Article: Automating Complex Decisions with Intelligent Parcel Management Systems
By 2027, the global eCommerce market value is expected to reach $6.39 trillion which will continue to drive demand for efficient and cost-effective delivery services to transport goods from businesses to their customers. As a result, more shippers are diversifying their B2C carrier networks and implementing decentralized omnichannel fulfillment strategies.
But this shift in B2C distribution strategy has added a new level of complexity to decision-making regarding where, when, and how to use different carrier services to meet their delivery promises. Unfortunately, shippers struggle with legacy parcel shipping system technical limitations when trying to adapt to today’s complex challenges. Carrier diversification and business rule implementations are often hampered by expensive custom programming and long project timelines. Logistics managers need more control and agility to stay competitive in today’s dynamic B2C delivery environment.
Shippers are now turning to the next generation of parcel shipping management platforms to automate increasingly complex omnichannel eCommerce distribution decisions.
What is an Intelligent Parcel Management System?
Parcel management meant something different a decade ago. Back then, most shippers relied on a single primary carrier with unlimited capacity. There was little need for multi-carrier decision-making. Hard coded business rule scripting helped automate minor decisions. The fundamental purpose of a parcel management system came down to automating label printing.
But today label printing is the bare minimum requirement for parcel management systems. What shippers really need is a way to conquer complexity. A new generation of cloud-native, intelligent parcel management systems make it possible for shippers to achieve the control and insight they need to determine the best carrier services for their evolving distribution requirements. Now, configurable optimization instructions replace the hard-coded, inflexible, and unwieldy scripting that has traditionally limited legacy multi-carrier shipping systems.
Intelligent parcel management software optimizes parcel shipping in three ways: 1) shifting control of routing decision logic from IT programmers to logistics business managers, 2) maximizing the performance of parcel management processing to keep pace with the speed required for modern eCommerce fulfillment, and 3) leveraging intelligence and speed to enable planning optimization and “what if” simulations to assess the impact of those decisions on shipping costs and delivery performance.
3 Ways an Intelligent Parcel Management System Uses Optimization Processes to Streamline Complex Carrier Decisions
Parcel optimization enables shippers to automate data-driven decisions upstream from traditional shipping operations, ensuring the best carrier options are selected in shopping carts, order fulfillment, and packing operations. Here are three ways automation is contributing to better carrier service decisions.
1) Giving More Control to Logistics Managers
With legacy systems, any custom routing rules must be scripted, making IT managers and professional service engineers responsible for customized implementations and changes. This limits logistic managers’ ability to stay competitive within a very dynamic parcel shipping environment.
Intelligent parcel optimization platforms enable logistics managers to configure business rule instructions using wizards and drop downs and then embed and apply those instructions at critical junctures throughout the fulfillment process. This no-code approach to automated decision-making helps shippers shift control of their routing decisions from the IT department to logistics managers where it belongs.
For example, using simple instruction wizards, non-programmers can control complex decision-making from order to delivery, including:
- Qualifying and ranking carriers based on performance (on-time delivery, damage, billing inaccuracies),
- Monitoring real-time routing decisions to avoid unexpected surcharges based on carrier pickup limits,
- Ensuring tiered carrier incentives targets are met,
- Adhering to customer carrier selections, packing, and documentation preferences,
- Making sure that customer delivery promises are made and kept,
- Determining the best pickup origin, based on inventory availability, shipping cost, and delivery promise.
Intelligent parcel management platforms give shippers more day-to-day control over how, when, and where carrier services are used as dictated by inventory availability, shipping capacity and costs, and transit times. What would otherwise take days or weeks for legacy system IT employees to program, logistics managers can accomplish in minutes. This flexibility supports a more adaptive, agile B2C strategy.
2) Parcel Routing & Rating at the Speed of eCommerce
Traditionally, the industry “go-to” for parcel rating has been carrier APIs. But in today’s B2C environment, consumers expect to see more delivery options earlier in their online shopping experience. Logistics managers need to understand the cost and time in transit options available across their omni-channel network. And warehouse fulfillment processes need to determine the most transportation cost-effective shipment plans. All of these require routing instructions and rating across a more diversified carrier network.
Unfortunately, carrier APIs are too slow and unreliable to carry out these processes. Moreover, some carriers prohibit shippers from using their APIs in that way. They will throttle down API access in response to excessive rating requests. As a result, rating APIs cann’t deliver on the need for B2C distribution speed.
By contrast, intelligent parcel management systems feature internal high-speed carrier routing and rating engines that don’t rely on carrier APIs. They allow shippers to process over 7,000 routing instructions and rate calculation per second. Gone are the days of “rate shopping”, these engines open the door for more iterative and intelligent cost/performance comparisons.
In addition, cartonization algorithms determine the most cost-effective and sustainable way to pack cartons in milliseconds, eliminating unexpected dimensional weight adjustments and corrugated waste.
3) Planning Optimization and “What if” Simulation Insights
Legacy shipping systems generally evaluate one order or one shipping transaction at a time. They are unable to look across orders and apply business rules in the aggregate. This limits a logistic manager’s ability to assess what to do on a day-to-day basis.
Because of their ability to apply routing instructions and calculate rates at very high speeds, intelligent parcel management systems open the door to process more data-driven decisions across a wider set of information. This enables order planning optimization and “what if” simulations.
Now, logistics managers can submit orders from their OMS or TMS systems (or waves from their WMS systems), and intelligent parcel management systems can rapidly apply instructions, calculate rates, and instantly return one or more cost-effective parcel shipping plans, including carton packing recommendations. Managers can compare plans and either release the orders to ship or batch process shipments, including parcel carrier label creation.
Instructions could identify zone-skipping or drop-shipping opportunities, consolidating loads into lower cost per pound LTL shipments.
In the same way instructions and rates can be applied against orders, the same process can be applied against shipping history to run “what if” analyses. For example, a shipper could run simulations to compare the impact of new assumptions against actual shipping costs and delivery performance, such as:
- What would the impact have been if we had used a different carrier in these zip codes during peak period? What would have been the cost and delivery impact?
- What if we had shipped those same orders out of a different fulfillment center using a 3PL?
- What if we had used a different set of carton sizes?
- What if we had used the proposed carrier’s new proposed rate increase last year?
Being able to compare order optimization plans and simulations provides managers with data driven insights to make even better decisions.
Conquer Complexity with Intelligent Parcel Management from Sendflex
As eCommerce continues its growth trajectory, B2C shippers using omnichannel distribution need a more data-driven approach to simplify parcel routing and rating. Businesses can optimize their shipping operations by automating decision-making to gain an advantage within the competitive eCommerce marketplace. For growth-minded B2C shippers, a highly configurable intelligent parcel management system is a scalable way to tackle the challenges of managing a diversified carrier network in a volatile eCommerce environment. It’s the best path to optimizing cost, capacity, and customer delivery experiences.
With Sendflex parcel optimization, businesses can finally conquer complexity in an increasingly challenging parcel management environment. To learn more about Sendflex, request a consultation with us today.
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