So far, 2022 has proven to be a fantastic time for millions of online shoppers who continue their voracious online shopping. It's a heady time, with solid GDP and jobs growth overlaying two years of ongoing economic disruption.
But how are retail and e-tail supply chain managers faring in the new year?
How are they managing the near-year-round peak shipping season phenomenon? How about high customer expectations for same-day or rapid shipping and user-friendly tracking options? Or the now near-chronic supply chain disruptions that have them scrambling and the lack of transportation and warehouse capacity?
Despite the heady brew of roadblocks to efficient shipping, the reality is that over three-quarters of retailers still use a single-carrier strategy or parcel-shipping system, according to a study conducted for Pitney Bowes by The Colography Group. This scenario is not ideal since the large parcel carriers' volumes, rates, and surcharges have surged lately, and there's a lot less capacity to go around.
For example, UPS reported robust volume for its first quarter of the fiscal year ending Aug. 31, with its hefty revenue growth of 13 percent overall year-over-year. FedEx Ground saw its revenue jump 35 percent during the quarter due primarily to residential delivery volume growth, including the sharp increase in demand resulting from stay-at-home orders and other responsive measures to the COVID-19 pandemic.
Most retailers haven't tapped into AI to determine the most cost-effective and most efficient shipping method. Hobbled by a single-carrier system, they're sacrificing shipping efficiency and their brand since:
Single-carrier systems are designed for the carrier they represent, and it's often difficult to switch between carriers due to contracted volumes and the need to use separate systems for different carriers.
With a limited number of carriers to choose from, retailers may not offer customers options like same-day or next-day shipping at checkout and have a hard time choosing a better shipping option at a lower cost. This problem is especially critical during increasingly frequent peak surcharge periods.
As our recent holiday season showed, single-carrier contracts are subject to termination due to maximum capacity breaches.
Depending on service type and zone, one parcel carrier may be cheaper than another. But the optimal packing solution often differs between carriers.
Old single-carrier arrangements have made it nearly impossible to figure out how to ship something cost-effectively to customers, partners, or distributors, with predictable costs or delivery guarantees. For retailers, it's becoming essential for retailers to balance their costs with carrier requirements, strengths, and weaknesses.
Forward-thinking retailers today need the kind of flexibility multi-carrier shipping software provides. With access to parcel carriers, less-than-truckload (LTL), and full truckload (FTL) carriers, retailers can:
Rate shop a broad network of carriers with different skills and delivery specializations and parameters--especially helpful when doing automated rate shopping.
Take advantage of local, regional, and national carriers to ease capacity restraints, avoid specific surcharges, and increase customers' shipping options.
Factor in the U.S. Postal Service and commercial carriers for final-mile delivery and cost savings.
Access negotiating clout by working with third-party partners--either directly by integrating an application program interface (API) into their own systems or indirectly by using broader order management or e-commerce software.
Optimize costs and space used--on trucks and in packaging--by choosing a smart system. For example, Paccurate reduces packaging size by an average of one square foot per carton and reduces filler material by an average of 20%. Paccurate's negotiated rate tables have incentives built in to pack a certain way, depending on the DIM weight and zone, and work with the parcel, LTL, and FTL carriers.
Multi-carrier shipping software helps retailers build a solid supply chain management and shipping and fulfillment strategy. It accomplishes this by seeking the best packaging configuration, automating the process for finding the optimal packing solution for multiple carriers, and comparing and choosing the right packing solution and the suitable carriers to maximize savings.
Smart cartonization isn't just about right-sizing packaging. It's about broadening options, managing delivery disruption risks, reducing fulfillment costs, and avoiding wasted material in e-commerce shipping fulfillment.
Book a demo with the Paccurate experts to learn how to slash shipping costs by automating the process behind finding the optimal packing solution, shipping mode, and carrier for every shipment.
Alternatively, download the cost-optimal parcel packing white paper to understand how modern cartonization technology allows shippers to get more orders flying out the door - whilst maximizing order fulfillment profits.