/ By Varsity Shipping Specialists / Carriers • Customer Experience • E-Commerce • Retail • Varsity Logistics/ / 0 Comments

7 Benefits of Carrier Diversification

Learn how carrier diversification reduces costs, improves customer satisfaction, and more.

Everyone’s familiar with the saying, “Don’t put all your eggs in one basket”. The expression is a warning against concentrating all your resources or efforts into one place or thing. When relying too heavily on a single option, you potentially put everything at risk in the event of a crisis. Although this time-worn phrase dates back to the 1600’s or earlier, it still remains applicable to an abundance of situations, including your shipping strategy.

An effective way to apply this advice to your shipping strategy is by diversifying your carrier mix. This provides shippers with carrier options in the event of a supply chain disruption. The saying became especially relevant in the logistics world after the pandemic struck, causing a spike in e-commerce, disruptions in carrier networks, shifting consumer behavior, and more.

7 Reasons to Implement a Carrier Diversification Strategy

Post pandemic, in today’s rapidly evolving shipping landscape, supply chain innovation and adaptability are essential. Still, amidst times of changing consumer expectations, dynamic market conditions, labor unrest and other unforeseen circumstances, businesses are realizing that carrier diversification is a key driver of success. If you are looking to inject flexibility into your shipping processes, mitigate risks, enhance service coverage, and unlock new opportunities, then carrier diversification is a strategy to put in place. Here are seven ways having more than one major carrier can benefit your business:

1. Carrier Diversification Reduces Risk

Relying on a single carrier can pose risks such as service disruptions due to weather, labor strikes, or unforeseen circumstances. By diversifying carriers, you reduce the risk of shipping disruptions having a devastating effect on your business by distributing shipping volumes across several providers. Additionally, with an advanced multi-carrier shipping solution, if one carrier experiences an issue, you can seamlessly switch to an alternative carrier. This redundancy helps to continue the flow of goods, ensure timely delivery and business continuity, and minimize the impact on your shipping operations.

2. Carrier Diversification Increases Flexibility and Scalability

By integrating multiple carriers into your shipping software, you gain the flexibility and scalability to adapt to evolving market conditions, shifting consumer preferences, and seasonal demands. It allows you to find the best carrier suitable for specific needs on a shipment-to-shipment basis, based on factors such as cost, transit time, destination, and service level. This agility allows you to optimize your shipping operations and handle fluctuations in consumer demands efficiently.

3. Carrier Diversification Uncovers Competitive Shipping Rates

Competitive Shipping Rates: Carrier diversification enables you to compare shipping rates across multiple providers. Each carrier may offer different pricing structures, discounts, or negotiated rates based on several favors like your shipping volume, destination, or time in transit. By having options, you can identify the most cost-effective shipping solutions for your business, potentially reducing shipping expenses and passing along those savings to retailers as well.

4. Carrier Diversification Improves Geographic Coverage

Incorporating different carriers into your shipping software allows businesses access to a broader network of delivery routes and service areas. Individual carriers typically have strengths in certain regions whether that be local, regional, or international. By diversifying carriers, you can expand your shipping reach to more areas and access markets that might be underserved by a single carrier. This allows you to leverage your established expertise in different geographic locations while also growing your business. Carrier diversification helps you reach a wider customer base and opens the door to entering new markets with confidence.

5. Carrier Diversification Improves Service Levels

Different carriers have their strengths and weaknesses, such as specific routes, delivery networks, or specialized services. By diversifying carriers, you can fill the gaps in areas where some carriers might be as efficient. This allows you to tap into each carrier’s unique strengths and select the option that best aligns with your specific shipping requirements. This can result in faster delivery times, higher customer satisfaction, and overall improved service levels.

6. Carrier Diversification Empowers Negotiation

When you have multiple carriers integrated into your shipping software, it strengthens your position during carrier negotiations. You can leverage competition among carriers to compare rates or service capabilities. Carriers may also be more likely to offer you discounts, customized solutions, or other attractive incentives to secure or maintain your business. Overall, negotiation allows businesses to vouch for more favorable pricing, contractual agreements, and value-added services.

