Multi-carrier: one way to improve supply chain resilience
In the wake of the Covid-19 outbreak, e-commerce is firmly in the spotlight and improving supply chain resilience is now on C-level agendas across industries worldwide. Whilst many organisations may have a degree of flexibility built into their supply chains, research from the Institute for Supply Management in the USA in March found that almost three-quarters of companies reported supply disruption, and 44% did not have a plan in place to deal with the kind of disruption brought by the pandemic.
Using a Multi-Carrier Shipping Strategy to Increase Supply Chain Resilience
At a time of significantly increased e-commerce demand, the task of getting products to customers has never seemed more difficult. Shippers have been forced to look towards new fulfilment methods to provide the additional capacity and flexibility that’s required to manage the surge in order volumes and meet on time delivery requirements. One key consideration: moving to a multi-carrier distribution strategy to reduce transportation costs, provide a consistent level of service to customers, and meet their different shipping requirements.
Make Switching between Carriers Easier
The challenge has always been that each carrier insists on applying rigorous, and unique, labelling and electronic communication requirements in order to move parcels through its network. Shippers who rely on a specific carrier have to meet its specific requirements or suffer the consequences of delivery delays, lost packages, or unexpected surcharges and fees. And guess what? Each carrier wants you to use its own IT software platform to make this compliance possible.
There’s no doubt single-carrier systems are well designed for the carrier they represent, but in order to adopt a multi-carrier strategy, shippers need to move away from them. Carrier-supplied platforms make switching between carriers or using multiple carriers difficult or prohibitive— either because shippers must hit specific contracted volumes with each carrier or because of the unwieldiness of managing separate systems for different carriers.
For example, with a carrier-supplied platform, the shippers’ employees need the insight to make the best choice about how to get an order to a customer. Comparing rates and routes is labour-intensive and time-consuming. Also, using carrier-supplied platforms increases the chances of missing out on the pricing and delivery advantages available with multiple national, regional, and local carrier services, as well as with national postal services. Furthermore, when dealing with different sets of requirements and multiple staff members using separate terminals, it’s easy for keystroke and human errors to occur, resulting in delivery delays, lost packages, extra costs, or the inability to use particular services.
Streamlining Shipping Processes and Increasing Resilience with Multi-Carrier Shipping Software
While the end goal of any shipper is to deliver products to customers on time, without damage, at minimal cost, and in the most efficient manner possible, the recent spike in e-commerce has also increased customers’ ability to customise their shipping options. For example, one customer may choose to have their package delivered to his or her home, and another may opt for click and collect.
Multi-carrier shipping software enables the shipper to work with multiple carriers’ labelling and communications requirements and meet their customers’ delivery demands from within the shipper’s own system. The solution automatically determines the carrier that can provide the best rates to a particular region and according to the shipper’s business rules, ensuring every shipment complies with each carrier’s requirements, as well as with any applicable trade regulations.
In addition, multi-carrier shipping software enables shippers to easily use “zone skipping” (also known as “hub induction” or “direct injection”) to improve customer service and cut transportation costs. Zone skipping occurs when multiple customers’ orders are consolidated for the first leg of the delivery journey and then inserted into a parcel carrier network for the last-mile delivery. This is especially beneficial for cross-border shipping because it significantly simplifies end-to-end logistics and decreases customs clearance costs. It also provides greater flexibility by allowing shippers to select local carriers in different countries and regions that have optimal delivery networks for serving their customers.
Building Resilience to Improve Future Performance
Importantly, a cloud-based multi-carrier shipping system can give shippers the ability to quickly onboard and optimise new carrier services. This is a gamechanger in a crisis that requires a retail shipper to suddenly increase capacity, or pivot to a ship-from-store model, for example - or even pull local courier services into the transportation mix to maintain on-time delivery rates. It can also provide the data and analytics necessary to understand where logistics performance is sub-par and uncover opportunities to increase performance and reduce cost.
Increasing supply chain resilience though multi-carrier shipping solutions gives shippers the ability to respond to, and recover more quickly from, unforeseen disruptions, and even to grow by optimising supply chain operations for the long term to increase customer service, market share and financial performance.
For more information on business topics in the United States and Canada, please take a look at the latest edition of Business Chief North America.
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