parcel Archives

Editor’s Choice: 10 Reasons to Implement a Cloud Multi-Carrier Parcel Management System

Transportation | By Chris Cunnane • 03/18/2021

Note: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice. Today’s article is from Logistyx Technologies, and highlights some of the reasons a company would want to implement a cloud multi-carrier parcel management system.

Not too long ago, if you were implementing a Transportation Management System for parcel shipping, also known as a multi-carrier parcel management system, you had to buy the software and install it on premise. Today, this has changed. Sophisticated multi-carrier parcel management systems are in the cloud, and adoption rates are increasing not only within large, global enterprises, but within small to mid-sized organizations as well.

Why the sudden increase in popularity? Here are 10 reasons:

Low Barriers to Entry: A cloud system eliminates expensive, upfront installation-related expenditures associated with hardware and software, enabling any size organization to utilize the technology. Instead, with a cloud multi-carrier parcel management system, shippers pay subscription or usage fees.
Easy Enhancements: The cloud multi-carrier parcel management software provider is responsible for solution upgrades and enhancements, including application maintenance, and most application upgrades can be deployed automatically, eliminating the need for internal IT resources.
Connectivity: These systems connect the shipper to carriers and supply chain software providers The right system will enable the shipper or logistics service provider to meet the customer’s shipping requirements from within the multi-carrier parcel management system, and there should be no limit to how many carrier service integrations the system can manage. The system will automatically determine the carrier that can provide the best rates to a particular region and according to the shipper’s business rules, ensuring every shipment is in compliance with each carrier’s labeling and communication standards, as well as with any applicable trade regulations. This provides shippers and logistics service providers with the agility to quickly onboard new carriers or carrier services in the event of a supply chain disruption and provide them with the flexibility they need to accommodate increasing shipping volumes, manage new or unexpected shipment origins and destinations, and meet customer delivery expectations.

Click HERE to read the full article.

Editor’s Choice: What Early Holiday Shopping Means for Parcel Shipping

Retail | By Chris Cunnane • 11/05/2020

Regardless of whether consumers and retailers are ready, holiday shopping – and shipping – season is here! With carriers announcing capacity shortages and major headlines advertising “Shipageddon,” consumers have been encouraged to start shopping for the holidays NOW. While this elongated holiday shopping season can certainly create new revenue opportunities for retailers, retailers can only capitalize on the opportunity if their parcel shipping operations are prepared to execute.

Although the holidays have always been considered “peak season” for parcel shipping, this year’s unparalleled e-commerce growth has redefined and intensified that reality. Businesses relying on parcel shipping must prepare for a capacity crunch and delivery setbacks (nicknamed the “Nightmare on Parcel Street”) as FedEx and UPS capacity for the holidays is filled. ShipMatrix projects as many as seven million packages per day could be outside of maximum capacity for these two leading carriers’ parcel delivery services, and even regional and last mile carriers OnTrac, LaserShip, and Speedee Delivery have reached capacity heading into peak season.

Despite Amazon moving its Prime Day event from July to October, Amazon Prime Day has remained a catalyst for competitors such as Target, Walmart, and Best Buy to launch their own offers. This year, however, these offers aren’t only available for a “limited time.” Rather than halt promotions after Amazon Prime Day and relaunch the offers closer to Thanksgiving, many retailers opted not to hit pause on their holiday sales. For example, Target is offering “Black Friday pricing all November” and Home Depot is making special offers available until the end of the year. The hope is to spread demand to prevent further strains on supply chains by encouraging consumers to shop earlier and avoid crowds and delivery delays. In addition, many carriers have encouraged retailers to run these types of sales events to increase the chances of deliveries reaching customers on time.

Extended discount periods aren’t the only changes we’ll see this holiday season. We’re also likely to witness a dramatic shift in consumer wish lists – pivoting from luxury goods to practical purchases such as home goods, office supplies, and outdoor equipment. For example, coats and fire pits are finding their way onto many letters to Santa, as they enable friends and family to gather outside in cold temperatures while respecting social distancing guidelines.

Click HERE to read the full article.

