There are hundreds of thousands of 3rd party and carrier-provided shipping systems in circulation like label-printing cash registers cha-chinging in warehouses all over the world. Many shippers have more than one, each one representing a silo of valuable information that could provide valuable insight into potential performance improvements and cost-saving opportunities for parcel execution.
Sadly, even as shipping costs are increasing at more than twice the rate of inflation, all of this data is locked up and seldom mined by shippers to their advantage. Isn’t it time to take a closer look at your shipping data? You had better answer yes if you expect to protect your margins.
Are Carrier-Provided Systems Foxes in the Hen House?
For more than 20 years, the point has repeatedly been made that “free” carrier-provided systems aren’t really free. They come at a cost that can be measured in terms of lost opportunities to compare competitive carrier services, constrain the use of premium services, and measure carrier performance. Shippers’ interests in controlling costs don’t always align with the carrier’s interest in driving more profitable volumes at any cost.
With Big Data and predictive analytics automating intelligent business decisions, controlling processes at the point of execution is important. Even more important is leveraging the data at the point of execution to improve financial performance and your customer’s delivery experience.
That’s not easy because carriers believe that the data generated by their shipping system belongs to them. For example, UPS license agreements specify that they own UPS Materials, which includes information generated in connection with “You shipping with UPS.” There is a legal argument that you can’t use the data to your advantage because you don’t own it. Overreaching? Maybe. After all, you did get to use a free system to create carrier labels.
Are Multi-Carrier Shipping Systems Doing You Any Big Data Favors?
Unlike the once highly regulated freight industry, parcel carriers all define proprietary rules for rating, labeling, shipping, and tracking in their own terms.
Normalizing disparate compliance standards and automating data collection for the purposes of carrier billing, and not transportation cost savings, have always been the core functions of multi-carrier shipping systems. Few businesses actually “rate shop” at the point of label production. Those decisions are made upstream and often without the benefit of cost-effective decision support. Just as cash registers focus on checkout efficiency but don’t provide insight into grocery store margins, so too do shipping systems rarely go beyond transactional reporting (costs summarized by carrier, cost centers, and workstation activity). That has left shippers at a disadvantage when it comes to negotiation with carriers who do have a holistic view of shipper data.
Cost Savings Require an Enterprise Approach to Shipping Data
E-commerce is coming down to “my supply chain vs. your supply chain”. Businesses are implementing innovative omni-channel shipping strategies as a way of controlling the cost of free shipping without compromising consumer expectations for faster and more convenient delivery. Drop shipping, ship from store, same-day shipping, and pickup location services are all adding to the complexity of parcel carrier management.
That’s why it takes an enterprise effort to control transportation planning and execution at every point in your organization. If point solutions are your only source of information, the less likely you are to have an enterprise view of costs and how they are incurred.
What is called for is an enterprise approach to parcel transportation management systems (TMS). With a parcel TMS system in place, you have the opportunity to collect all the data you need across the extended enterprise and make the right decisions, every time.
Learn four more ways beyond analytics that can help you better control parcel shipping costs.
Bob Malley is CEO of Pierbridge, Inc. with many years of experience in the TMS software industry. He founded Tracer Research Inc. in 1989, where he launched Clippership, a leading parcel carrier management software product. In 1998, Tracer was acquired by Kewill Systems Plc. Bob was appointed President of the eCommerce division, served as a Board Director, and was later promoted to CEO. Bob left Kewill and joined Pierbridge as a Board Member in the fall of 2002 and then as CEO in 2004.