eCommerce Shippers Need New Solutions

In my conversations with industry pros, there was a disagreement about whether there was much of any growth in the use of parcel software in most industries. But there was no disagreement that ecommerce and omni-channel initiatives were leading to a double digit growth in sales of multicarrier software to retailers. Ecommerce was also leading to increased usage of parcel software by consumer goods companies who were engaged in drop shipping their products directly to a retailer’s customer to fulfill an order on behalf of that retailer. The demands of eCommerce have also given rise to some new features and functions in parcel software solutions.

In a recent article, the traditional functionality associated with parcel software solutions was explained.  Parcel solutions aimed at supporting ecommerce have a more extensive set of features and functions.


There has been a distinction between parcel solutions for office shipping, and larger, more robust solutions that support production shipping – shipping parcels out of a warehouse in volume. The office solutions were frequently cloud-based SaaS solutions, the production shipping solutions, which needed to be able to print labels very quickly at many ecommerce warehouses, were often on-premise solutions. The largest parcel software suppliers focused on production shipping solutions. The ecommerce boom has led several parcel software suppliers to develop hybrid delivery mechanisms – on premise or cloud-based, or even some combination of the two, depending upon a retailer’s shipping volumes.

Traditional high volume multicarrier solutions can print compliant labels for over 50 parcel and LTL carriers. But multicarrier solutions that want to support the distinctive needs of ecommerce shippers need to support more carriers. Both the Descartes Systems Group and MetaPack support the label compliance requirements of over 300 carriers. According to Kees de Vos, the Chief Product and Marketing Officer at MetaPack, their solution has a library of carrier services that encompasses 400 carriers and 4000 carrier services.  While many multicarrier solutions have been regional in their focus, retail solutions need to support international shipments, which means compliance support for many more carriers.

But in ecommerce there are also a lot of Moms and Pops shipping EBay style orders from their garage. A higher percentage of revenues from the ecommerce segment of this software market come from very small shippers. And the compliance coverage on the small ecommerce shipper side of the market is much thinner than what we see in parcel solutions for other industries.’s main parcel solution, for example, allows for very small shippers to print postage and compliant labels solely for the United States Postage Service.

The integration is also different for retail solutions. Traditional production volume multicarrier solutions integrate to warehouse management and transportation management solutions. Retail parcel solutions also integrate to Internet commerce platforms. According to Carl Hartmann, the CEO at Temando, “consumer expectations are higher than what most retailers are delivering. Ecommerce cart abandonment runs 60-80% for many retailers, with poor fulfillment options being a primary driver for these unconsummated sales.” According to their survey, poor fulfillment performance occurs in two ways.  First, the total cost of the product, inclusive of fulfillment costs, ends up being much higher than what the consumer expected.  Secondly, many retailers do not offer enough different delivery options, next day shipping, pick up a locker, etc.  Helping a consumer understand the total landed costs requires tight integration to Internet commerce platforms.

But when it comes to international ecommerce shipments, for consumers to understand the full landed cost, the solution must also include the costs of tariffs. The Temando solution offers duties logic and Precision Software is an example of a software company that sells both a multicarrier software solution and trade compliance software. Robert Clesi, the VP of Marketing & Partners at Precision Software made the point that they are the only solution provider that offers global shipment execution, trade management, shipment visibility & exception management, and trade compliance capabilities on one integrated platform. Mr. Clesi echoed the point made earlier in this article that when you ship internationally, you need to support a wider variety of regional carriers. But he added that the compliance issues go beyond carrier labeling requirement to include “numerous documents that are required, the correct tariff codes identifying products, the need to work with a broker or the ability to self-file the customs documents, and a system to make certain the people you ship to are not on the government denied party lists.”

Zone Skipping is a feature that is supported by robust multicarrier solutions. In zone skipping, a shipper consolidates many individual packages or orders into full truckload shipments. In some cases LTL works, too. These packages are sent en masse from one zone to another. For example, Atlanta is in Zone 2 and Los Angeles is in Zone 8. Shipping directly from Zone 2 to a Zone 8 parcel carriers sorting facility can lead to substantial savings for a shipper. But Ken Wood, the Executive Vice President of Product Management at the Descartes, points out that the ability to consolidate for zone skipping depends on whether retailers have both enough time and enough volume, something many lack.

Retail parcel software solutions also offer some different workflows that are not supported by traditional multicarrier solutions. But these cannot be described easily or quickly, so I will describe this interesting functionality in a future article.

ARC has recently published a global market study on the transportation execution market, which includes parcel solutions. We have also published a supplier selection guide for Multicarrier Systems to help companies make informed decisions when in the midst of supplier selection.

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