Legacy vs. Cloud-Native Parcel Microservice Architectures

In the ever-evolving world of parcel logistics, things are getting more complicated every day. With high shipment volumes, increasing customer expectations, and a wider array of carrier service options, old, clunky legacy parcel shipping systems can't keep up. These legacy systems were simply never built to handle today’s level of complexity. Just consider that the Pitney Bowes Shipping Index reported 687 parcels shipped every second in 2023, highlighting the immense scale and demand modern parcel solutions must manage.

Enter cloud-native parcel microservice architectures. These modern systems are incredibly flexible and agile, allowing businesses to adapt quickly to changes and disruptions. This blog will break down the key differences between legacy and cloud-native parcel systems and explain why making the switch is crucial for protecting margins and meeting today's customer delivery demands.

The Evolution of Parcel Shipping Technology

Parcel shipping technology has come a long way from the days of single-carrier sourcing. The rise of eCommerce has led to increased parcel volumes, diversified carrier services, and demanding customer delivery expectations, necessitating more sophisticated systems. Legacy parcel shipping systems, while functional for printing labels at the end of a conveyor belt, do little else to address growing parcel logistics complexity. They struggle to adapt quickly to ever-changing omni-channel fulfillment demands.

Cloud-native microservices architectures are transforming supply chain automation technology with unmatched scalability, security, and adaptability. These modern systems break down complex applications into manageable microservices services, allowing businesses to scale operations and adapt cost-effective solutions to changing conditions more quickly. This modular approach means that versionless updates and improvements can be made without disrupting operations, enhancing overall efficiency and reliability.

The final mile is the most costly segment of the order-to-delivery process. The shift from legacy PC-based shipping technology to cloud-native microservices architectures has created a foundation for the new generation of parcel TMS platforms. Logistics managers now have the tools to optimize, control, and unify cost-effective processes in digital storefronts, order allocation, and fulfillment.

Legacy Parcel Shipping System Limitations

Legacy parcel shipping systems primarily focus on printing labels for multiple carriers without any upstream considerations or features like planning, simulations, high-speed rating, or shipping optimization. Built as a single, tightly integrated unit, these monolithic systems embed all components and functionalities within the same codebase. This architecture presents significant challenges in updating or scaling individual components, leading to slower deployment and limited adaptability. Moreover, they often rely on outdated technology, making them less compatible with modern cloud-native tools. They often require extensive and costly modifications to accommodate even the simplest business requirements.

A closer look at the limitations of this antiquated architecture model further reveals why they are insufficient for today’s complex parcel environment:

• Rigid Business Rule Inflexibility and Cost: Legacy systems suffer from rigidity due to tightly coupled components, making it difficult to scale individual elements without impacting the entire system. This essentially creates a technological lock-in, with custom programming requiring extensive time and resources. This architecture simply does not allow business users to make changes to adapt quickly to dynamic supply chain conditions.
• Limited Scalability and Failover: Legacy systems' tightly integrated nature hampers their ability to scale as shipping demands fluctuate. Accommodating higher loads during peak shipping seasons requires manual intervention to stand up additional servers. Legacy systems also lack the ability to make automatic adjustments to varying workloads. What’s more, these systems also lack multi-region failover capabilities, making it difficult to switch to backup systems during failures or overloads, which can lead to significant operational disruptions.
• Slower Deployment & Updates: Monolithic software applications typically have longer development cycles and slower deployment processes. Updating, testing, and deploying the entire application for even minor changes or new features can result in extensive lead times, slowing innovation and responsiveness to market demands.
• Higher Maintenance & Operational Costs: Maintaining and operating legacy parcel shipping systems is costly and time-consuming, especially when trying to cloud-enable PC-based architectures that were never intended for deployment in those environments. Issue identification and resolutions increase both downtime and disruption risks. Constant manual intervention for scaling, testing, and deploying updates further adds to the operational complexity and cost.
• Complex Integrations with Modern Tech: Designed before the widespread adoption of cloud technologies and APIs, legacy systems struggle to integrate modern tools and services. This lack of interoperability limits an organization’s ability to innovate and respond to market demands, putting them at a competitive disadvantage.

