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.
Every day, shippers are faced with the growing complexity of ground options and differing service coverage areas making it difficult to select the “best” carrier for their organization’s shipping needs. This leads to them having to have a multi-carrier strategy that requires a multi-carrier software system.
Transtream users understand the value of Intelligent Rate Shopping because it ensures they meet customer expectations for delivery at the lowest cost while helping shippers provide consumers more options for carriers and service.
Consumers want cheaper and faster delivery, or else. The only way retailers can achieve both is to ship from inventory sources located closer to their customers.
Pitney Bowes’ recent Retail (R)Evolution 2019 event served up a smorgasbord of great information about eCommerce logistics, transportation, and consumer trends. Many of the takeaways suggest a shift in the way goods will be delivered in the future:
Pierbridge, Inc., the industry-leading developer of multi-carrier shipping software and part of the WiseTech Global group, is quadrupling its U.S. footprint with a move into new office space in Marlborough, Mass. The new office will accommodate Pierbridge’s rapid growth, following investment in sales, marketing, and development resources.
To keep up with consumer demands for fast and free shipping, as well as a personalized experience with premium services ranging from Sunday delivery to white glove service, retailers are shipping from an endless aisle made up of fulfillment centers, stores, 3PL warehouses, and suppliers to achieve faster delivery at reduced shipping costs. And increasingly they are using alternative delivery services, including local carriers, to do it.
This has led to a jigsaw puzzle of sorts as shippers access this expanding global network of local carrier services in a way that will enable retailers, eCommerce merchants, and 3PLs to meet rising consumer expectations.
Shipping isn’t free. At least not for shippers. For them, it’s about carefully managing transportation costs at all points in the order delivery cycle.
Even as parcel demand continues to push shipping costs up at twice the rate of inflation, consumers increasingly expect free shipping, as well as fast and on-time delivery. For eCommerce players, costs are measured in shopping cart abandonment, customer attrition, and margins. By using multi-carrier shipping APIs across the enterprise, merchants can realize the best of both worlds: customer loyalty and reduced costs.
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.