5 Challenges Retailers Face This Holiday Shopping Season

Guest Commentary | By Erin Allwardt • 10/20/2020

My to-do list has included one incomplete item since mid-September, one glaring blank spot where a big green checkmark belongs. That to-do item is “Start Christmas shopping.” Typically, my efforts toward buying holiday gifts for friends and family begin near the end of November, coinciding with the American Thanksgiving holiday. Rarely have I attended a Black Friday event on the day, but the commercials and promotions really get me into the holiday shopping mood. This year, I know it’s imperative to start shopping earlier. Why? Because I plan to do 100% of my holiday shopping online – were I will play a small part in a larger shift in consumer behavior. For years, we have seen growth in the digital channel outpace growth in-store. Because of the current global pandemic, there is even more emphasis on online shopping. How will this channel-shift during the busiest shopping season of the year affect and add to the complexity of retail supply chains and how can retail supply chains adapt? There are five key challenges for retailers to overcome this holiday season.

In many regions, indoor shopping hasn’t returned to pre-pandemic foot-traffic levels. This is partly due to max occupancy and social distancing restrictions. Plus, younger generations have quickly adopted in-app shopping, online browsing and ordering, and shopping through social media platforms. But also there appears to have been a shift in preferences in many of those who, pre-COVID, preferred an in-store shopping experience and generally resisted shopping online. Since March, circumstances have forced the holdouts to download apps and use online shopping to acquire food and general merchandise. Those same people are now old pros at using the interwebs for making their weekly grocery purchases. This group is now more likely than ever to also consider online holiday shopping. According to the U.S. Census Bureau, e-commerce spend in the second quarter grew 30% over Q1 this year. We expect to see the highest percentage of online shopping this season, and retail supply chains are not prepared.

The first retail industry challenge we will see is insufficient capacity in outbound distribution to customers. Many retailers have separate supply chains for store fulfillment and e‑commerce fulfillment, and as demand shifts the balance from the former to the latter, the supply chain must adapt. Fulfilling e-commerce orders can be expensive, especially when labor and capacity has been budgeted to include a lower volume than what will be seen this year. Distribution center handling; individual order picking and packing for parcel shipment; and capacity of parcel shippers will be greatly taxed, whereas FTL and LTL movements between DCs and stores will be underutilized. Many retailers have set contracts with third-party providers for warehousing and delivering orders to stores and e-commerce customers. As more volume goes through parcel shipping, bottlenecks will arise within parcel processing and delivery. Shipping to customers will take longer, and estimating arrival dates will become more difficult.

The second challenge will occur in reverse logistics. Retailers typically expect returns after the holiday, given many people will receive gifts that they don’t love. And online shopping has always included a higher-than-average return to purchase ratio. But this year, retailers must consider the potential for a spike in returns prior to the holiday and will have to strategize on how to get those returns back into the available stock to be purchased by another customer. The option to buy multiple sizes and colors of an item to try on at home has become more popular with the e-commerce customer. In this scenario, it’s highly unlikely all items will be kept, and potentially all of the items could be returned. This becomes very costly to retailers. This year, because of the inability to view and compare items in-store, the percentage of returns prior to the giving holiday will likely be higher. Retailers often use third-party services to manage returns of digitally purchased products. Unfortunately, it takes time for that product to return to stock and become available for the next person to purchase and some product never returns to full-price stock.

A third challenge is rapidly shifting consumer preferences. This could wreak havoc on pre-planned product mix decisions. In March, the golden products were toilet paper and hand sanitizer, while now it is difficult to procure kettlebells, bikes and puzzles. There will be a continued focus on at-home entertainment and solo exercise options on holiday gift shopping lists this year. Many retailers have not yet caught up on these demands and definitely didn’t anticipate the need for this product mix when doing the planning and sourcing of goods for the 2020 holiday season. Retailers will continue to have shortages of in-demand products and overages of products previously forecasted to be the “big hit” this year.

The fourth challenge: Retailers face varying labor requirements as they flex to meet demand changes and introduce new delivery methods. BOPIS (buy online, pick up in-store), curbside pickup, home delivery, and e-commerce shipping each require different processes – and also require specifically trained personnel. Retailers need to pivot to having fewer in-store sales associates and more back room, DC and delivery support.

