Parcel Is a Crucial Value-Add in the Evolution of the TMS
The growing requirements and demands placed on shippers and logistics service providers have pushed transportation management systems to become more agile and able to support greater service levels and cover multiple modes—especially parcel.
Q. Why is parcel gaining attention now?
A. Shippers and LSPs want to streamline connectivity and communications with their parcel providers. Accurate rating is one of their greatest challenges. Throughout my conversations with logistics executives, they regularly cite carrier invoices returning with a higher fee than what was quoted. The inability to recoup these costs amid already thinning margins is detrimental to the bottom line.
The driver shortage is also driving interest in parcel. With numbers exceeding 80,000 from 61,000 in three years, securing carriers for bulk orders is proving to be more difficult. Organizationsare deconsolidating larger orders to pull enough product and meet their customers' demands and delivery requirements to avoid losing the whole order—or worse, losing the client due to limited capacity.
Because this workaround is expensive, it's crucial for teams to save on efficiencies and logistics costs where they can, such as through seamless rate shopping and rate management.
Q. Has it gotten easier to work with parcel providers—and why?
A. Parcel providers—both tier 1 players like FedEx, UPS, and DHL, as well as the surging regional and super regional providers—have become much easier to work with. Most parcel providers are willing to work within API connectivity in lieu of third-party providers who are still working with EDI or XML. As a result, TMS software providers with robust, underlying data models can offer extended functionality such as rate shopping, real-time tracking, and reporting and analytics.
Q. How is effective parcel management a critical advantage?
A. Today, communication between parcel providers and clients can be much more thorough, not only from a visibility perspective, but also enabling greater cost control. Using a multi-modal TMS that incorporates parcel, organizations can now assess the true cost of a shipment, including services requested and accessorial requirements, and get real-time tracking and accurate rating.
When managers have to enter their parameters and rate shop for each and every carrier across dozens of websites, then handle processes like pickup, track and trace, and invoicing via carrier portals or even by phone or email, these inefficiencies rack up a lot of time and money—especially when invoices don't match the initial quote.
That's why parcel via TMS is becoming a real game-changer. Teams can rate shop, execute, track and trace, audit, and pay all within one platform regardless of the mode, leg, or partner they're dealing with. The transportation management system will also flag unexpected charges (detention charges, inside delivery, beyond charges, sort and segregate, etc.) and create detailed line items that make it easy for finance to audit, saving valuable time and money.