and a half years by consolidating multiple parcel shipments going from the US to Europe into a single air shipment, then disaggregating them on arrival.

Along with these kinds of savings, companies multi-carrier solutions are able to serve their customers better with real-time rate quotes and status checks.  For companies shipping to markets outside their own borders, tier-one solutions already have denied party screening and international documentation capabilities built into the system.  Using such automated document preparation capabilities allowed Elizabeth Arden to cut overtime 25% for the group responsible for preparing international shipments, in spite of a 25% increase in shipping volume.

Cutting costs and improving performance in production shipping environments like Emerson and Elizabeth Arden is only part of the story.  There is another type of parcel user that is more likely to work in an office or research lab; the non-production or corporate shipper. 

Today, more and more companies are beginning to look at corporate shipping and ask themselves if there might be better ways to manage this often uncontrolled source of transportation spend. In fact, companies wishing to lower their TOTAL parcel shipping costs will want to ask themselves eight critical questions:

1.        Carrier selection:  Are you accessing the rate tables of multiple carriers so that each shipment is being made with the lowest-cost provider that will satisfy the needs of your customer?

2.        Priority:  Is the shipment being made at the appropriate level of priority?  Does it really need to be delivered overnight? 

3.        Consolidation:  Are multiple shipments to the same region being consolidated or are they being handled individually?

4.       Data entry:  Is any information that is already digitally available being manually keyed into any system?  Or, is the same information being manually entered more than once?

5.       Compliance:  Is the addressee of every shipment being checked for being on any denied party list?  Are all international documents being prepared automatically by the system?

6.        Auditing:  Is the amount actually charged by the parcel carriers being compared to the amount that was expected?  Are accessorial charges being checked to ensure that they are actually warranted?

7.       Availability:  Is the system available to every authorized employee across the company, regardless of location or position?

8.        Contract Management:  If you look across the company, including all the remote locations like sales offices, service centers, and research labs, how many parcel contracts are in effect?  Are you leveraging the rates that you were able to negotiate for your production shipments to cover your non-production shipments as well?

Lowering parcel shipping costs while increasing the level of service that you can offer your customer not only adds to bottom line growth but also puts you ahead of your competitors in this aggressive marketplace. It is time to look at where the dollars are going across the organization and realize the cost savings.

About the Author

Bill Petersen is VP of Business Development at Precision Software. He can be reached at

Bill.petersen@precisionsoftware.com  or by phone (361) 779 8195