Historically, freight shipments made up the largest portion total shipping spend for most companies, and accordingly, received the most most attention. But more companies are relying on smaller shipments as E-commerce and the growth of the on-demand economy is causing a massive increase in the use of parcel shipping. According to Pitney Bowes Parcel Shipping Index, over 87 billion parcel shipments were delivered in 2018, with that figure estimated to more than double by 2025.
With Parcel shipping becoming a larger and more important piece for many business it will become increasing important for companies to properly oversee their parcel shipping practices and costs. Parcel invoices can be long, messy, and not quite as straightforward as the invoice for a truckload shipment, but those that effectively manage their parcel data will gain these 5 major benefits.
Customer service during the post purchase experience is typically reactive. The customer notifies you that their order is late, and then you perform damage control. Late shipments are, and for the near future, will continue to be a part of life you can’t completely eliminate. However, properly managing and analyzing your parcel data can give you a better picture of what happens to each package after they leave your facility.
Proper parcel oversight can give you insight into on-time performance by carrier, a deeper dive into your data can even tell you on time performance by geography or service level of the shipment. Additionally, looking at this data will give you the complete picture of on time performance. Previously, you only knew if a package is late when a customer made a complaint. Some percentage of customers who receive an order late won’t let you know, but this doesn’t mean it won’t hurt their loyalty to your brand and likelihood of becoming a return customer.
Analyzing your post shipment data can help you take a more proactive approach to customer satisfaction, helping you select carriers and service levels that will get your customer’s their order on time. Additionally, it will help you optimize your overall shipping practices potentially allowing you to offer your customers faster or cheaper shipping options.
With thousands of individual shipments and dozens of surcharges and cost factors attached to each package, ineffective parcel management is death by a thousand paper cuts. Small issues in your shipping practices become more difficult to notice, and their cost adds up quickly. Mistakes are bound to happen, but allowing them to go unchecked and unresolved can be costly.
Effective parcel oversight should allow you to track individual surcharges/fees and costs historically, on a week over week or month over month basis. By keeping an eye on charges historically you’ll be able to easily identify when certain costs get out of line with the norm, indicating that there may be an issue worth you looking into.
We’ve seen changes in packaging vendors, incorrect customer addresses, unauthorized account use, and plenty of other factors increasing costs by tens or hundreds of thousands of dollars go months or even years without being brought to light and fixed. Often times these issues don’t go unnoticed or fixed because of complacency. They just simply aren’t large enough stand alone charges to get noticed on a parcel invoice that’s hundreds of pages long. But by tracking each charge historically you can tell much more quickly when something needs to be fixed
Who is responsible for parcel shipping at your company? If I had to guess, I would assume you would answer that question with more than one name. Even at smaller companies it’s common for multiple people to be responsible for an individual part of the parcel shipping process. You likely have a couple warehouse workers that manifest shipments, an operations/warehouse manager that negotiates carrier contracts, an accountant that receives and pays the invoices. For large or enterprise companies, with multiple distribution centers or business units, these responsibilities can get dispersed between dozens or even hundreds of people.
If I had to make another guess, all of the employees involved probably don’t have access to the same data and information. Each employee likely has unique information, data, or input about the parcel shipping shipping process. And without everyone being on the same page, you wont be able to make the right decisions for the company overall.
Effective parcel oversight ensures that information gets communicated effectively between employees and everyone has access to the data that they need. This helps enable better decision making when it comes to selecting which carrier to partner with, what service level to ship products with, what discounts to go after in negotiations, and many other decisions that will make your shipping process more efficient overall.
Rising shipping costs are one of the few certainties in business. Rates increase annually at about twice the pace of inflation in the current economy. Which leaves companies with two choices; either proactively find efficiencies and lower shipping costs, or let your costs increase and become a little less competitive or profitable each year.
You can’t lower your costs unless you understand them. So effectively tracking your shipping costs is crucial to maintaining profitability and offering competitive shipping options for your customers.
Proper oversight of your shipping expenses helps you identify your largest cost areas where better rates or more efficient practices would be the most effective. It helps you identify inefficient practices and unnecessary costs and helps you come up with solutions to eliminate them. You probably already do this from time to time. But to gain full control of your shipping costs this needs to be an ongoing process. Effective management of your parcel data allows you to continuously find lower cost solutions, instead of waiting until you see you costs rise to try and cut them back down.
Parcel invoices, as they come from your carrier, are long, complex, and disorganized. Because of this it’s common for parcel costs to not be attributed properly. Do you understand the full costs/profitability of shipping a certain product? The costs of serving customers in one zip code versus another? The true costs of sending out marketing collateral to your distributors? How much it costs to send paper payroll or HR documents?
Your standalone parcel invoices wont list what product each shipment is charged to, what department it came from, and a lot of other information that can help you better understand your overall costs. But keeping your parcel information in a consolidated reporting platform that automates cost allocation can help give you a full picture of your business expenses.
Not all parcel costs are associated with shipping product. Costs can be accrued through multiple areas of a company and many different job functions. Properly allocating and overseeing parcel costs to each area of your business can help you not only lower costs the costs of shipping products but also make better financial decisions throughout your whole business.
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