Small package shipping is big business. Whatever an organization happens to be shipping, from DVDs or computer equipment to automotive parts or paper products, if the shipment is not delivered on time, there is a problem. This is especially true for companies operating in just-in-time or Kanban environments. These organizations depend so heavily on their suppliers to deliver that even slight delays can send ripple effects throughout their organizations. For companies shipping parcels to end users, efficient delivery can make the difference between satisfied customers, customer complaints and returned orders. When customers order products through the Internet or a catalog, delivering the right product at the right price in an agreed amount of time is quite critical to customer satisfaction. Whatever your scenario, it is easy to see how crucial shipping is to the supply chain.
In today's highly competitive business environment, companies are continuously looking for ways to improve their businesses and their bottom lines. An opportunity exists for many organizations to optimize their shipping operations. Shipping can have a dramatic impact on the cost of doing business. Managing and controlling these costs is essential to an organization's future success. When bulk shipping parcels, whether the daily volume is 50 or 500 or 5,000 or more, there are many things that can be done to ensure you are not wasting time and money. Some helpful tips organizations should consider when reviewing their shipping operations include:
Understand your customer's needs and control express deliveries
When an order is received, find out exactly when the customer expects delivery. Just because the services exist to overnight and express deliver packages, it doesn't mean this is when the customer needs it. This is more true for internal shipments. Express/overnight delivery costs add up quickly and can easily erode a company's bottom line and profits. Simply understanding and communicating delivery expectations can save money and ensure customer satisfaction.
Understand carriers and their various services
All carriers have their niches. Some specialize in overnight delivery; others may offer better rates on special services like light or heavyweight shipments. Some provide tracking services as standard while others charge. Carriers offer a multitude of services to consider. This makes comparison and rate shopping challenging. However, in order to get the best deal for both your company and the customer, it is imperative that you shop the carriers. By better understanding the carriers and their services, you can be assured that you are providing the best overall service to your customers.
Let customers know their options
Communicate the shipping options to the customer and let them tell you what they need. Some customers only use preferred carriers, others need specific delivery dates and others just want the lowest cost service. Whatever the specific need, there is a carrier that can make it happen. Customers know what they need and will tell you. Just ask.
Consolidate packages and shipments
Look for ways to consolidate shipments. Combining multiple orders into a single package, banding boxes together and palletizing shipments can help reduce shipping costs. For example, shipping pallets is far more cost-effective than individual parcels. If individual parcel shipping is the necessity, explore the possibility of using parcel consolidator services. · Parcel consolidation services on average save organizations 25% to 35% based on the carriers used. When you are shipping volumes, this equates to substantial cost savings.
Correct addressing
Whether you are mailing or shipping, ensuring that the destination is correct saves both time and money. Software applications exist to cleanse addresses by verifying addresses and cross-referencing them against the National Change of Address (NCOA) database. This activity ensures the address is clean and that your shipment can be delivered before it leaves the building. Incorrectly addressed and returned goods can lead to substantial charge backs from most carriers. These costs erode the bottom line and can have a dramatic impact on an organization. Check your shipping process and strongly consider implementing some type of address verification step to reduce this problem.
In general, hardware needed to successfully implement a small parcel shipping service includes scales, barcode scanning systems, conveyors and/or sortation systems, packaging and banding equipment, shipping label printers and label affixing equipment. Hardware requirements vary based on the size of your operation, the parcel size being shipped and your organization's future growth plans.
Software solutions
Software solutions are a key component to effectively implementing small parcel shipping. Companies need to consider implementing a certified multi-carrier shipping solution that incorporates address-cleansing capabilities. Multi-carrier shipping systems provide organizations with a robust and value-added shipping solution, and there are many advantages to utilizing multi-carrier shipping solutions. Address cleansing software essentially performs a single function; it verifies that the address for delivery is deliverable.
Single user interface to full system integration
Multi-carrier shipping solutions provide a solution for shippers when shipping parcels via multiple carriers. These solutions are available to run as a standalone application, or they can be integrated into an organization's ERP, MRP, TMS or WMS system to facilitate the seamless transfer of information between applications. In the past, a typical shipper would use a separate non-integrated carrier system for shipping via each different carrier. As a result, costs may not have always been the driving factor when shipping parcels. A particular user's comfort level with one system over another could influence how a parcel was shipped. When the shipper or the system can process the shipping request through a single system, managing and using multiple carriers can be done more efficiently and effectively than in the past.
Easy rate shopping
Using individual, carrier-provided applications made comparing shipping rates difficult and time-consuming. Most multi-carrier solutions can compare rates from all major carriers. Additionally, some systems have the ability to be customized and can accommodate custom carriers, including LTLs. The ability to rate shop carriers and quickly analyze delivery alternatives is much simpler for the shipper in a certified multi-carrier solution. Once the parcels' parameters are communicated to the system, system driven logic quickly produces intelligent information that allows the shipper to make efficient real time decisions on shipments.
Integrated tracking and reporting
Some solutions incorporate functionality for shipment tracking and reporting. With these systems, managing and analyzing carriers has never been easier or more effective. Tracking shipments across multiple carriers can be done with just a few clicks. Carrier performance can be easily and effectively accessed on the fly. In integrated systems, tracking and shipping information can easily be transferred to the enterprise system for delivering real time information to other departments. For example, delivering tracking information to your customer via automated e-mail notification or enabling customer service to quickly respond to customer inquiries along with providing shipping costs to accounting for financial reporting are all possible when leveraging a multi-carrier shipping system.
Address cleansing and correction
Some solutions have integrated address cleansing into the solution to provide a deliverable address. By integrating this functionality into the software organizations can further control their costs by avoiding any additional charges and improving overall customer service. And, providing a deliverable address, organizations can rest assured that when the items ship, there is less chance they will be returned.
In conclusion
Increased competitive and economic pressures have companies looking for ways to reduce costs and increase productivity. Improved technology and automation increase productivity and made shipping more efficient. Companies can now be better equipped with the tools necessary to convert their shipping department into a highly efficient department. Solutions like certified multi-carrier shipping systems provide companies with the information to quickly make educated decisions that will have a positive effect on your bottom line and improve the overall customer experience.
In today's business environment, shipping areas are becoming a prime target for change. With the lower entry costs for improvement, compared to historical ERP, WMS, high-cost integrations and long projects that disrupt organizations, companies of all sizes are efficiently and effectively utilizing certified multi-carrier solutions to better their customer experience and their overall organization.
Charles A. Rothofsky is the marketing communications manager and Steve Strohacker is the national sales director, Revenue Based Software, for Secap. Contact Secap at 800-523-0320 or visit www.secap.com.