7. Carrier Diversification Improves Customer Satisfaction

Every business has the goal to provide an exceptional customer experience- after all, it’s what builds brand loyalty and customer trust. By expanding your carrier library, you increase customization abilities, flexibility, and other great options for customers. It also allows for the selection of carriers based on factors like reliability, delivery speed, and geographic range that best aligns with your customer’s needs. With higher consumer expectations surrounding deliveries today, customers appreciate carriers who can get them their goods in a safe and timely manner.

How Carrier Diversification Facilitates Growth

Overall, diversifying your carrier mix offers a variety of benefits for businesses navigating the ever-evolving world of supply chain and logistics. This strategy enables greater flexibility, improved service levels, cost optimization, risk mitigation, expanded market reach, negotiation power, and increased customer satisfaction. Integrating multiple carriers provides operational redundancy, allowing businesses backup options in the event of disruptions and other unforeseen circumstances. Additionally, carrier diversification creates the opportunity for businesses to expand their reach, enter new markets, or those that may be under serviced. Embracing a carrier diversification strategy is imperative and empowers businesses to construct resilient, streamlined, and customer-focused operations in a constantly evolving marketplace.

Need help getting started with a carrier diversification strategy or shipping software? Contact our experts today to discover how Varsity Logistics can improve the way your business does shipping.

/ By Varsity Shipping Specialists / Varsity Logistics • E-Commerce • IBMi • Shipping Software • TMS/ / 0 Comments

Shipping in a Post-Covid World: What You Need to Know

When it comes to shipping, the pandemic changed everything. Here is how to remain successful in a post-pandemic world.

COVID-19 caused an incredible shift in consumer and business purchasing that nobody could have foreseen coming. From traditional in-store buying behavior, to on-line purchasing, nothing will ever be the same.

This includes the world of shipping, and thus, the world of shipping software. What are the major issues the shipping industry in particular is facing moving forward? Let’s look at some of the highlights.

3 Major Shifts in the Shipping Industry

Although the pandemic impacted every aspect of shipping, we’ve identified 3 majors shifts in shipping.

Customer Expectations

Throughout the pandemic, both B2C and B2B customer expectations dramatically changed. Consumers not only prefer, they now demand:

  • Easy on-line ordering
  • Shorter order processing time
  • Up-to-date, accurate communication about order status
  • More (and cheaper or free!) shipping options – in fact, according to BigCommerce, 90 percent of consumers now say free freight is the #1 influencer to get them to buy*

The simple fact is, most consumers are becoming accustomed to an “Amazon style” experience.

Carrier Demand

Parcel carriers don’t have enough capacity to keep up during peak periods.

Shipping Costs

Across the board, shipping costs and carrier surcharges are at an all-time high, with no signs of slowing down.

E-Commerce Sales

In 2019, e-commerce sales made up about 11 percent of total retail sales. By Q2 2020, that number jumped to a record-breaking 16 percent.

Carrier Capacity

The pandemic brought on a demand not seen since the 1997 UPS strike. The 2020 holiday season saw a peak that, for the first time in decades, resulted in supply exceeding demand. Volume restrictions left many high-volume shippers scrambling to find reliable alternatives to their normal UPS or FedEx shipping carriers. The result of this fallout was widespread. Costs to ship went up exponentially, and some shippers began exploring regional parcel carriers to offset costs.

Major pain points related to carrier capacity:

  • Carriers added COVID-related surcharges and peak shipping fees
  • Shippers started seeking last-mile delivery alternatives (USPS, DHL, or courier services)
  • Guaranteed deliveries cancelled
  • Lengthier estimated delivery times

How to Manage Your Shipping Costs

Auditing carrier bills is now more important than ever. Two increasingly important components of estimating shipping costs include validating shipment addresses and managing oversized shipments. Other peak surcharges by major parcel carriers might include:

  • Jan 17, 2021 to July 3, 2021
    • $3.00 additional handling per package surcharges
    • $31.45 per item Large Package Surcharge
  • July 4, 2021 to October 2, 2021
    • $3.50 additional handling per package surcharges
    • $40.00 per item Large Package Surcharge
  • October 3, 2021 to January 15, 2022
    • $6.00 additional handling per package surcharges
    • $60.00 per item Large Package Surcharge
    • Over maximum limits will incur a $250.00 surcharge

How Consumer and Shipper Expectations Have Changed

The pandemic resulted in a dramatic shift in consumer behavior. They now have new expectations, such as wanting shipping rates and options that are clear, upfront and easy-to-find (both online and at point of order). They also expect as a standard:

  • Shipment confirmation emails
  • Detailed tracking info
  • Real-time tracking capabilities
  • Short delivery times
  • Free or discounted shipping 

How Varsity Modules Can Help Your Shipping Costs

Varsity’s modular system can optimize your entire package logistics process, including address standardization, rate shopping, shipping and tracking.

