Optimization of parcel shipping costs is the goal of shippers. Data Analytics is helping shippers achieve this goal. Shipping contract negotiations help in getting the best rates from carriers. Similarly, new shipping software solutions give shippers insights to reduce parcel costs. In this blog, we will discuss the steps required to optimize shipping costs using data analytics.
Importance of analytics in the supply chain industry
There is an increasing demand from customers to deliver their orders on time. In addition, they expect free benefits from shippers. Shippers have to meet these demands and contain expenses. Data analytics is helping shipping companies meet the demand of customers. They can control the information overload by using Analytics. Further, Business Intelligence (BI) tools analyze shipping trends of companies. These tools are helping to improve shipping efficiency and reduce parcel costs.
Five steps to optimize shipping parcel costs
The steps that shippers take to improve shipping costs for parcels are:
1. Monitor performance of shipping carriers and their services
Real-time shipping data helps shippers to understand the performance of shipping carriers. For instance, with the data, they can identify if the parcel’s delivery is on time. Similarly, shipping carriers provide services like Ground, Express, Priority Overnight, and more. With data analytics, shippers can choose the service that will meet their delivery requirements. Audintel suggests alternate low-cost services for small parcel shipping.
2. Understand distribution zone usage
Today, customers are concerned with fast shipping time. So, shippers need to understand the different distribution zones for shipment. They have to consider the distance between the shippers’ location and the customer’s location. Further the packages are shipped, the more it will cost the shippers. Data that understands distribution zone usage is essential. It will determine if the shippers need to outsource the parcel to a central fulfillment center. By making small changes in the carriers operating in distribution zones, shippers can save additional costs. Audintel offers unique software solutions to shippers with discounts depending on zones.
3. Weight of packages
Data analytics gives insights on the way to handle shipments. They help in addressing issues related to parcel weights. Shipping carriers charge for bulk shipments. Combining multiple parcels and of differing weights together in a single package is a cost-effective strategy. DIM divisor influences the pricing of parcel weights. Alternatively, the dimensions of the parcel are more. Then shippers end up paying more for freight shipping. Shippers can reduce dimensional weight by making smaller packages. The dimensional weight analytics provided by Audintel aids clients in saving parcel costs.
4. Monitor special handling and associated fees
Analysis of weekly parcel data gives insights into the additional charges affecting shippers. Evaluation of accessorial fees is necessary to know the charges levied by carriers. In addition, it is vital to monitor the special handling fees. To avoid Residential delivery fees, shippers can use U.S. Postal Services (USPS) as last-mile delivery, thus saving money. Furthermore, Analytics gives shippers the freedom to ask for discounts from carriers. Audintel provides software solutions to help in mitigating the pain points of parcel shipping.
5. Outsource to a third party for contract negotiations
By aligning with a third party, shippers can reduce parcel freight rates substantially. Incidentally, it amounts to up to 40% savings for shippers. Third-party experts can negotiate with carriers like UPS and FedEx for discounts. They have helped in reducing surcharges. In addition, the negotiations done by outsourced experts give a competitive edge to shippers.
Audintel’s role in optimizing shipping costs
Audintel has an evidence-based learning software system. It is a one-of-a-kind software system that evaluates a client’s shipping profile. The experts at Audintel support clients with contract proposals and negotiations. Based on the historical shipment data, Audintel gives suggestions to clients for reducing parcel costs. Audintel helps its client realize its goal of cost-effective negotiations. Shipping data analytics helps its clients adopt long-term and cost-saving services.
Big data analytics is changing the supply chain industry. BI tools help in gathering relevant shipment information, useful for shippers. Analysis of shipping data helps shippers strategize ways to reduce shipping costs.