Posted On January 3, 2022
Having more options isn’t always better—but when it comes to parcel shipping, it definitely is.
Multi-carrier parcel shipping is a growing aspect of order fulfillment, especially for e-commerce companies. It involves leveraging several parcel carriers (like FedEx, UPS, DHL and the USPS) to deliver packages, typically for e-commerce companies. The process can be done manually, but making an informed decision with rate shopping technology is infinitely faster and easier: after inputting the dimensions of a shipment, companies select the best option for individual shipments within seconds.
There are numerous multi-carrier parcel management solutions out there, but just like any other shipping solutions, they’re not all made equal. From stand-alone platforms that offer just the basics to platforms created by logistics partners that integrate with transportation management systems, today’s market has options to meet every unique shipper’s needs.
We’ll cover the benefits of incorporating multi-carrier parcel management solutions into your shipping operations soon. But we often hear one major reason why businesses hesitate—and we need to address that first.
The biggest potential drawback of multi-carrier parcel shipping.
There’s a reason why some companies choose to work with a single carrier: they think it will save money.
For businesses that ship hundreds of packages a day, carrier discounts of 50-60% are game-changing. But those discounts come with a restriction: they’re only in play if shippers dispatch large volumes of shipments. Distributing the parcels across numerous carriers would mean losing the discount and paying higher shipping costs.
It’s a valid concern, and we certainly aren’t advocating for losing discounts that have a big impact on the bottom line. But it’s possible to maintain the global parcel volume necessary to keep the discount, while also utilizing several carriers—you just have to look at the parcel shipping program as a whole, and employ the best tools available, to uncover opportunities that make the strategy work.
Now that this misconception is out of the way, keep reading to learn the benefits of multi-carrier parcel shipping.
More pricing options equal lower shipping costs.
This, of course, is the biggest and most obvious benefit to multi-carrier parcel shipping. Just like most other markets, when customers have more options, that usually means better prices. Even if a parcel can ship for just five cents cheaper on carrier B than carrier A, those cost differentials add up, especially for e-commerce companies shipping hundreds of shipments every week—or every day.
Better leverage in negotiations—or skipping negotiations altogether.
Enterprise companies with thousands of packages shipping out every day are familiar with contract negotiations. Having relationships with multiple carriers gives them leverage to reduce costs. And even better, some multi-carrier parcel shipping solutions curb the need for negotiations altogether.
For example, with the parcel optimization model Flat World employs, we negotiate on behalf of customers, so shippers don’t have to give a volume commitment, and can try out the program without tons of risk.
A backup plan for the unexpected.
Supply chain diversification is more important than ever.
Supply chain disruptions caused by the pandemic showed companies the consequences of relying on a single carrier. During the 2020 peak parcel season, major carriers put volume restrictions on customers, forcing them to find other delivery methods in order to meet their customers’ expectations. The result: higher costs and disruptions to operations. Having access to multiple carriers allows shippers to easily pivot.
Faster transit times for parcel shipments.
Carrier performance can vary drastically among carriers, or even regions of the country. A company might get better results using carrier A for parcels going to urban and suburban areas, and carrier B for packages going to rural areas. And since consumer demand continues to favor faster delivery, having options when it comes to delivery time can go a long way toward ensuring customer satisfaction.
Better customer experience.
Modern technology continues to improve the parcel shipping experience for customers. DHL Express recently introduced On-Demand Delivery, which gives recipients flexible options for how and when their packages will arrive. (For example, a package can be held until the customer will be home, or diverted to a different address than originally intended.) It’s only a matter of time until other carriers start following suit. Being able to access various carrier offerings to enhance the delivery experience for recipients will only improve customer satisfaction.
Have questions about Flat World’s multi-carrier parcel shipping services? Let’s talk! We can help you reduce shipping spend and transit time while enhancing the customer experience, one parcel at a time.