If there are ways using Business Intelligence tools can reduce your parcel shipping costs and improve the service you provide to customers (and you know there are), why wait?
There’s already a pile of peak surcharges and fees shippers like you are paying right now, and the 2022 GRIs from UPS and FedEx are about to kick in. Yet a lot of companies are dragging their feet when it comes to implementing a BI solution. The reasons for the hesitation can vary, but with so much to gain, it’s time to get moving. Here are some ideas to help.
Start With a Dashboard View
An interesting thing about small parcel data is that the insight and value can come from both a micro and macro view. For example, the cost impact of some surcharges may only be $0.25 here or a few percent there. But those small amounts add up when they impact a large number of your packages. The same goes for issues with service performance and other carrier missteps. Consistent late deliveries wear on customer relationships and can hurt your brand image over time.
Identifying a change (good or bad) to a particular cost category, such as a 12% YoY increase in address correction surcharges as of November 2021, is an example of such an opportunity. With this knowledge, a shipper is able to more efficienctly find the cause of that increase and create a plan to resolve it.
Sometimes, it’s only after accumulating and analyzing your shipping data that you are able to appreciate the impact of these extra costs and service issues. This is the power of BI tools that are designed to bring parcel-specific opportunities to the surface in a company’s sea of data. Creating that view is the hard part, of course, but that’s the power of a BI tool built specifically for small parcel shippers.
Then, Get Granular
For different reasons, getting access to package-level detail is the necessary complement to the macro view. The ability to drill down brings to light the specific consignees, suppliers, products, and types of surcharges behind the bigger problems. This is where it becomes possible to audit and find opportunities.
When you’re able to drill down, the offending shipping locations and packages can be identified and dissected. Without this degree of detail, it is impossible to pinpoint where the problems stem from — and, therefore, how to fix them. Just knowing that costs are higher, which most shippers can determine already, is meaningless without understanding the cause and doing something about it.
Other Actionable Insights
Here are some other views and benefits parcel shippers can get from their data via a parcel-specific BI tool.
Validation of Incentives: Companies can use data to check that the discounts and incentives expected from their service-level agreements are applied. Logistics managers should be extremely interested in this, because these discounts are proof of a job well done.
Dimensional Accuracy: This is a HUGE blind spot for many shippers and can be costly. The reason so many shippers overlook or deliberately ignore problems that result from inaccurate dimension measurements is because it’s hard to estimate shipping costs accurately with oversized or odd-sized packages. However, there can be severe penalties or surcharges when this happens. Being accurate with dimensions and finding ways to optimize packaging is a great way to avoid triggering dimensional billing with your shipments and the extra costs this incurs.
Account Management: Many companies are spread out, and keeping all the locations aligned when it comes to shipping execution is challenging. Data and BI can be used to ensure all the locations that should be using your service-level agreement are using it, therefore maximizing your discounts and incentives. Shippers need to make sure their parcel volume is all accounted for, yet that is hard to do when many locations are involved.
Parcel Cost Variance: With parcel rates changing so much from one month to the next, the amount a company estimates a shipment will cost is often different than the actual billed amount. When it is the carrier’s fault, this can be caught during the audit and recovery process, but the cost variance is often legitimate. BI tools can allow shippers to see all of those variances and dig into what has happened (which is usually an internal process failure) so it can be addressed.
We Get It — Doing Data Is Hard
Implementing a BI tool seems intimidating and expensive. But you can take the intelligent first step by working with a partner who has already built a parcel data analysis platform with the reports that provide the high-level and detailed views your company can use to optimize your parcel shipping operation.