Sendflex and Maergo Help Shippers Diversify Carrier Services Without Sacrificing Incentives

This article illustrates how this diversification challenge can be addressed using Sendflex's parcel TMS platform. We will explore how shippers can use a cost-effective parcel zone-skipping service like Maergo while simultaneously maintaining essential primary carrier incentives.

The Power of Primary Carrier Incentives: Challenges to Diversification

As the convenience of online shopping and home delivery continues to redefine supply chains, retailers hoping to benefit from a wider network of parcel carriers are faced with significant challenges. Integrating alternative carriers' systems is among the most formidable hurdles, as established, legacy carriers offer sophisticated IT infrastructures and reliable, secure, and swift APIs for rating, shipping, and tracking packages. Despite advancements by regional and local carriers in automation, the integration process remains a significant concern for many shippers, since many legacy parcel shipping systems were never designed to handle new integrations without substantial IT investments. Additionally, the scale of major carrier capacity is enormous, capable of handling volumes in a day that alternative carriers might only be able to manage in a year. As a result, high-volume shippers will almost always need to engage the services of a major carrier.

That’s why the risk of losing primary carrier incentives ranks as the most imposing obstacle to carrier diversification. These painstakingly negotiated incentives are critical to managing shipping costs and are contingent on meeting specific transportation spend commitments. Routing shipments across a more diversified range of alternative carriers poses a legitimate financial dilemma.

Legacy shipping systems were never designed to balance carrier diversification with the need to protect primary carrier incentives. Doing so requires a sophisticated approach that goes beyond simple rate shopping and carrier label printing. Sendflex represents the next generation of parcel management technology that helps shippers automate decision-making in more complex eCommerce fulfillment environments.

Streamlining Carrier Selection: Sendflex's Advanced Parcel TMS

Sendflex Parcel TMS seamlessly integrates with a wide range of carriers, from global giants to local couriers, facilitating effortless carrier network expansion. Sendflex also features a no-code parcel optimization engine designed to automate complex carrier selection processes.

To address the diversification vs. incentive challenge, Sendflex monitors primary carrier contract compliance in real time, only diverting shipping volumes to other carrier services when primary contract incentive levels are satisfied. This allows shippers to explore and employ alternative carriers confidently, safe in the knowledge that their primary agreements remain beneficial.

In addition, Sendflex’s high-speed optimization engine opens the door to iterative simulation and planning capabilities, enabling shippers to test and then operationalize intelligent decision-making throughout order allocation, fulfillment, and shipping processes.

With these capabilities, Sendflex positions shippers to effectively manage risks in an increasingly competitive eCommerce delivery market.

To illustrate how Sendflex parcel TMS platform can be used to address the incentive vs. diversification challenges, let’s take a closer look at a practical use case with Sendflex’s partner, Maergo, a parcel zone skip service.

Sendflex at Work: Intelligent, Balanced Diversification

Sendflex's parcel TMS simulation tool revolutionizes the way shippers approach carrier diversification. Maergo is a good example of how that works. In this video, you can see how Sendflex runs simulation models to compare a UPS-only strategy against a combined UPS and Maergo approach with optimization instructions that ensure UPS incentives are achieved. The Sendflex process is simple yet very powerful:

• Select the orders and initiate the planning with a “Create Plan” click.
• Configure the carriers and business rules, including pickup/shipping locations, carriers under consideration, and specific instructions such as maximum transit time, weight restrictions, delivery areas, and carrier incentive plans.
• In our example, the plan is for shipments from a Dallas facility, considering UPS and Maergo as carriers, with guidelines for only 2-day deliveries, a 50-pound weight limit on orders routed through Maergo, and adherence to UPS incentives.
• Run the plan, and Sendflex delineates the most efficient and cost-effective routing strategy, ensuring that orders are allocated to Maergo only after UPS’s incentive thresholds are achieved.
• Compare plans to visualize the savings. Where a UPS-exclusive plan might rely on costly express services for 2-day deliveries beyond zone 5, incorporating Maergo can offer ground rate pricing for these deliveries, facilitating notable cost savings.

The result? Significant savings using Maergo to achieve 2-3 day delivery anywhere in the US at the equivalent of ground pricing, while still maintaining UPS contract incentives.

This is yet another example of how Sendflex parcel optimization tools empower shippers to make informed, strategic decisions that balance cost, efficiency, and carrier incentive compliance. It's a testament to the platform's ability to navigate the complexities of modern parcel shipping with agility and insight.

Unlocking Smarter Shipping Decisions with Sendflex

The Maergo use case is but a glimpse into the transformative potential of Sendflex parcel TMS for achieving smarter, faster shipping decisions. By leveraging advanced technology to maintain crucial carrier incentives while exploring cost-effective, diversified shipping strategies, Sendflex sets a new standard for logistical efficiency. [Insert Maergo quote here about the value Sendflex brings to them and their shipper customers] For a deeper dive into how Sendflex can optimize your shipping operations and explore tailored solutions for your business needs, we invite you to schedule a consultation with our experts today.

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