Lastly, retailers are challenged by promotion schedules and targeted marketing campaigns that came up short on their goal to move unsold past-season merchandise. No one could have anticipated the dive retail sales would take during the first six months of 2020, and many retailers are hard pressed to entice customers to buy current inventory to make way for the new in-transit inventory. Promotions focused on moving aging inventory are coupled with efforts to get customers to start shopping now to reduce the strain on the supply chain leading up to the last few weeks of December. For example, Amazon Prime Day was strategically delayed until October 13–14 this year. This was likely intended to tempt customers to start their holiday buying earlier to reduce the strain on a supply chain already pushed to its limits. Two to three times a week, Anthropologie sends a “40% off sale” email; normally Urban Outfitters could count on me for no less than a click through, but not this year. What typically works to move product doesn’t seem to be having the same effect during the pandemic.

What can retailers do to face these challenges?

First, retailers should track consumer actions in real time to feed their decision models. Especially this year, historical information will not be as helpful when trying to predict future demand patterns. Instead, use new data to understand and detect changing consumer sentiment and purchasing and to then adapt quickly – securing new suppliers, determining the right modes of transportation and adjusting labor plans to fulfill demand. Second, optimize inventory across the network to make sure the right inventory is in the right nodes to serve customers. Retailers may also consider turning some closed retail locations into “dark stores” to act as local hubs for quick deliveries or convenient customer pick-up locations. Whole Foods has been exploring the potential of dark stores and recently opened a new mini-DC in Brooklyn to get closer to demand. Lastly and most importantly, retailers need to create and maintain a “digital twin” of their supply chain, one that allows them to test competing scenarios and better understand what will happen if some of these current trends continue post-pandemic. Setting up a decision data model to enable AI and advanced optimization algorithms and simulation solvers to identify, detect and optimize the supply chain is no longer a differentiator, now it’s what retailers need to do to stay in business. While the immediate goal of retailers is getting through the holiday season and back to “normal,” the longer-term goal should be a built-in supply chain resiliency that allows retailers to adapt to potentially permanent pandemic-driven shifts in consumer behavior and to, more generally, an ever-changing retail environment.

Erin Allwardt is a Principal Solution Designer at LLamasoft and has been solving challenges for many Fortune 500 retail and food and beverage customers with complex global supply chain networks. Erin has an extensive background in logistics with a global 3PL and earned her International MBA in Global Supply Chain and Operations. Erin is an active leader on LLamasoft’s Risk Task Force, in the Supply Chain Risk Management Consortium, on CSCMP and in RILA.

Tech Integration Keeps Shippers in Step with Customers

Business Intelligence | By Ken Fleming • 10/08/2020

The exponential growth of e-commerce in 2020 has brought peak-like levels of order volume for many retailers since as early as March. Looking to the quickly approaching actual peak season, volumes are predicted to hit unprecedented levels, and carriers have been warning shippers for months to expect capacity crunches, increased surcharges/fees and other challenges.

Shippers must overcome these challenges without sacrificing customer service, competitive pricing or margins to be successful and satisfy consumers, who still expect free shipping, fast delivery and full transparency. For many, that means getting more agile by expanding fulfillment and customer service capabilities so they can prepare in different ways, better manage partners and contain rising costs without sacrificing performance. How quickly and easily this can be achieved depends largely on how well a shipper’s mission-critical fulfillment technologies have been integrated to work cooperatively.

Preparedness Varies Greatly

Shippers using standalone systems in their supply chains, warehouses and fulfillment efforts will encounter more challenges than their autonomous warehouse and omnichannel competitors. Without connected systems working as one, shippers inevitably incur more costs and need more manual labor to fulfill orders. Lacking the inventory visibility and other controls afforded by integrated systems, these shippers cannot deliver the same level of customer service as their high-functioning and more agile competitors.

