Unlocking Success in Parcel Shipping: The Midsize Business Guide
Unlocking Success in Parcel Shipping: The Midsize Business Guide
Parcel shipping may seem straightforward, but behind the scenes, it's a complex and competitive business. Midsize companies, in particular, face unique challenges that can result in higher costs, manual errors, and a lack of control over their shipping operations. However, as parcel shipping continues to grow, there are solutions to these problems that can help midsize businesses thrive in this demanding landscape.
The Rising Tide of Parcel Shipping
The United States is expected to see parcel volume reach a staggering 28 billion by 2028. The e-commerce boom shows no signs of slowing down, and increased costs accompany this surge in demand. Notably, the recent averted UPS strike means that FedEx and UPS will likely continue aggressive pricing strategies to secure their market share. So, what's a midsize shipping company to do?
Challenges Faced by Midsize Organizations
Let's dive into the critical challenges faced by midsize businesses and explore some potential solutions:
- Increasing Costs: Rising carrier rates and unexpected accessorial fees can significantly impact a company's bottom line. High shipping costs can lead to shopping cart abandonment and hinder business growth.
- Human Error: Manual tracking and management of parcel shipments are prone to errors. From improper tendering of shipments to miscalculations of dimensional weight, these manual processes can be costly and inefficient.
- Duopoly Control: The UPS and FedEx duopoly dominates the market, making it difficult for midsize organizations to negotiate better rates or gain visibility into pricing alternatives. Plus, these carriers need to notify shippers when refunds are due readily.
The Solution: Partner with a 3PL
The solution to these challenges lies in partnering with a third-party logistics (3PL) provider specializing in parcel shipping. Here's how they can help:
- Cost Savings: 3PLs can leverage their expertise and technology to negotiate better rates, optimize shipping routes, and reduce accessorial fees. This frees up capital for core business activities.
- Expertise and Technology: Parcel shipping is a complex field, and 3PLs are experts. They constantly update their processes and technologies to stay competitive, providing clients with cutting-edge tools and industry knowledge.
- Data Insights: With access to comprehensive data and data scientists to analyze it, 3PLs help midsize companies gain a deeper understanding of their shipping costs, allowing for data-driven decision-making.
- Improved Customer Satisfaction: Outsourcing logistics can lead to faster and more reliable deliveries, fewer errors, and higher customer satisfaction, giving your business a competitive edge.
Tailoring the Solution to Your Needs
Logistics outsourcing isn't a one-size-fits-all solution. Companies should carefully assess their unique needs before partnering with a 3PL. However, when timed and executed correctly, logistics outsourcing offers scalability, cost savings, access to expertise and technology, improved customer satisfaction, risk mitigation, and a sharper focus on core competencies.
Final Thoughts
In today's rapidly evolving supply chain environment, optimizing your parcel shipping strategies is essential for staying ahead of the competition. If you want to reduce costs, gain a competitive edge, and thrive despite market turbulence, consider working with an outsourced parcel shipping 3PL. It's a smart move that can help your midsize business flourish in the dynamic world of parcel shipping.
