For most omnichannel businesses, the cost of shipping now exceeds the sum of all other fulfillment costs, including direct and indirect payroll, employee benefits, utilities and facilities, and packaging supplies. Businesses need every possible benefit to assess, reduce, or control the rate of increase in shipping costs.
The growth of parcel shipping will continue to increase at a rate of 17% to 28% each year between 2017 and 2021, and by 2020 same day delivery will lead to a 50% increase in logistics costs as a percentage. in revenue, according to recent Gartner analysis.
Consulting with omnichannel companies, we believe there are many business benefits in a software shipping system. Many today offer rate purchasing, international documentation preparation, shipping data analysis, and enterprise-wide control from multiple locations, including distribution centers, stores and suppliers. These systems help control the acceleration of shipping costs.
Features and functional requirements
When you consider the many vendors offering shipping software, here are 20 considerations and questions covering features, requirements, and support. Obviously, small and medium businesses will not have the same requirements as an international business or retailer.
What are the throughput requirements (packets per hour and per day) for your distribution network, including all locations? Consider all types of documents and packages from all locations including stores, warehouses, and drop shipments from manufacturers and suppliers.
- How can “best” shipping benefit customer service and reduce costs based on shipping rates, service levels and delivery times?
- What real-time business rules for shipping and manifest can you enforce?
- Carrier compliance is extremely important. What solutions provide immediate assistance for rate changes, updates, and creation of labels and documents, including hazardous materials, manifests, and international shipments?
- Does the solution have address validation to reduce shipping costs for undeliverable and residential addresses mistakenly classified as business?
- How quickly does the system assess purchases and generate labels?
- What processes can be eliminated from your existing shipping and manifest environment to make it less manual and more efficient, and to speed up packages shipped on time?
- Does the solution support multi-case orders that require different carriers and service levels, such as LTL and expedited packages on a single order?
International maritime transport
- Does it produce any customs-related documents including certificate of origin, commercial invoices and a shipper’s export declaration? Is it certified for ACE direct deposits?
- Does the solution manage shipments to and from other countries? Can it support international carriers?
- As you grow, can the solution scale from one workstation to the entire company? What features can be added to help your business grow and change? What are the additional costs?
Does the solution offer full tracking and traceability capability both internally and externally? Does it allow full visibility of the order to the customer, including questions about the status and destination of the package?
- Is the user interface intuitive?
- What are the integration requirements for your OMS, ERP and WMS systems?
- What technology do you need to support things like barcode scanning, scales, and automation?
- Consider the implementation expertise of software vendors. What will be the key to the implementation? What responsibilities will you have?
- How do software updates work? Are new versions and features of the system updated automatically?
- What is the overall support process? Is it 24/7?
Data analysis and reports
- What reports are available in terms of analysis and audit? What other data is accessible?
- Is there a dashboard that gives you a management console view of key shipping metrics?
As with any other system project, document your requirements and issue a RFP to a short list of qualified vendors who you think can meet them. Analyze the responses and invite the top 2-3 candidates to go through the demo phase, including an in-depth review of features, functions, benefits, and pricing.
Selecting a highly functional shipping software system can be one of the best ways to deal with the continuing escalation in shipping costs.
Brian Barry is President of F. Curtis Barry & Company