Parcel growth will continue to rise at a rate of 17%-28% each year between 2017 and 2021, and by 2020, same-day delivery will drive up logistics costs as a percentage of revenue by 50% (Source: Gartner, October 2017).
For most omnichannel businesses, the cost of shipping now exceeds the sum of all the other fulfillment costs including direct and indirect payroll, benefits, facilities and utilities, packing supplies, etc. Businesses need every advantage they can get to hopefully evaluate, reduce or control the rate of shipping expense increases.
“Earlier generations of shipping and manifesting systems did not have much functionality other than weighing packages, generating labels and manifests. But today’s shipping systems have great functionalities that some businesses have not explored in order to help with controlling current and future shipping costs,” says Taylor Pawelka, Product Marketing Manager, ProShip, Inc., an enterprise shipping system solution.
From consulting with omnichannel companies, we feel there many benefits for your business. New generation systems have rate shopping, the preparation of international documentation, analysis of shipping data and enterprise-wide control from multi-locations including DCs, stores and suppliers are accelerating shipping costs. All in all, there are many features to consider.
Features and Functional Requirements
As you consider the many shipping and manifesting software vendor offerings, here are 20 considerations and questions for features, requirements and support. Obviously, small to moderate sized businesses will not have the same requirements as an omnichannel, international retailer.
Considerations for Shipping
- What are the throughput requirements (packages per hour and day) for your distribution network for all locations? Take into account all types of documents and packages from all locations including stores, warehouses and drop shipments from manufacturers and suppliers.
- How can best-way shipping benefit your customer service and reduce costs based on shipping rates, service levels and delivery time?
- What real-time business rules for shipping and manifesting can you, or should you, implement?
- Carrier compliance is extremely important. Which solutions provide immediate support for rate changes, updates and creation of all labels and documents including HAZMAT, manifests and international?
- Does the solution have address validation to reduce carrier charges for undeliverable addresses and residential deliveries erroneously classified as commercial? If not, how will you support this need?
- How fast does the system rate shop and generate labels?
- What processes can be eliminated from your existing shipping and manifesting environment to make it less manual, more efficient and speed up the packages shipped per hour?
- Does the solution support multi-carton orders that require different carriers and service levels (e.g. LTL and expedited package on one order)?
- Does the solution produce customs-related documents including certificate of origin, commercial invoices and shipper export declaration? Is it certified for ACE (AES) Direct Filings? See https://www.cbp.gov/trade/automated for more information.
- Does the solution handle both shipping to and shipping from other countries around the world? Can it support international carriers?
- As you grow, can the solution scale with you? Can it scale from one workstation to an enterprise-wide solution? What functionality can be added to the installed system that will help your company grow and change? What is the additional cost for these new functions?
- Could it support centralized manifesting, versus doing it at each pack station? Could it be automated to eliminate people from the manifesting process?
Customer Service Related
- Does the solution provide complete trace and trace ability both internally and externally? Does it allow complete order visibility to the customer and answer questions about package status and destination?
- How intuitive is the user interface (i.e. ease of use)?
- What integration requirements are there to your Order Management Solution (OMS), ERP and Warehouse Management Systems (WMS)? Does the solution have these integrations?
- What technology do you need to accommodate for in terms of bar code reading, weighing scales and automation?
- Consider the implementation expertise of the software providers. How turnkey will implementation of this system be? What responsibilities will you have?
- How do software updates work? Are there automated updates, such as new system releases and features?
- What is the overall support process? Does the solution provide 24/7 support?
Data Analysis and Reporting
- What reports are available in terms of analytics and audit? What other data is accessible?
- Is there a dashboard of key shipping metrics?
Like any other systems project, document your user requirements. Then develop a Request for Proposal, sending it to a short list of qualified vendors you believe can meet your requirements. Analyze the vendor responses and invite the two or three best candidates to go through the demonstration phase and deep dive of the features, benefits and pricing.
Selecting a highly functional shipping and manifesting system may be one of the very best ways to deal with the continual escalation of shipping costs.
Note: F. Curtis Barry & Company does not endorse any systems vendors. In our client studies we believe in objective, multi-vendor bidding process. We thank ProShip, an enterprise system vendor, for their input to this blog. ProShip offers the throughput, carrier compliance and support required by large-volume, enterprise shipping operations, integrating with regional, national and international parcel carriers.