On the other end of the spectrum, fully-integrated technologies make it possible for shippers to provide inventory visibility and controls throughout the organization and quickly augment their capabilities with specialty software. Totally autonomous shippers offer a great example of the power of fully-integrated technologies. Often referred to as lights-out (Europe) or black-box (U.S.) fulfillment, these merchants require little or no human involvement to deliver hundreds of thousands of parcels daily from a single distribution center. Omnichannel retailers also make great use of fully-integrated technologies by deploying ship-from-store, buy-online-pick-up-in-store (BOPIS) and other innovative fulfillment strategies.

In each of these examples, merchants rely on a designated system of record functioning as a central nervous system that unites otherwise disparate technologies and shares critical information throughout the organization. With this type of system in place, merchants enjoy big advantages when needs change and new challenges arise. They need not adjust operational processes and resources; instead, they can quickly add new specialty software solutions and technologies to address new requirements.

Easy Tech Integration with Containerization

While different types of technologies can serve as a system of record, each merchant must choose the one that makes the most sense based on its own unique needs, and these systems increasingly embrace containerization to make it easy for shippers to augment their capabilities by quickly adding specialty cloud-based software. Warehouse management systems (WMS), order management systems (OMS) and other types of technologies most commonly designated as a merchant’s “system of record” increasingly come ready to integrate with specialty software to support a wide range of fulfillment capabilities, including:

Fleet monitoring
Counting inventory
Monitoring supply chain workflow
Category management
Merchandise operations
Managing locations
Multi-carrier rate shopping
Parcel shipping
Fulfillment tracking

Consider Interoperability

Whether a shipper already has a system of record in place or needs to work toward this goal, they should keep two considerations top of mind:

The interoperability of all mission-critical technologies
The fundamental requirement of transactional data exchange

Shippers with a system of record already in place can quickly augment fulfillment, customer service and other critical capabilities with specialty software, but they should ensure compatibility with their existing system of record whenever possible. Fully autonomous, omnichannel and other merchants with an integrated system of record can keep fulfillment efforts on track without missing a beat as they add specialty software to expand capabilities so long as they ensure interoperability. When maintaining a unified fulfillment operation, ensuring the compatibility of specialty cloud-based software being added saves money and, more importantly with peak season looming, time.

Merchants not yet leveraging a system of record that fully integrates with a wide range of specialty software have a lot to gain by putting the right system of record in place to unify disparate technologies and software to ensure a cohesive and orderly overall approach to order fulfillment and customer service, but the right system of record varies. To select the best system of record to meet its unique needs, each business should weigh the value and consider the pros and cons of all viable options. They can start by answering three questions:

Which option will best mesh with mission-critical specialty software already in use by the organization?
Do restrictions or requirements of ownership or parent companies limit the available options?
How many manual integrations will each potential system of record require to work with all mission-critical specialty software, and what data exchange processes are supported?

Any systems not yet supporting transactional data exchange and still relying on batch data exchange should be eliminated from consideration. Even if they can be leveraged to fully automate a warehouse, systems that rely on batch data sharing leave many benefits unrealized. Insisting on the ability to exchange transactional data in real-time across the organization via fully-integrated systems provides merchants with a wealth of benefits that reach well beyond the warehouse.

Beyond the Warehouse: Other Benefits of Integration

When organizations insist on near-real-time transactional data exchange, they unlock next-level benefits that extend far beyond an automated warehouse. Customer service, financial and inventory management initiatives can all benefit greatly by accessing these integrated systems.

Integrated systems and transactional data allow organizations to deliver superior customer service with less manual intervention and cost. On the self-service front, customers can help themselves to real-time order status updates. When customers contact customer service teams, they too will be better cared for, because customer service teams can access the same real-time information repositories on behalf of customers and offer greater problem resolution strategies.

When payments and other financial details tied to a customer or their orders are available to those with a need to know throughout the organization, this too improves customer service, but financial initiatives and departments also benefit directly from these integrated systems exchanging real-time transactional data. Integrating all mission-critical software that houses financial data into a unified system of record protects cost data, for example, and this can be a huge benefit for shippers sending even thousands of orders/day, let alone hundreds of thousands.

