| Cut high-volume shipping costs by 25%
| Cut high-volume shipping costs by 25%
Our industry-leading, proprietary technology analyzes your historic shipping data to uncover savings opportunities. We’ll help you secure a new carrier agreement all without changing carriers or service levels. We’re so good, we guarantee it.
On average, our customers achieve 20-30% in measurable cost savings within the first 4-6 weeks of engagement.
There’s a lot more to parcel shipping—especially in a high-volume context—than the basic UPS or FedEx rates. While some companies might be content to ask their selected carrier “what’s it going to cost?” and then pay that sum, they’re missing out on the type of invaluable savings recouped by companies that leverage shipping insights and analytics to optimize their spending and get the best shipping rates possible.
Shipping insights and analytics can help your business answer questions like:
If you at any point last year found yourself asking, “Why are shipping rates so high in 2022?”, then you’re undoubtedly wondering the same about 2023 and beyond.
One reason parcel shipping rates have climbed to their current levels is due to routine carrier rate increases and peak season surcharges. In 2023, UPS and FedEx each raised their rates:
These rates represent averages. You can expect variations based on parcel kind, carrier method (ground, air, etc.), and industry.
It’s important to note that these rate increases began to happen BEFORE the war with Russia and Ukraine, which is putting incredible pressure on Oil and Gas markets, increasing the likelihood that rates may climb even more in the years to come.
There’s little reason to believe annual rate increases won’t continue. That being said, once you understand what you’re up against when trying to manage your carrier contract—and what insights and analytics you could have on your side—you’ll be in a much better position to secure better rates.
Recent McKinsey research suggests there may be some relief if and when we get the COVID-19 pandemic under control. This unprecedented public health crisis understandably put more strain on shipping companies and carriers. There is hope that the future of the shipping industry after Covid will be a more affordable one. First, though, supply chains will need to catch up.
Unsurprisingly, parcel carriers are just as driven to optimize costs as you are. A few examples of how parcel carriers tend to have the upper hand in the average rate negotiation scenario include:
In too many cases, however, the carrier simply has the upper hand in that they’re more familiar with the granular details of your shipping data and what it means than you are. Without an understanding of the details of your own shipping history and trends in the data, you’re letting the carrier occupy the driver’s seat. You’re trusting them to put their interests aside to promise you what they’ll position as a great rate.
This underscores the importance of having insights and analytics on your side when it comes to invoice auditing, contract management, and more. In short, you can’t improve what you can’t detect.
While it’s easy to get bogged down in contract terms and the granular details, there are larger trends at play that will also inevitably impact shipping rates. By pairing an understanding of your shipping rates and contract details with an understanding of larger industry trends, you can start thinking about the relevant shipping insights and analytics applicable to your particular situation. So, how has technology changed the shipping industry? What might the future look like? Here are a few trends to be aware of:
What follows are the top trends impacting the parcel shipping industry right now:
With the growth of eCommerce—further fueled by the COVID-19 pandemic— the general demand for parcel delivery continues to surge as well. Even UPS and FedEx are finding themselves more frequently “at capacity” (or dealing with a driver shortage) and in a position where they can decline new contracts. Between the major carriers’ ability to be more selective in the contracts they take on, and the emergence of smaller, independent carriers willing and able to take on some of the business (“gig economy” carriers), shippers are wise to do their due diligence in considering their options.
Applications of artificial intelligence in the shipping industry are wide-ranging and always evolving. AI features can collect and leverage strong data sets to more accurately predict and track shipping times, identify and mitigate inefficiencies in core business processes, strengthen security, and more. With so many (literally) moving parts involved in the supply chain—even in the shipping stage alone—AI can not only provide crucial insights and analytics, but suggest logical actions in response.
Autonomous cars and trucks will eventually become normalized within the parcel shipping industry, cutting costs by eliminating the need for an entire workforce of (human) drivers to make deliveries. In fact, Forbes predicts that automation in the shipping industry will enable delivery within 30 minutes of order processing in many cases.
When COVID-19 struck supply chains across the nation and globe, shipping companies found themselves dealing with unprecedented logistics problems to solve. In many cases, shippers are developing innovative, efficient, and cost-saving solutions to keep shipments moving. When companies can adjust inventory management processes based on quality data—eCommerce, logistics, and inventory performance data, for example—they can feel confident that they’ve made data-backed decisions rather than trusting their gut.
As eCommerce continues to grow more prominent, increasing shipping volume and demand, something else also goes up: the number of products that need to be returned to the stores and suppliers they were sent from. Stores and companies can scale up their return capabilities by analyzing the data around returns, in order to predict and accept the volume of returns without costs getting out of hand.
This trend is a more literal interpretation of “shipping insights,”in which shippers can track carriers and monitor deliveries in near real-time—including the condition of parcels as they reach their destination. These capabilities mean shippers and carriers can both be in the know, keep tabs on priority shipments, and make sure the outcomes (completed deliveries) meet expectations. The easier tracking and monitoring become, the easier it is for shippers to make sure their carrier is meeting their contractual obligations.
Taking a wide view of the technological innovations in the shipping industry, there is a digital transformation underway that is making it even more important for shippers to comprehend their own shipping data and how it relates to the terms of their carrier contracts.
