On April 9th, 2013 Pitney Bowes transportation and logistics expert, John Kruzan, shared current trends in the shipping management environment and provided tips on how to decrease your company shipping costs and increase effectiveness given the current industry trends.
The Shipping Environment – What You Need to Know in 2013 and Beyond – Webinar Playback
The Shipping Environment – What You Need to Know in 2013 and Beyond – Webinar Slides
Status of shipping costs today
- Transportation costs constitute up to 7% of a company’s expenditures
- Carrier rates and fees have risen 30% overall since 2007 (with higher impact on small parcels)
- Supply chains are being lengthened by Internationalization and ecommerce
- Compliance and regulatory requirements have become complicated
- The ability to optimize shipments is diminished
- Monitoring carriers performance is difficult
- Different departments – transportation, procurement, accounting – are in silos and are not sharing the same information
Given this environment, how is it that, according to the Aberdeen Group, 20% of large shippers are “Best-in-Class.” They have decreased transportation spending by 2.5%, achieved overall “on-time” rates of 97%, and they are measuring their carrier performance weekly. In contrast, the “bottom” performing 30% of shippers have seen costs increase 6%, achieved overall “on-time” rates of only 85%, and are measuring their carrier performance fewer than 15x/year.
The answer, as indicated by the measuring differences, is in habits, visibility and control. Industry experts agree that one of the best ways to control carrier spend is by establishing and enforcing business rules and guidelines around carrier usage.
Questions to ask when implementing business rules around shipping costs and carrier management
- Can anyone in your organization send a package through an overnight carrier?
- What tools do your employees have to select a carrier service based on price and delivery objectives?
- Are they aware of the incremental costs that the carriers assign?
- Does your company use manual air bills?
- What time does the package really have to be delivered?
- Are signatures required or just proof of delivery?
- Can Thursday and Friday shipments be sent Priority Mail®?
Once you’ve examined the shipping “habits” of your organization, and carefully audited the daily performance of your carriers, you will be equipped to make the tough business rules, decisions, and choices that drive down shipping costs and drive up on-time performance.
What are your specific shipping management challenges?