Consider the costs associated with losing financial data tied to just 10,000 shipments. This necessitates a lot of manual work and human intervention. A specialized solution like a transportation management system (TMS) for parcel shipping, when integrated with a WMS, OMS or other system of record, can solve this problem and save thousands of labor hours by mapping all deliveries back to cost center codes, accounting codes, carrier reference data and more if all systems are integrated and sharing data with each other in real time.

Inventory management also benefits from integration and real-time data exchange. Without integration, most of an organization lacks inventory visibility and cannot see what is housed where. This makes it impossible to implement an omnichannel strategy and places customers out of reach. With proper integration and real-time data exchange, merchants can better serve customers with ship-from-store, BOPIS, in-store returns and other omnichannel fulfillment offerings.

Extend Standards throughout the Organization

Merchants should be sure to coordinate technology implementations throughout the entire organization. Whether at use in stores, the warehouse or other distribution centers, shared technology implementation standards reduce chaos and errors and make the many benefits of an integrated system of record possible. Organizations should coordinate with their procurement and purchasing departments to put approval processes in place to help control technology adoption and meet all standards throughout the entire organization.

Totally autonomous shippers, omnichannel retailers and other shippers with a unified system of record can quickly and efficiently augment their fulfillment capabilities with modern specialty cloud-based software to meet rising customer demands and boost profitability. Making careful choices; insisting on real-time information exchange; and requiring reliable, practical, organization-wide standards will simplify the effort and greatly increase the odds of not only automating fulfillment but delivering a wide range of organizational benefits that help merchants meet and exceed customer expectations.

Ken Fleming is president of Logistyx Technologies, the leader in Transportation Management for parcel shipping. 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.

Determining the ROI of a Parcel TMS

Guest Commentary | By Ken Fleming • 07/18/2019

Interest in adding a TMS for parcel continues to rise among shippers as the multifaceted ROI of a parcel TMS becomes better understood. While a TMS for parcel can help shippers better manage rapid increases in parcel volume, it can also help manufacturers and other new parcel shippers instantly adapt to provide excellent customer service in a profitable way. No longer just about saving dollars, more shippers have begun to realize they can provide improved proactive customer service via rapid delivery and shipment status transparency when they use the right parcel TMS.

While a parcel TMS can transform a shipper’s operations and provide multi-faceted gains, how a shipper implements the technology impacts just how well the investment will pay off and can be forecasted in advance. Shippers with a firm understanding of the status quo can forecast the impact of potential changes, but they should always ask two preliminary questions before getting started:

Do the benefits offered by a parcel TMS outweigh its total cost of ownership?
Can adoption of a parcel TMS deliver ROI during each stage of its rollout?

Creating suitable business objectives

Of course, questions about cost of ownership and ROI require suitable, measurable and meaningful business objectives to be in place. A TMS for parcel can deliver solid returns against a variety of business objectives, but objectives should be meaningful to the shipper and the challenges it seeks to overcome. Some of the most common business objectives shippers seek to accomplish by adopting a TMS for parcel include:

Offering cost effective next-day delivery service to customers
Getting the best rate every time they ship a parcel
Ensuring they select the most appropriate carrier and service for every parcel, based on the shipment’s needs
Providing delivery status transparency to customers

Depending on the business objectives in place, shippers should forecast the ROI of various if/then scenarios before using a parcel TMS to make sweeping changes to fulfillment and operations or even choosing the right solution.

Single-carrier shippers should forecast multiple cost scenarios

In some cases, big gains can be achieved just by switching from one exclusive carrier arrangement to another. Shippers should analyze a representative sample of their actual shipping data to determine how different carriers would have handled the same shipments and extrapolate these findings to determine the most cost-effective single carrier. Analysis should include the shipper’s current carrier and several other top options specific to the business.

Others test the potential of a multi-carrier approach to achieve more sweeping gains. The same general approach can be used to study a representative sample and extrapolate those findings, but the if/then scenarios to be forecast must account for the increased complexity of selecting the best carrier and service for each parcel. Compound Annual Growth Rate (CAGR) reports prove helpful in this process by demonstrating potential savings a multi-carrier solution can provide in rate and carrier selection vs. the way this works today.

