eCommerce has caused an explosion in shipping volumes worldwide. The pressure is now on shippers to implement omnichannel fulfillment to get closer to their customers to achieve faster and less expensive delivery and offset the cost of “free shipping.” They have to ship anywhere, from anywhere: from fulfillment centers, stores, depots, and suppliers who could be located anywhere in the world. National and regional parcel and LTL carriers will continue to play a critical role in omnichannel shipping strategies, but the writing is on the wall, the demand is growing for more localized and specialized delivery services.
Whether it is processing holiday returns, shipping to consumers taking advantage of post-holiday sales, or moving overstock items back to manufacturers, shippers are already starting to feel the impact of the various carriers’ 2019 general rate increases.
As we have discussed in a previous blog, the average rate increase for the two U.S. major carriers is set at 4.9 percent, two times the rate of inflation, making it more important than ever for shippers to make competition work for them by utilizing a multi-carrier shipping strategy. This will continue to be a factor if 2019 is anything like 2018, which saw steady growth in accessorial fees and surcharges. Managing transportation costs for your company is critical, whether doing it yourself or with the help of a third-party logistics (3PL) provider, especially with customer expectations for free and faster deliveries.
As 2019 begins, so do the latest carrier General Rate Increases (GRI). As we discussed in an earlier blog, the announced U.S. carrier GRI is averaging 4.9 percent, or 2 times the inflation rate, making it more important than ever for shippers to utilize a multi-carrier shipping strategy.
While general rate increases in this range are nothing new to shippers, there are some things that shippers need to be aware of as they enter the new year.
Take a look around the Internet this time of year and you’ll find news articles and blogs filled with end-of-the-year lists. Well, who are we to not join in on the fun. So, when kicking around ideas for our end-of-the-year list, we decided to look at ourselves. Here is a list of five of our favorite—and most popular—blogs of 2018 so far. (Hey, this one may just beat them all, but we can’t see the future!)
The only thing that is constant is change. That saying is as true in today’s business world as it was when ancient Greek philosopher Heraclitus said it in one form or another in the late 6th century BC. For shippers, annual carrier rate changes are a constant, and they constantly increase.
A recent webinar by Pitney Bowes looked at those changes, some of the factors driving them, and things shippers can do to keep overall costs down. It was an excellent webinar offering a wealth of information, and we couldn’t help but share some of the insights. First, here is a summary of the announced general rate increases for next year for the three major U.S. carriers:
Batteries are running the world. OK, not literally. However, according to a report from Market Research Future, the global battery market is expected to grow at a 4 percent compound annual growth rate (CAGR) between this year and 2023. While the automotive sector is expected to fuel this growth as companies look to alternatives to gas-powered vehicles, cell phones, laptops, and other portable electronic devices and the overall increasing dependence on technology are contributing to the rise in battery usage in a big way.
We all know that too many businesses have too many people wearing too many hats, and as parcel shipping becomes more complex, more shippers are turning to 3PLs to help them take off a hat or two.
According to the 29th Annual Council of Supply Chain Management Professionals (CSCMP) State of Logistics Report, parcel shipping spend topped $99 billion, a 7 percent growth in 2017 compared to 2016, driven in large part by eCommerce. Shippers are looking for help with everything from rate negotiations to parcel shipping systems to last-mile logistics.
As a result, the market is seeing many 3PLs jump into the fray, and the competition for business is getting fierce. With the fight for carrier capacity, it is not enough for 3PLs to be one-dimensional in their service offerings. Their clients will simply move on.
Parcel shipping technology is evolving—quickly. From eCommerce to manufacturing and more, shippers are managing and coordinating more delivery methods than ever to keep up with customer needs. No longer will one carrier or one distribution model do. Whether shipping shoes to a consumer or parts to a plant, parcel shipping has become a multi-carrier, omnichannel endeavor and a robust parcel shipping platform is needed now more than ever. That’s one of the things that Ken Fleming, chief operating officer at Logistyx Technologies, discussed in a recent webinar, “The Future of Multi-Carrier Shipping Systems (Beyond the Shipping Label).” And we couldn’t agree more.
Increasingly, businesses are turning to cloud-based transportation management systems (TMS) to automate business processes to save not just money, but time. In fact, worldwide revenue in the TMS sector is poised to surge from $9.6 billion in 2016 to an expected $30.04 billion by the end of 2025, indicating a compound annual growth rate (CAGR) of 13.6 percent, according to a study reported by DC Velocity. The increase of cloud-based TMS is an essential factor in the growth.
While the move to the cloud is easier than ever as implementation time and associated costs are falling, there are five things shippers should consider when evaluating production-level performance of their cloud-based parcel shipping system in a business environment where every second counts:
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.