3 Alternative Ways to Reduce Parcel Shipping Costs

In practice, organizations have developed tried-and-true solutions to help control parcel shipping costs. For example, one common tactic is to eliminate late deliveries, which limits the need to rush-ship as many items and reduces the total cost of parcel shipping. This low-hanging fruit does not have to be where the savings stop. Here are three alternative parcel management strategies you can employ to reduce expenses and get more value from your carrier relationships.

1. Deal With Address Corrections

Any lost or delayed shipment represents sunk cost. You will either have to send another product to the customer or deal with customer support calls from a frustrated client seeking answers about why their parcel did not arrive on time. Sometimes losses and delays are unavoidable. They also happen for some surprisingly simple reasons. One of the more common issues that affects delivery is an improper address. You could run into a situation in which:

  • An address is listed in an unconventional format, causing an automated scanner to flag it as incorrect and send a correction request back to you. This leads to delays in getting the package out for delivery.
  • A listing does not comply with the carrier’s regulations for address listing and coding, causing the carrier to hold the package until you correct the situation.
  • A consistently incorrect address sends packages to the wrong units within a business park or multi-unit dwelling, creating confusion for customers, potential for theft and delays in delivery.
  • A failure to update addresses for customers who move or request an alternative shipment destination leads to packages being sent to the wrong location.

In any of these cases, you could be required to recover and/or resend packages. You may need to replace a shipment entirely. Setting address compliance standards and analyzing your database for data quality and policy compliance is vital to eliminating unnecessary costs.

2. Prevent Shipper Error

Vendor compliance is not always cut and dry. You may encounter situations of improper account number usage, leading to costs for something you did not ship. For example, a retailer may use a distributor for one of its jacket brands. When the distributor gets an order, it knows to use the account number for that retailer. However, if one of the distributor’s dock workers or order entry employees applies the account number to the wrong shipment, the retailer could be left paying to deliver somebody else’s product.

On an isolated basis, these errors may not be particularly expensive. Over time, the costs can add up quickly, leaving you paying a hefty bill to ship another company’s goods. If you attach a P.O. number or order number to each shipment, you can analyze each shipment in your account, verify that rules have been followed and prevent errors.

3. Protect Against Fraud

Imagine an employee knows your account number and is authorized to make shipments. How can you prevent that employee from using those details to send gifts to friends or using your company’s assets for personal purchases? If you cannot track every shipment easily, this small fraud can go undetected. When you track order numbers or P.O. numbers, you can eliminate this type of fraud entirely.

Internal compliance rules can also let you attach account numbers to locations. If an account number is designed for goods that will ship from a specific location, any item under that account number shipping from an alternative location would raise a red flag. There may not be a problem in some cases, such as a vendor shipping from a backup warehouse due to unexpected supply limitations. But it can also be a sign that vendors are creating additional expense because they are not complying with service level agreements.

Maximizing Value Potential

Taken in isolation, these errors or fraud instances may not cause significant damage. Over time, at volume, the costs add up quickly. If you do not have strong rules in place and software to monitor compliance in real time, the unexpected expenses can be significant. A typical 3PL may be able to help you tackle low-hanging fruit to reduce parcel shipping costs. An enterprise logistics partner like Transportation Insight can work closely with you to create the best rules for your business and implement technology to monitor compliance. Identifying errors and fraud efficiently creates significant value as you are able to reduce parcel shipping expense to protect profitability.

To learn more about the Transportation Insight’s expertise can help your business, contact us today.

Exploring the Importance and Challenges of Secondary Packaging

Secondary packaging is the practice of using a branded, often personalized packaging option for the item a customer orders. From there, that container is boxed for shipping in a more typical package. This lets you create the personal, specialized package without exposing your goods to damage or as much risk of theft during shipping. This type of strategy could be critical in laying the groundwork for more personalized e-commerce experiences, but secondary packaging also comes with significant process challenges that must be overcome.

Responding to E-Commerce Growth Through Personalization

A study from Wise Guy Reports predicted the global e-commerce market would expand at a compound annual growth rate greater than 10 percent from 2018 through 2021. To a great extent, this growth is being driven by a blend of increased demand and greater sophistication in using technology to improve logistics processes within the sector.

As e-commerce continues to grow, brands are constantly exploring ways to create competitive advantages. Promoting stronger customer experiences is critical here, and personalization is emerging as a key option. A Segment study found that approximately 71 percent of consumers get frustrated by impersonal shopping experiences. Another 40 percent of consumers said they’ve purchased something more expensive than their original intent due to a personalized experience. Ultimately, 44 percent of those involved in the study said they are likely to become repeat buyers if their interactions with the brand are personalized.

While a lot of this data points to digital marketing initiatives, that isn’t the only way to capitalize on the demand for personalized experiences. For example, shipping experts and logistics partners can work with you to implement secondary packaging strategies alongside other advanced supply chain strategies to help you take advantage of the opportunities created by personalization.

Offering End-to-End Personalization

Data lays the groundwork for personalization. Gathering customer data, organizing it, integrating it across lines of business, and delivering it to end users in an actionable way is key to providing personal experiences. If customers are logged in on your website, you can feature products based on their shopping history. If they are completing an order, you can save payment details and shipping information to ensure a smooth checkout. After the purchase, you can offer follow-up emails with promotional offers and content that supports a better user experience, such as assembly videos for furniture purchased online.

All of these personalized touch points can bolster the customer experience, but it’s important to move personalization beyond the digital realm. If a person buys a good in a store, you may provide a variety of amenities that create a more personal, branded experience. Something as simple as a high-quality box with eye-catching visual design and intelligent interior packaging can make a huge difference. Providing user guides, information on related products, or similar materials can provide a personal touch, guiding shoppers to more interactions with your brand. Secondary packaging lets you extend this opportunity through the shipping process.

The difference between a personal, customer-focused experience with secondary packaging and a standard shipping situation can be encapsulated in a simple idea. Imagine what happens when a customer opens the box. In a standard environment, they’d sort through packaging materials finding their items and materials. With secondary packaging, they open the box to a cultivated experience with a designed box and supplementary materials that add excitement to getting the item that was purchased.

Creating a Framework for Secondary Packaging

While secondary packaging is promising from a customer experience perspective, it does create complexity. You’ll need to:

  • Design packaging that will be attractive to the customers you are targeting.
  • Pack materials in safe, attractive ways that guide users through the process of exploring their new item.
  • Adjust inventory management to ensure you always have supply for secondary packaging elements, including boxes, inserts, and user materials.
  • Manage safe, secure, and accurate preparation for shipping.
  • Ensure your final packaging complies with requirements from your shipping partners or carriers.

Data visibility is critical in all of these processes as managers across lines of business need to understand sales and shipping expectations to maintain supplies and manage specific customer orders. An effective secondary packaging strategy often forces organizations to treat each package as a unique shipment, not simply a box that needs a unique address label.

Getting Started with Secondary Packaging

Making the deep process changes needed to support secondary packaging begins with a deep understanding of every facet of your supply chain. Enterprise logistics partners bring expertise and technology to help you understand everything from your carrier relationships to your packaging supply chain with greater precision. From there, a partner can empower you to make strategic operational changes that let you integrate secondary packaging into your parcel management processes as seamlessly as possible. Transportation Insight is leading the way toward logistics innovation through our unique approach to partnering with clients. Contact us today to learn how we can help you drive personal e-commerce experiences.