To forecast the potential cost savings of a multi-carrier approach with a representative sample of parcel shipment data via CAGR reports, a shipper needs:

A starting point that reflects the status quo with data on the actual deliveries, chosen carrier and service, costs, and a map with associated parcel destinations
Various scenarios to test to determine if more elaborate multi-carrier parcel delivery strategies can deliver far greater returns

Common examples of the many viable scenarios that can be tested during these exercises include:

Adding a second carrier or carrier service
Adding two or more carriers and multiple carrier services

Just by selecting from the standard services of three carriers instead of one, the shipper reduced their parcel fees by 24% without sacrificing service.

Supporting business objectives with efficient carrier and service selection

Of course, any multi-carrier scenario worth testing should be developed specifically with business objectives in mind. If, for example, a shipper currently offers one-day shipping to all customers and fulfills these orders with an overnight service from Carrier A, its objective could be to maintain this level of service but to do so more cost effectively. In this example, the shipper should work to forecast at least a few scenarios to determine how each would affect parcel shipping costs:

Moving all this business from Carrier A to a different carrier
Using multiple carriers’ overnight services
Using multiple carriers and seeking strategic opportunities to use ground shipping services

In the last scenario, the right TMS for parcel can provide the essential data and insights a shipper needs to know the most cost-effective way to deliver each parcel from its distribution point to the customer within one day. Often, in this scenario, unnecessary carrier and service upgrades often lead to overspending; a ground shipping option that delivers in one day will perform just as well or better than a higher priced overnight option, for example. Identifying overlaps where carrier services can be downgraded without missing a beat on delivery at scale can produce big gains for parcel shippers, and they should be forecasting these gains before even getting started.

Accessorial fees: the low-hanging ROI of a parcel TMS

Addressing accessorial fees can deliver instant and significant savings, and problems can often be corrected automatically. Accessorial fees typically consist of errors on the label, specifically related to how a parcel is addressed or packaged. Bad addresses or bad information (dimensions, etc.) slow carriers down, and they assess fees in response. Shippers should not lazily accept the fees as a cost of doing business; most who try to address the problem do so in one of three ways:

Negotiating fixed rates: ignores the problem altogether
Outsourcing: manages the problem
Correcting behavior: fixes the problem

Although a parcel TMS can help to fix these problems, shippers first need to choose a system of record for all orders; this could be an ERP, WMS, OMS or other system. With a system of record in place, they must determine the best way to communicate with carriers or how they will send orders, receive deviations and delivery notifications, and manage invoice reconciliation and electronic payments.

At that point, two types of reports can quantify the problems with accessorial fees and clarify the potential ROI of fixing them. Address correction reports organize correct and incorrect addresses and incorporate carrier fees to assess costs. Shipment correction reports organize fees associated with dimensioning and other packaging problems. Since these problems can be easily corrected with the right parcel TMS, the reports help shippers determine if penalties and the ROI associated with fixing them outweigh total cost of ownership.

As shippers seek to improve customer service while reducing costs, a TMS for parcel can assist, and at least three methods are helping them use clean, reliable data and analyses to forecast the ROI of this investment specific to their shipping needs and with great precision to better understand what’s at stake.

Ken Fleming is president of Logistyx Technologies, the leader in Transportation Management for parcels. 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.

Editor’s Choice: How Shippers Can Fight Back Against Budget-Breaking Carrier Rates

Retail | By Ken Fleming • 06/27/2019

Note: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice.

Parcel — Ken Fleming, President of Logistyx

In my last article, I detailed the need to consider add-on or accessorial carrier fees, not just base rates, to control shipping costs without sacrificing service. Still, downplaying the importance of keeping regular tabs on those base rates can wreak havoc on a shipper’s costs; they remain an incredibly important part of the equation.

As they struggle to control their shipping costs and retain razor-thin margins, many retailers today feel like they’re at the mercy of carriers, which are commanding record-high rates for their services.

Carriers have been able to escalate their rates to all-time highs for two main reasons: one, the ongoing, severe shortage of qualified drivers in the global shipping industry and, two, the exploding popularity of e-commerce among consumers across the world. (For the rest of the article click HERE)

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