Updated: May 13
A Few Key Tips to Help You Make a Good Decision
There are thousands, maybe millions, of tips out there regarding cutting shipping costs, contract negotiation, rate shopping, etc. As I’ve recommended in previous articles, pricing and carrier rate negotiations should be the last thing on your to-do list. Here are some suggestions to keep in mind during your shipping software shopping adventure!
First and foremost, make sure your vendor of choice completely understands your:
Current and future sales channels
Current and future products
Current parcel/LTL carriers, volumes and spend
Current order/shipping process
Current pain points
Make sure their software solves all your current problems. We all like getting a good deal but don’t let a good deal blind your good judgment. You will be living with their software every day for several years so you need to make sure it covers all your current needs now and can grow with you to handle all future needs.
Does the software you are considering offer all the tools important to your shipping success?
High-quality multi-carrier shipping software has easy to use configuration tools that allow you to easily add business automation rules to compliment your existing process and make it better.
If you’re getting a good deal on software that forces you to change your process to adapt to its requirements, has minimal customization options or takes an IT expert to update, run (don’t walk) away from this option.
Does the shipping software you’re considering offer all the visibility and powerful reporting you need to manage your entire shipping process onsite and remotely?
Does their proposed pricing include these critically important items you need for long-term success, service charge management and visibility?
All your current parcel and LTL carriers?
Deep discounts on LTL shipments, regardless of weight or volume?
Powerful and detailed shipment reporting design module?
All professional host integration service costs included, with a max cap?
Annual software maintenance agreement and live support pricing?
UPS/FedEx bill auditing services?
Low-cost parcel and LTL insurance?
Never assume shipping upgrades will make up for flaws in your manufacturing and inventory controls.
For example, manufacturing is late to ship, and inventory is low for the required delivery date. Consequently, you decide to upgrade to 2-day air to make sure the product arrives on time and destroy your profit margins. New shipping software can’t solve this problem.
Shipping cost optimization requires that your new software KNOWS the carriers and services available based on all your shipping locations, product types, sales channels and, most importantly, required delivery date. High-quality shipping software makes quick work of all these scenarios:
1 ounce to 15.999-ounce parcels is a perfect fit for this carrier and service level.
1 to 4-pound parcels should always go with this carrier and service level.
Parcels going to zones 2 through 4 are exactly what these carriers love.
Shipments zone, 5 through 8, should always go with one of these two carriers.
LTL shipments are auto-rate shopped for the best rate and auto-dispatched.
Inbound, outbound and drop-shipment rating to cover all your bases.
If you’re not using this carrier for international parcels, you’re losing lots of money.
Once you classify all shipments and projected market segments, you are ready for contract negotiations.
No matter how complicated you think your distribution matrix is, it is all just math when it comes right down to it.
Your high-quality shipping software vendor should also offer rate bidding and rate negotiation services to help you get all the discounts you deserve.
Shipping cost optimization is a balancing act between your customer’s expectations, time in transit and overall costs, including all those “gotcha” post shipping service charges.
Implementing a solid shipping process is your main goal, not buying shipping software.
Your vendor of choice should focus on helping you establish a technology framework that optimizes your shipping costs with detailed shipment reporting at a granular level.
Your vendor should help you use data-driven analytics to create the correct mix of carriers and services for your specific products and sales channels.
If required, your vendor should also be able to provide you with a detailed LTL freight analysis that compares 25 to 30 recent LTL shipment costs to what their new system will offer with line item details.
When you follow these simple steps and tips, you will enjoy a smooth installation, avoid post-sale “gotcha” fees, significantly reduce your annual shipping spend and, most importantly, have all the reporting visibility you need to understand your carrier bills. Of course, you will also be able to offer this same detailed visibility and shipment status reporting to all your customers, and in the end, that's what your shipping software shopping project is all about.
Good Luck and Good Shipping!