Varsity sets you up for success in this new shipping landscape. We can help you:

Calculate or shop freight charges at order entry or on your website
IMPACT: Reduce freight costs; increase eCommerce sale opportunities

Compare or shop various LTL and Parcel carrier rates/services from within your ERP
IMPACT: Reduce freight costs

Unlimited number of parcel & LTL carriers can be added
IMPACT: Reduce risk of carrier capacity issues risk

Audit parcel bills in house to check for a multitude of carrier add-on surcharges
IMPACT: Reduce freight costs

Increase packing/shipping throughput with optional advanced work-flows like printing shipping labels at the point of packing or picking
IMPACT: Reduce labor costs by increasing efficiency

Automatically send shipping confirmation emails with tracking numbers
IMPACT: Help meet customer expectations; reduce customer service calls

Optimize shipments (containerization) – Let Varsity calculate the best way to pack the order based on minimizing oversize charges and overall freight cost
IMPACT: Reduce freight costs

Take advantage of deep integration within your ERP/WMS – Varsity runs inside of your present system
IMPACT: Increase efficiency

Allow for reporting against shipping data company wide
IMPACT: Make informed decisions on freight policies

Visibility to shipping information to anyone in the organization that has an iSeries/AS400 sign-on
IMPACT: Reduce customer issue resolution time

Shipping Software ROI

The power of Varsity speaks for itself. The benefits Varsity customers see in terms of a return on their investment are clear:

  • Increase shipping through-put
  • Audit parcel and freight bills in-house
  • Allocate accurate freight cost by order, customer, freight program, etc
  • Automate international paperwork
  • Rate shop & rate quote from within your ERP/WMS
  • Optimize shipments
  • Enable e-commerce

Ready to realize your shipping software ROI with Varsity?  Request a demo with a Varsity Shipping Specialist to learn how our software can optimize your shipping program today.

/ By Varsity Shipping Specialists / Carriers • 3PL/Distribution • Customer Experience • E-Commerce • Manufacturing • Parcel • Retail • Shipping Software • Technology/ / 0 Comments

Zone Skipping: Will it Work For Your Business?

Learn how zone skipping can save money on shipping costs while improving customer experience.

Logistics operators looking to reduce transportation costs and improve transit time might want to consider Zone Skipping, a logistics technique that consolidates individual packages and ships them directly to a parcel carrier’s induction hub that’s closer in proximity to the final destination points of the consolidated packages.

How does Zone Skipping work?

Let’s say you’re shipping 5,000 parcels from Oklahoma City to Detroit at $10 each in shipping costs, which means a grand total of $50,000. The flat rate, however, is $5,000 if they all arrive in a truck. From there, shipping the individual parcels from the Detroit sorting facility will cost $7 per parcel. So, if you add the $5,000 flat rate shipment with the $7 per parcel for local delivery, the total shipping will equal $40,000 — A $10,000 savings compared to using the parcel carrier for shipping the parcels individually.

How can Zone Skipping benefit my business?

Here are 4 ways that that zone skipping can improve the way you ship parcel.

Cost Savings

As explained above, by relying on local delivery for the final zone, operators will cut costs which they then can pass onto their customers. (The savings come from eliminating multiple sort and transfer points.) The saving will not just save your company significant money on shipping, but it will earn you customer loyalty based on a faster delivery time.

Faster Transit Times

Zone Skipping means parcels no longer have to crisscross the country to multiple sorting facilities before they reach where they need to go. Now parcels will go directly to the destination via local carriers. The faster delivery times could allow you more time to accumulate additional package volume when building your zone skipping loads.

Greater E-commerce Capabilities

As e-commerce continue to dominate online retail, operations that get parcels directly to consumers without hassle will be leading the pack. Consumers now have increased expectations for how long an order will show up on their doorstep. Zone Skipping is tailor-made for meeting those immediate needs.