Legacy parcel shipping systems, while once adequate, now present significant barriers to efficiency and adaptability. The limitations inherent in their architecture highlight the need for modern, cloud-native solutions to stay competitive and meet today’s demands.

Advantages of Cloud-Native Microservice Parcel TMS Solutions

Cloud-native microservices-based architectures represent a major advancement in parcel shipping technology. These modern systems break down software applications into smaller, independent components or services that can be developed, deployed, and automatically scaled independently. This allows for greater flexibility, faster time to benefit, and enhanced scalability. By fully leveraging cloud computing resources, cloud-native applications deliver better performance, cost efficiency, and easier integration with modern technologies.

Automatic Scaling and Failover

One of the standout features of next-generation Parcel TMS solutions is their ability to handle scaling and failover. Elasticity is crucial for managing the supply chain’s unpredictable demand fluctuations and, unlike unwieldy monolithic architectures, microservices can scale up or down to meet varying demands without extensive human intervention. This flexibility ensures efficient handling of holiday seasons and other peak period loads while reducing resources and operational costs during slower times. Additionally, robust failover capabilities ensure seamless and immediate switching to backup systems during failures, minimizing operational disruptions.

No-code Business Rule Configurability

Cloud-native microservice-based parcel TMS architectures empower non-programmers to configure decision trees easily, automating complex decision-making in shipping, fulfillment, order allocation, and digital storefronts. Using no-code instructions, logistics managers and other business users can quickly set up configurations that would otherwise take programmers weeks to develop, test, and deploy. This is especially important as more shippers opt to diversify parcel carrier networks for greater agility and to meet various customer delivery expectations. Having the ability to implement new rules, such as carrier service selections, customer preferences, cartonization, and cost controls with minimal coding expertise is critical in today’s dynamic supply chain environments.

Faster Deployment & Continuous Innovation

With cloud-native microservices, development teams can work on individual components independently, enabling faster development cycles and more frequent updates. Versionless and continuous parcel TMS deployment capabilities ensure software applications remain current, receiving non-disruptive updates with zero scheduled downtime. This ultimately leads to significant resource savings and allows organizations to focus on innovation and enhancing customer experiences, ensuring they always have the latest features to drive efficiency and deliver top-notch service.

Easier Integration with Existing Systems & Workflows

Cloud-native parcel TMS solutions seamlessly connect and integrate with other cloud-based services and APIs, making incorporating new technologies into existing supply chain ecosystems easier. This flexibility allows for the gradual adoption of new tech, enhancing interoperability and streamlining business processes. A unified microservice-based system ensures smoother operations, real-time data sharing, and advanced decision-making capabilities, leading to a more cohesive and efficient supply chain.

Advanced Rating & Simulation Features

Cloud-native microservice architectures can support more high-speed, in-platform rating capabilities that significantly enhance the efficiency of carrier service “shopping.” Parcel TMS platforms incorporate optimization engines that can process thousands of carrier rates, transit times, and business rule instructions per second, without having to rely on slow and unreliable carrier rating APIs.

High-speed parcel TMS systems open the door to optimization planning and "what if" simulations. These virtual simulation capabilities allow shippers to model the impact of various strategies on cost and delivery performance without the need for costly real-world pilots. Logistics managers can simulate scenarios like using a regional carrier, managing pickup limits during peak seasons, adjusting inventory of carton sizes, or assessing the impact of General Rate Increases (GRIs). The information from these simulations helps ensure that decision-making is proactive and data-driven.

Embracing cloud-native microservice architectures is about leading the charge in innovation. These cutting-edge systems lay the foundation for future advancements and help forward-thinking shippers drive growth and stay ahead in an ever-evolving industry.

Discover the Future of Parcel Shipping with Sendflex

The Sendflex Parcel TMS platform takes parcel shipping to the next level with its cloud-native microservices architecture. Featuring no-code business rule configurability, high-speed rating, and powerful "what if" simulations, Sendflex enables logistics managers to make smarter, faster decisions. Seamlessly integrating with modern tools and APIs, Sendflex ensures your operations are efficient, adaptable, and ready for the future.

Ready to revolutionize your parcel shipping? Schedule a consultation with Sendflex today to see how this innovative solution can help you reduce costs, improve delivery performance, and stay ahead in the competitive parcel logistics environment.

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