UPDATE: There are times of the year that we know our wonderful, and helpful content may be missed. The week of July 4th is just one of those occasions. We hate to think that you might miss something as important as making a choice between ground and LTL for your shipping, so we decided to post this again to make sure you get this valuable information [well, that and our blog editor is on vacation].
As the distinction between parcel and freight modes continues to blur, smart shippers save money by comparing the aggregate cost of individual parcels with total freight costs.
However, switching back and forth between multiple systems to compare parcel and freight pricing is time-consuming and prone to errors. When time is of the essence, shipping personnel sometimes take the path of least resistance and pick the mode they are most familiar with or easiest to process, which can lead to lost profits.
You’re working hard to satisfy customers’ demands for fast, free delivery. This means that you are shipping from multiple locations and using multiple carriers to not only get products to customers quickly but to keep costs down as well. However, you realize how difficult managing a decentralized cargo chain can be.
No longer are shoppers limited by in-stock inventory at the closest mall. Driven by the growth of eCommerce, today’s shoppers—especially younger ones—are now shopping globally from their laptops, tablets, and phones, driving unprecedented parcel shipping volumes around the world. Meanwhile, big eCommerce is shifting the customer mindset toward free and faster shipping, regardless of the distance and price of the item being shipped.
As both B2B and B2C eCommerce pick up international steam, the need for a well-managed global cargo chain is more important than ever.
With many moving parts made up of people, information, processes, and resources—that must all work together to get the item from the first mile to the last mile—there are plenty of chances for it to misfire, leaving customers unhappy and logistics costs high.
For consumers, the final leg of delivery, the last mile, is what really counts. They don’t care about the sausage being made, how the item is picked and packed in the warehouse, put in a carton, stacked on pallets … oh well, you know the steps. What they do see is that final piece of the delivery puzzle when the item they ordered a day, a week, a month ago, is left on the doorstep, placed in a locker or car, or carried across the threshold and set up in the home.
When the U.S. Postal Service (USPS) announced its rate hikes last year, there were some significant changes that went into effect in January. USPS has firmly established its dominant place in the eCommerce B2C delivery space so any rate change is likely to have an impact on shippers. But among the changes expected to have the most impact is how USPS will now calculate dimensional (DIM) weight.
Changes in USPS DIM weight calculations will especially impact those shippers who are still guessing about how to pack and ship parcels and may not have taken DIM rating into account when shipping through USPS. Previously, shippers could be a little less precise when it came to packing USPS shipments as DIM weighing only applied to Priority Mail shipped to Zones 5–9.
Whether shipping around the corner or around the world to the end consumer, the only aspect of delivery that customers notice and care about is that it arrives at their door on time. To them, all delivery is local delivery.
Increasingly, as retail and e-tail merchants take an omnichannel approach to their shipping, shippers are growing their use of local carriers beyond their traditional modes of shipment (FTL, LTL, national and regional carriers, and local carriers). In fact, an IbisWorld report shows that over the past five years, the couriers and local delivery services industry in the U.S. has grown by 4.9 percent to reach revenue of $107 billion in 2019.
eCommerce is blowing up the traditional lines that used to differentiate transportation modes. Increasingly, consumers are demanding free and faster delivery for more types of goods than ever before, including appliances, furniture, food, and clothing. Retailers are responding with omnichannel fulfillment and shipping strategies to reduce the cost of free shipping while staying true to their delivery promise.
If you frequently ship freight, the concept of rate shopping isn’t new to you. By using live rating functionality instead of static routing guides and annual contracts, savvy shippers can communicate regularly with their carrier network to renegotiate their rates monthly or quarterly — resulting in savings on transportation costs upwards of 15 percent.
Spurring this on is the growth of eCommerce—and the omnichannel shipping methods being adopted by many e-tailers. Globally, online purchases account for slightly over 10 percent of total retail sales, up from around 5 percent in 2012, according to the report.
Become a better parcel shipper to reduce costs, increase margins, improve customer service, and stay competitive. Stay informed on the latest trends in shipping and parcel transportation management. Delivered regularly by email and through social media.