Fewer chances for damaged packages

Another reason why Zone Skipping is good for customer loyalty is because it reduces product damages. This is because it eliminates the number of sorting and consolidation steps performed by the parcel carrier. The fewer hands touching the packages, the greater the chances it won’t be dropped, dented, or damaged.

What do I need to implement Zone Skipping?

Here are 3 things to do before you implement a zone skipping strategy.

Evaluate the areas you serve

Zone Skipping is only cost-effective if you routinely have a large number of parcels going to the same area. How many orders are headed to the same region? How many steps are in your shipping process? Remember, the more steps reduced, the greater the cost savings to your business. Having a system that allows you to turn zone skipping on/off based on current volume is ideal.

Evaluate your internal infrastructure

You’ll need software that can handle the increased capacity requirements that result from Zone Skipping. Because of volume, Zone Skipping may overly burden a more traditional system, which could reduce efficiency and increase labor costs. So make sure your software is still capable of delivering ROI within this new process.

Open a dialogue with your local parcel carriers

These are the people you’ll rely on to make Zone Skipping a success. Partnering with local carriers to design a Zone Skipping strategy is critical in making sure your plan will work. While a reduction in sorting/shipping on your part ultimately reduces the amount they can charge you, good parcel carriers will realize that the increased volume is a significant win on their end.

Zone Skipping with Varsity Shipping Software

Zone Skipping is an effective way to reduce shipping costs and improve customer experience. Discover all the ways Varsity multi-carrier shipping software can improve your parcel processes by scheduling a demo with one of our shipping specialists today.

/ By Varsity Shipping Specialists / Shipping Software • 3PL/Distribution • E-Commerce • Manufacturing • Retail/ / 0 Comments

6 Ways Warehouses Can Save Money By Going Green

Learn how making sustainability a priority can deliver more than just green results.

The warehouse and logistics industries are not immune to the potential savings generated from “going green.” Eco-friendly warehousing may require upfront dollars, but some strategies, like greater recycling, are free. Besides benefiting the environment, the objective is long-term cost savings. Warehouses that embrace the following six practices will discover efficiencies in their operation that are sustainable over time.

Tips for Eco-Friendly Warehouse Improvements

Here are 6 helpful tips for implementing green improvements in your warehouse.

Sustainable Lighting

LED lighting solutions, as well as other advanced lighting technologies, can cut as much as 80 percent from the bottom line, according to Inbound Logistics. Retrofitting your warehouse with LEDs will have upfront costs but considering that they cost much less to operate and the time for replacement is limited, you’ll save both energy and labor costs.

Smarter Identification

Multi-level warehouse rack labels, long-range retroreflective signs, and a greater volume of hanging signage speeds up picking for your workers, which helps cut down labor costs while speeding up order fulfillment.

Smarter Facility Layouts

Using data gained through asset tracking, warehouses can reduce labor and energy costs by redesigning their layouts so the fastest-moving inventory is more accessible than inventory that tends to sit the longest. Warehouses can also make greater use of vertical space. Taking a new look at their space could lead to efficiencies that you hadn’t even considered before.

Explore Energy Management

How efficient are your heating and cooling systems? What about how water is distributed throughout your facility? Are you using low-flow toilets and faucets? It might be worth it to check out energy management systems that integrate the timers, thermostats, and gauges that control the electricity, gas, heat, and water. The right eco-friendly system will help lower overall usage, which leads to savings costs.

Purchase Energy Efficient Equipment

Now that automation is becoming more commonplace in the warehouse and logistics space, what about other equipment that your operations relies on. For example, have you considered electric forklifts that operate without the need for gas and oil? What about other battery- or electric-powered vehicles? According to PBD Worldwide, electric forklifts improve worker health (no toxic fumes to inhale) and result in an estimated savings of $26,000 in propane over five years!

Recycle

This is the low-hanging fruit of going green. Warehouses need to implement recycling initiatives that they can ultimately profit from. What can be recycled? Nearly everything. That includes pallets, crates, totes, cardboard, paper, aluminum, and plastics. Waste can be minimized by reusing packaging materials. But no matter the volume of waste you produce, someone will pay you for taking it off your hands.

