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Your Position: Home - Electronic Components & Supplies - Why is a parcel shipping transport management system important?

Why is a parcel shipping transport management system important?

Intelligent parcel transport management is vital and it really does pay for companies to invest in parcel transport transport management systems (TMS).

Whether you are a retailer, manufacturer or 3PL, scaling parcel shipments has always been a daunting challenge.

Companies contract with one or two domestic carriers, and logistics teams manually enter orders into local carrier workstations to produce labels and documentation that meet the carrier’s requirements.

This meant that as parcel volumes expanded and demand for same-day and next-day delivery spiked, the company had little ability to rate shops and even less ability to execute.

There is no end to this dynamic. As Bloomberg News summarized in a recent article on the Amazon-FedEx delivery dispute, “The common denominator for all involved at …… is an ever-increasing flood of packages and greater pressure on profits.”

There is no escaping the reality that smart parcel shipping management is vital and that it really is worthwhile for companies to invest in a parcel shipping transport management system (TMS).

The proof is in the numbers. According to the Wall Street Journal, total logistics spending rose to a record nearly $1.5 trillion in 2017, up 6.2% year-over-year and about $250 billion more than companies spent on logistics in 2008.

On average, at Logistyx we find that it costs companies at least 10% more to manage shipments without using a TMS for parcel deliveries than it does with a TMS. This adds up to significant savings — in terms of hard dollars as well as week after week of labour and time saved.

With the parcel shipping market expected to see record-breaking growth in 2019, now is the time for companies to invest in order to control their parcel shipping spend. When at least 60% of a company’s total shipping volume is parcels, a TMS for parcel shipping is an essential technology.

What is a TMS for parcel shipments?

A TMS for parcel shipments has two main functions: planning and execution. The planning phase begins with the calculation of overall carrier rates and ends with the selection of carriers and the consolidation of parcels based on factors such as the shipper’s business rules, the customer’s delivery preferences and stock location.

The execution phase includes everything from printing shipping labels and documents to ensuring that delivery commitments are carried out. Basically, if you need to ship a parcel from point A to point B, or even from point C to point D, the TMS for parcel shipping will handle all of this and more.

Why is TMS for parcel deliveries important?

Market factors, such as the increasing demand for omnichannel distribution Rapidly growing e-commerce order volumes have changed the way companies operate, requiring them to support faster order fulfilment processes, millions of parcel delivery variants, unlimited supply chain workflows and more global customer profiles.

In addition, demand for same-day/next-day delivery continues to grow and carrier services are expanding. Top management is under increasing pressure to reduce net cost of goods arrival and labour costs.

End-to-end order fulfilment data is trapped in silos. Companies are trying to navigate this new market and they need a robust software solution to succeed.

Implementation is unlikely to happen soon

Any efficiencies achieved in the distribution model can help companies successfully navigate these new market dynamics, and shippers who can invest in TMS for their parcel shipping systems are more likely to control overall shipping costs and improve customer satisfaction.

With the right TMS solution, modern companies are eliminating multiple steps in the order fulfilment process, optimising carrier service options, synchronising shipping data across business-critical systems and making significant gains in on-time, full delivery — all of which help them compete in an ever-changing marketplace.





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