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It’s Time To Take A Closer Look At Your Parcel Shipping Costs

eCommerce is driving the demand for smaller, more frequent last-mile deliveries. As a result, parcel rates are soaring at more than twice the rate of inflation. At the same time, consumer expectations for free shipping and more delivery options are increasing, largely reinforced by Amazon. Shippers large and small need to look more closely at parcel transportation costs as a step in preserving margins. Increasingly, they are turning to enterprise parcel shipping software with parcel shipping analytics.

Unlock Parcel Shipping Analytics To Better Manage Multi-Carrier Shipping Costs

Logistics managers have only a very fragmented and superficial view of their parcel expenditures. Shipping data has historically been locked up in a disparate array of silos like multi-carrier systems, carrier-provided systems, and websites that each store data in a variety of different formats. Office and inbound shipping costs aren’t tracked at all except in the form of weekly carrier invoices that are very difficult to reconcile. The result is that those in charge are unable to measure what they are responsible for managing, and therefore unable to get at the insight opportunities that might exist for cost savings that could mitigate the impact of “free shipping.”

The Guide to Proactive Inbound, Outbound, and Reverse Enterprise Parcel Management


SaaS-based parcel shipping platforms, data warehouses, and business analytics technology make it easier and more affordable to manage multi-carrier shipping costs. Enterprise parcel shipping platforms capture and store shipping data from across the enterprise in a single data warehouse and match it against carrier invoice data. Business intelligence tools can analyze and identify transportation cost reduction opportunities. These can then be enforced by improved parcel shipping processes in order entry, purchasing, fulfillment centers, drop ship suppliers, stores, offices, mail centers, and customer service. The more data you have, the more opportunities there are to mine for nuggets of cost savings.

Parcel Spend KPIs Provide At-A-Glance Insights and Detailed Analysis

The three main areas you can look to reduce costs using parcel shipping analytics are:

1. Potential Shipping Efficiency Savings. Realizable Savings Through Better Enterprise Shipping Processes And Controls:

  • Rogue shipping: Identify the unauthorized use of corporate shipping services by employees and third parties.
  • Rogue carrier selections: Identify and enforce the most cost-effective carrier service routing decisions.
  • Address corrections: Eliminate address correction fees by validating addresses in order entry and in shipping.
  • Unexpected dimensional weight fees: Implement cartonization technology to substantially reduce the fees carriers are using to punish shippers making poor packing decisions.
  • Consolidation opportunities: Identify situations where you are shipping too many cartons to the same destination and losing out on consolidation cost savings.
  • Carrier service downgrades: Use lower-cost services for the same delivery results to certain zip codes by comparing actual delivery times with carriers’ published delivery times.

2. Carrier Cost Recovery. Fees That You Can Recover From Carriers For Not Meeting Service Level Agreements And Errors:

  • Guaranteed delivery refunds: Identify and gather the information you need to recover shipping costs for late deliveries.
  • Manifested, not shipped: Get refunds from erroneously recorded transactions that were never picked up by carriers.
  • Lost shipments: Track shipments that were never delivered for which you are entitled to a refund.
  • Damaged: Recover costs for damaged shipments through carrier-provided minimum insurance coverage.
  • Residential/Commercial status disputes: Is it a home or an office? Carriers disagree on status. When they do, you may be entitled to file for credit.
  • Invoice errors: Some carriers (especially freight carriers) are notorious for applying the incorrect rate on invoices. You have a right to have these errors corrected.

3. Benchmarking: These Are Statistics That Can Help You During Carrier Rate Negotiation:

  • Delivery performance: With customers requiring a better delivery experience, you need to measure and hold carriers accountable for on-time delivery.
  • Cost/Lb.: How do your carrier rates compare by zone, weight breaks, level of services and minimums?
  • Landed cost: Determine transportation costs by SKU by assessing historical costs associated by product type, enabling more intelligent cost of goods sold (COGS) decisions.
  • Modeling: Simulate “What if” cost savings and validate transportation strategies and cost impacts.

The cost of free shipping is eating into your margins. Implement parcel shipping analytics to uncover opportunities to reduce costs, improve practices, and turn parcel shipping into a competitive advantage.