The capacity to analyze and track parcel spend is more crucial than ever. The costs related to moving parcels from point A to point B can be quickly and effectively controlled and monitored with intelligent parcel spend management software. Shipping more packages is an excellent sign of growing sales, but without careful monitoring, shipping costs can slowly eat into your bottom line. As it turns out, eight out of ten businesses overspend on shipping by an average of 15-20%. With UPS and FedEx both announcing record-high rate increases for 2023, there has never been a necessary time to examine your company’s shipping costs.
With costs rising due to the constantly changing business ecosystem, even the most sophisticated businesses are overpaying to get the extra edge, but they are just leaving money on the table, seriously affecting their bottom line. Carriers are raising the stakes with continuous rate hikes, policy changes, and complex billing systems. In this informative article, we will delve into the challenges businesses face related to their parcel spending and why you need to connect your business with parcel management services.
Challenges Associated with Parcel Spend Management
Optimizing parcel spending poses challenges for businesses, including:
Carriers don’t regulate pricing or maintain transparency. Instead, they independently negotiate contracts with every client, keeping you in the dark about your competitors’ spending. Relying on your own operational KPIs and conventional methods is not enough when you do not fully comprehend the complexity of your contract, how pricing is set, or whether there is room for cost savings. Negotiating lower shipping rates based on your previous contract may seem like a go-to strategy, but if your rates are too high to begin with, you are not getting best-in-the-business pricing. An optimum parcel shipping solution provider working side by side with you might be helpful in this scenario.
Lack of Resources
You may be charged with unwanted accessorial surcharge fees or be eligible for audit rebates you are unaware of. For instance, carriers often make sizable pricing changes before the contracts are termed out. They may also create upcoming surcharges, add fees, or adjust prices on surcharges that are not covered in your contract. When a business ships thousands of parcels daily, it is unrealistic to manually audit every parcel invoice. Most organizations lack the time and resources to monitor invoices and surcharges and observe errors or overcharges manually.
Lack of Expertise
Do you have relevant expertise to effectively analyze a parcel contract, or which elements are negotiable where you can save costs to support your bottom line? Anyone can negotiate savings of 3-4%, but if you are not well-versed in parcel contract negotiations best practices, then you are most probably leaving money on the table. If you are looking for a regional carrier for your small parcel shipping, then you are selecting from thousands of options. That is why you need brilliant parcel spend management software to empower you with complete parcel spending visibility to leverage cost savings and better decision-making.
How an Industry-Leading Parcel Shipping Solution Provider Helps
1. Monitoring Invoices for Errors and Overcharges
Small billing errors eventually add up to significant amounts if they are not caught on time. Outsource invoice monitoring to a solution provider that utilizes automated technology to comb your invoices for service level failures and money-back guarantee opportunities and automatically claims your savings.
2. Negotiating Better Contracts Even Without Changing the Carriers
Changing carriers can cause some major discrepancies among various operational levels of a business. An industry-leading parcel management solution provider can enable you to save costs without even changing your existing carriers. Look for a solution with deep industry experience to analyze carriers’ proposals, compare them to best market pricing, and empower you with the leverage you need to negotiate effectively.
3. Diversifying Your Parcel Carriers to Maximum Agility
In today’s world, you need a perfect blend of shipping carriers to maintain operational flexibility. For example, contracting carriers from various locations can overcome regional challenges, such as supply chain disturbances, labor shortages, and severe weather events. An expert parcel delivery management system can help you optimize spending with your current and future carriers’ service providers and help negotiate contracts and pricing.
4. Actionable Insights to Make Data-Driven Decision
An expert parcel spend intelligence solution that provides data and analytics tools allows you to access detailed, real-time visibility into your shipping spend. Spot trends and monitor KPIs to find areas for more savings and help analyze the bigger picture and make data-driven decisions.
A Solution That Delivers
Optimizing shipping costs is the key to keeping customers happy and costs down in these uncertain economic times. TransImpact’s Parcel Spend Management Software provides end-to-end visibility to maximize your parcel spending strategy and save costs. Our industry-leading experts with vast experience in parcel contract negotiations help our clients save unwanted surcharges and excessive mid-term fees. So, in simple terms, we are in the business of delivering good news to our customers. To understand more about our solutions, talk to our experts or schedule a demo.