Demand for e-commerce and omnichannel fulfillment continues to grow. According to Digital Commerce 360, U.S. e-commerce sales increased again in 2021, up 14% year-over-year (YoY), and by more than 50% compared to 2019.
Many top retailers rolled out more versatile fulfillment to better serve customers, embracing gig economy couriers to offer same-day and two-hour delivery and rounding out omnichannel fulfillment offerings with buy online pickup in store (BOPIS) and related services. Retailers also took steps to contain costs and preserve margins as they reoriented toward e-commerce like never before, including putting solutions in place to more effectively navigate carrier capacity caps and improve the visibility, accessibility, and mobility of inventory.
Multi-carrier parcel shipping technology empowers fulfillment teams
Multi-carrier parcel shipping technology gives merchants the functionality they need to roll out these offerings and better serve customers. It helps retailers not just understand but also take control of inventory flow within and across stores, warehouses, and distribution centers and expand carrier networks with access to a wide range of national, regional, and alternative carrier services. It allows them to identify the right carrier service and optimal point of origin for every parcel delivery, seize the best opportunities to cut costs and scale shipping strategies, offset carrier capacity constraints and capacity-based surcharges, reduce costs with bulk shipping, improve returns processes, and more.
Multi-carrier parcel shipping solutions will also increase parcel delivery visibility, empowering merchants to hold carriers accountable to contracted services and timelines. Business intelligence tools can use this visibility and other information to help shippers act more strategically by procuring the most efficient, cost-effective carrier services. In certain scenarios, cheaper carrier services may be more than adequate; some shippers have determined, for example, certain regions in which ground shipping provides a perfectly acceptable and more affordable alternative to two-day or next-day services.
More to give the organization
Other departments also have strategic insights to gain by tapping into what multi-carrier parcel shipping technology can provide.
As growth strategists plan to expand a retail footprint or add a distribution center or two, parcel shipping data can provide valuable insights to either direct or double-check these efforts. What an organization knows about its customers based on troves of parcel shipping and e-commerce fulfillment data can strengthen confidence in these plans and ensure investments pan out by more accurately forecasting the value of new stores, warehouses, and distribution centers.
Merchandising can also tap into fulfillment data to function more effectively by checking inventory strategies against parcel shipping data to ensure the right product mix is in the right locations. Based on regional differences in demand and other factors, shipping data can inform decisions about where to house inventory, how much to have on hand, etc.
Meet the basic needs
Despite all that multi-carrier parcel shipping technology has to offer merchants, organizations need to nurture the technology. A symbiotic relationship, in which the organization methodically shares critically important information with the technology, ensures the software will continually deliver maximum value and optimal results.
Fulfillment teams should work to ensure the technology stays current by maintaining the integrations with other technology in the organization’s supply chain technology stack. These integrations allow order fulfillment teams to optimize the entire order fulfillment workflow and perform other important functions. Critical insights gleaned from business intelligence also need to be incorporated back into the system. For example, when an organization determines ground shipping can adequately replace two-day delivery in a certain radius, fulfillment teams can write a business rule in the multi-carrier parcel shipping technology that accounts for this information. The technology also needs to know which fulfillment options are available for each shipment; this includes every carrier service as well as BOPIS, buy online pick up curbside, and ship from store options.
Procurement teams play an incredibly important role. Problems can arise when procurement teams negotiate carrier rates but fail to share rate updates with fulfillment teams. Everything may seem just fine to the procurement team when the negotiated rate matches the billed rate on a carrier invoice, but if refreshed rates were never input into the multi-carrier shipping technology, then the technology makes decisions based on incorrect information. This can lead to poor carrier service selection and damage the bottom line. Beyond rates, procurement should also be sure to share carrier capacity limits; location variables for warehouses, distribution centers, and stores; and other pricing factors. Keeping this information updated in the multi-carrier parcel shipping technology ensures decisions are made based on correct, up-to-date information for optimal results.
Snowball effect can be good or bad
When organizations commit to maintaining multi-carrier parcel shipping technology, they ensure ongoing benefits for the organization because the best decisions get made and reliable insights can be extracted. The organization becomes more profitable and more likely to please customers; procurement becomes better positioned for future negotiations; and inventory planners get new and consistently accurate insights.
When shippers fail to update the technology, however, information gets more and more outdated and decision-making and losses worsen over time.
Either way, a snowball effect may emerge. Organizations that understand the value of multi-carrier shipping technology and invest in it to be more successful need to protect these investments by making sure the organization gives critical updates back to the technology.
Ken Fleming is president of Logistyx Technologies, now part of E2open and the leader in multi-carrier parcel shipping technology. 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 ken.fleming@logistyx.com.