How Shipping Software Contributes to Going Green

Shipping software automates shipping, streamlining processes that were once riddled with manual tasks. By automating your parcel shipping process, you’ll remove issues like shipping to invalid addresses, returned shipments, missing shipping dates and more. Every package shipped incorrectly adds time-in-transit, reprinting labels and shipping packages multiple times.

Discover other ways Varsity shipping software can improve your parcel shipping processes by scheduling a demo with one of our shipping specialists today.

/ By Varsity Shipping Specialists / 3PL/Distribution • E-Commerce • Parcel • Retail • Supply Chain/Logistics/ / 0 Comments

3PLs Booming from Stronger Economy, E-Commerce, Space Shortage

A new report reveals the increasingly important role 3PLs are playing in shipping

The third-party logistics (3PL) market is going strong according to a June 2018 report released by Armstrong & Associates, a market research firm located in Milwaukee.

About This 3PL Report

The report found that 2017 net revenues in the U.S. rose to $77.1 billion in 2017, a 5% increase from the previous year. Gross revenues reached $184.3 million, a nearly 11% increase. The net revenue increase repeats a year-to-year pattern of single-digit growth.

Armstrong & Associates Chairman Dick Armstrong said in a statement that 2018 net revenue will likely reach 5%, with gross revenue closer to 10%. “It should be a good year overall,” he said.

The segment largely responsible for the steady growth is Dedicated Contract Carriage (DCC) revenue, which increased 10% in 2017, above its steady annual growth rate of 7% since 1995. Increasing rates and limited truck capacity has helped maintain growth in the DCC segment.

Other segments that were strong last were included:

  • Domestic Transportation Management (DTM). Gross revenues spiked 16% to $72 billion; net revenues were up 6% to $11 billion.
  • International Transportation Management (ITM). Gross revenues climbed nearly 11% due to tight air freight capacity and the growth in global e-commerce. Net revenues increased 4%. 
  • Value-added Warehousing and Distribution (VAWD). Both gross revenue and net revenue were each up nearly 3% due to tight warehouse capacity across the U.S.

Varsity Logistics integrates with IBM i (AS/400) systems to deliver powerful shipping capabilities to 3PLs and beyond. Request a demo of Varsity Logistics multi-carrier shipping software to learn more today.

/ By Varsity Shipping Specialists / E-Commerce • Supply Chain/Logistics • Technology • TMS/ / 0 Comments

Analysis Shows Shippers Like TMS for E-Commerce, ROI, and Speed

TMS is an important part of your company’s technology stack. Here are 3 trends that support that.

For companies routing multi-stop full trailer shipments, a transportation management system (TMS) is necessary to optimize the FTL and LTL components of the supply chain. TMS gives operators the ability to map out route planning, handle freight audit, track payments and orders, and manage carrier and route selection in ways that generate efficiencies that result in lowered costs and increased customer satisfaction.

A study published by Logistics Management in January examined the state of the TMS market and found trends that portend the industry’s future and also show why it provides the best collaboration among shippers, carriers, and customers. Let’s take a look at these trends.

A Closer Look at TMS Trends

E-commerce driving growth

As more companies expand more of their retail strategy to e-commerce, the more shippers turn to TMS to strengthen their supply chain management. This is particularly true for shippers that spend more than $100 million per year on freight. TMS investment is a preferred solution because it can help move a high volume of goods with greater speed and efficiency than traditional methods.

Return on Investment seen as beneficial

For companies of all sizes, Logistics Management says that the return of investment (ROI) is also one of the most appealing features.

Companies saw an 8 percent savings when they use TMS, which users attribute to three key features: multi-stop route optimization, load consolidation, and simulation and network design. Sixty percent of the companies that saved money said that less than 10 percent of the net savings was absorbed by the TMS itself.

A need for speed remains

TMS operators tend to purchase the system for its optimization, but what they find is that speed is among its greatest assets. The immediacy that TMS naturally generates in providing real-time tracking and reports, as well as a better managed inventory flow, is what customers ultimately notice on their end. Which means that customer satisfaction is strengthened, resulting in continued business in the future.

Looking for a TMS Solution for the IBM i (AS/400) Platform? Let’s Talk.

Discover the #1 multi-carrier shipping solution for IBM systems – Varsity Logistics. Request a Demo today to learn how our robust shipping software can optimize your shipping strategy today.