“Digital transformation” is a general term that can refer to many different things. For example, among the exciting innovations McKinsey research identifies as “the next normal” of parcel delivery, like autonomous delivery of small parcels via drone, and the development of autonomous trucks. Data analytics infuse the entire supply chain management process, helping modern companies to better meet their customers’ evolving needs and preferences. By investing in new software, shippers can streamline order fulfillment and save costs, helping them keep up with the competition.
At the heart of the digital transformation is data—Big Data.
At the root of these innovations and technological advancements is one vital currency: data. Whether you’re trying to perform invoice audits, prepare for carrier contract management, or better understand the competitive landscape and trends impacting the parcel shipping industry, you’ll need to have a grasp of Big Data.
By definition, Big Data refers to “extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions.” It’s not just a mountain of data—it represents a mountain of potential new insights.
More specifically, Big Data is often discussed in terms of the three V’s:
SAS Analytics adds two additional V’s to the mix:
When it comes to the specifics of how modern companies can leverage Big Data in shipping, the first consideration is the quality of the data. Just because a mountain of data can be (or has been) collected, it’s only as useful as it is timely and accurate. Garbage in, garbage out, as they say.
For a full picture of shipping insights and analytics, Big Data (good Big Data) is essential. When it meets the 5 V’s of Big Data—or you partner with a company like ShipSigma who specializes in these types of insights and data—it can be used to make smart and timely business decisions.
Several different terms categorize the types of data to be considered when seeking out insights and analytics that can help maximize shippers’ return on investment.
A carrier contract’s bottom line only tells part of the story. To ensure you’re getting rates that are in line with the market, here are a few specific factors to know about that affect parcel shipping costs:
Other key performance indicators that illuminate different aspects of shipping that can help ensure that carrier agreements are upheld and deliveries are occurring as expected:
Another specific type of insights and analytics relevant to the parcel shipping industry is business analytics. In simple terms, business analytics refers to the use of data to identify and solve inefficiencies and other challenges.
Paying attention to business analytics helps to contextualize shipping performance through shipping cost analysis. Among the most important metrics to consider as components of cost analysis include:
Each of these dimensions of business analytics in shipping can help you better understand, manage, and optimize your shipping spend.
As part of the digital transformation of the logistics, supply chain, and shipping industries, one specific type of data analytics in the shipping industry is especially useful in the context of invoice auditing and contract management—predictive analytics.
Building on the foundation of past and real-time data tracking to derive performance insights, predictive analytics goes a step further by providing anticipatory logistics. This way, shippers and carriers can make any adjustments necessary to ensure that not only current needs are being met, but future needs as well.
Within the larger logistics industry, predictive analytics is considered to have the biggest overall impact on the supply chain’s performance—and this was the case even before the COVID-19 pandemic brought awareness to the importance of anticipatory logistics.
A recent study by the Council of Supply Chain Management Professionals revealed that:
It’s no wonder that predictive analytics is a hot topic for 2022 and beyond—especially when you consider how it helps shippers reduce parcel shipping costs and prevent shipping breakdowns.
Without the ability to project future costs with some accuracy, shippers are left operating under the dicey proposition of counting on the past to simply repeat itself. The past doesn’t tend to repeat itself, though. Three distinct applications of predictive analytics that can be leveraged to help identify areas for cost-saving include:
When shipping breakdowns occur, for any reason, shippers can find themselves scrambling for solutions. Another benefit of predictive analytics is the ability to mitigate problems before they cause a shipping breakdown. By keeping an eye on real-time analysis and real-time responses (as discussed above), shipping companies can identify early problems—whether bottlenecks or other inefficiencies—and mitigate them before a few delivery delays lead to a full-fledged shipping breakdown.
With the right software, shipping companies can use predictive analytics to collect, optimize, and normalize data; engage with and act on real-time analytics; and better understand and communicate with shipping and carrier partners.
Shipping analytics software collects data from a variety of sources including a company’s own records, normalizes and validates the data, and enables shipping managers to make timely decisions based on predictive analytics.
An innovative shipping insights and analytics platform like ParcelZilla leverages an extensive network of data to provide unmatched insights and cost-saving recommendations. This foundation adds a layer of visibility and transparency to the behind-the-scenes data science in the shipping industry. also perform ParcelZilla’s predictive rate simulation and cost modeling, uncovering actionable insights to streamline processes and realize cost savings.
Two highly-effective ways to leverage Big Data analytics software to realize cost savings are through invoice auditing and contract management.
ParcelZilla has fully automated the audit and reporting processes, reducing the cost of every shipment with instant savings (no long-term contract required). Through the use of AI, invoice auditing is made easy: the platform automatically scans invoices, submits and verifies claims, and provides automatic savings.
Learn more about what goes into ParcelZilla’s parcel invoice audit capabilities.
ParcelZilla’’s contract negotiation services help shippers cut parcel shipping costs without having to do a thing. AI enables the platform to guarantee savings through a transparent process. You’ll know what you can save before any negotiations occur—with precise figures, not estimates.
Learn more about how ParcelZilla can transform your carrier contract negotiation.
Contact us today to learn more about how we can provide the shipping insights and analytics that will save you money today.
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