Learn why carrier rationalization is replacing diversification and how multi-carrier shipping software provides what today’s shippers need
Imagine juggling a half-dozen different balls in the air – each representing a separate parcel shipping carrier you rely on to deliver your shipments. Sure, it might seem impressive at first – all the flexibility, competitive rates, and backup options. But what if those balls start slipping? What if managing it consumes time, resources, and ultimately, profits?
Welcome to the evolving landscape of multi-carrier shipping. For years, diversifying your carrier mix with a multitude of carriers was the golden rule (with an extra escalation during COVID times), promising a safety net against capacity constraint and disruptions, as well as access to the lowest shipping costs. But as supply chains stretch across the country and competition intensifies, a surprising trend is emerging: less is becoming more.
In this blog, we’ll dive into the shift from carrier diversification to strategic selection, or carrier rationalization. We’ll explore why companies are ditching the juggling act and embracing a focused approach, and how multi-carrier shipping software is guiding this change.
Diversification’s Double-Edged Sword
Remember the juggler from before? Now imagine juggling those carriers while blindfolded. That’s what managing a vast carrier network can feel like – exciting on the surface but loaded with hidden dangers. Spreading your shipments across multiple providers with carrier diversification has offered several attractive benefits:
- The safety net: Spreading your parcels across multiple carriers seemed to immunize you against disruptions, while reliance on a single carrier holds inherent risks. Do you have a backlog with carrier A? No worries, carrier B can pick up the slack!
- The competitive edge: Playing different carriers against each other could potentially unlock access to more competitive shipping rates, stretching your transportation budget further.
- The specialized services: Each carrier has its unique strengths and capabilities. Diversification enables access to each one, like tailored solutions for specific routes, shipment types, or industry needs.
But just like juggling blindfolded, the excitement quickly loses its shine when reality hits. Hint: here’s where the “double-edged” part kicks in:
- Administrative complexity: Managing multiple carriers translates to juggling countless contracts, invoices, and data points. This can be time-consuming and resource-intensive, leaving you low on operational efficiency.
- Weakened partnerships: With so many carrier partners vying for your attention, building strong, collaborative relationships becomes nearly impossible. Not only does this put strain on the relationship, but it could affect service levels.
- Loss of cost control: Negotiating the best rate with so many different carriers is often a complex process, making it difficult to achieve cost transparency and maintain control.
Suddenly, that juggling act doesn’t look so impressive anymore when you have too many options to handle. Balancing flexibility with efficiency has become critical in today’s dynamic parcel shipping landscape. The question is, how do you break free and rediscover control over your shipments?
The Rise of Rationalization and Multi-Carrier Shipping Software’s Strength
With the juggling act of shipping carriers still fresh in your mind, you may be wondering what the next step is. While spreading your bets across many carriers seemed like a win in the past, navigating a multitude of options can indeed become a circus act. Balancing flexibility with efficiency demands a more focused approach.
This doesn’t mean abandoning diversification altogether. Instead, it’s about optimizing your network by carefully selecting partners who truly align with your business needs. This focused approach looks more like a ringleader, standing confidently before his troupe carriers, each moving in sync to deliver your shipments swiftly and accurately. This is the rise of carrier rationalization – a strategic shift from complexity to control which is helping to rewrite the logistics landscape.
Fueled by several key factors, this trend is gaining momentum:
- Cost struggles: As inflation rises and profit margins tighten, companies are looking closer at every dollar spent. Managing multiple carriers, with fragmented data and challenging pricing structures, is no longer sustainable. While reselling can offer discounts, remember that sacrificing direct negotiation leverage can limit your access to even more competitive rates and custom solutions. Rationalization brings focus, enabling deeper analysis and negotiation of rates, leading to greater cost transparency and control.
- Operational difficulties: Lost paperwork, duplicate invoices, and data overload – these are the hidden administrative costs of juggling too many carriers which are draining your efficiency. Rationalization streamlines operations, centralizing data and simplifying processes.
- Partnerships transformed: Strong partnerships are the foundation of a successful supply chain. Foster strong relationships with your chosen carriers, independent of reseller agreements, to unlock benefits like custom rate structures and dedicated support. With a smaller, more strategic carrier network, you can nurture deeper relationships, fostering improved communication, service levels and mutual trust.
But how can you jumpstart this circus act? Multi-carrier shipping software emerges to help guide companies through this evolution. This powerful shipping tool facilitates:
- Data-driven analysis: Identify the carriers that truly resonate with your needs, based on metrics like cost, performance, and reliability (and others!) for a strategic, optimized network. [Learn more about comparing carrier risk factors.]
- Collaborative negotiation: Leverage your consolidated shipping volume while maintaining your discount tier to secure the most competitive rates across your chosen carriers, empowering you to take back control. [Dive deeper into Carrier Volume Balancing.]
- Enable automation: Free yourself from manual tasks with the automation of duties like label generation, creating documentation, invoice management and more. Streamline operational decisions with the automation of complex business rules.
- Enhanced communication: Foster deeper partnerships with your carrier partners through improved communication and data sharing, creating a seamless flow of information.
With this advanced supply chain technology as your guide, you can lead your modernized carrier network to new heights of efficiency, cost control, and customer experience.
The Path Forward: Embrace Rationalization with ProShip
The road to parcel shipping success is paved with strategic choices. You’ve chosen carrier rationalization, the right move in today’s dynamic shipping landscape. Now, it’s time to choose your partner – the one with the proven tools and expertise to turn your reorganized carrier network into a system of cost savings, control, and customer delight.
But escaping the circus act requires more than just streamlining your carrier network. The right technology partner plays a crucial role. Look for a carrier-agnostic vendor who puts your needs first, not their relationships with specific carriers. This ensures you get the best rates and services, regardless of carrier loyalty.
Designed from the ground up for parcel shipping excellence, our versionless multi-carrier software stands as a testament to our commitment to continuous improvement. ProShip empowers you to choose the best carrier options, regardless of reseller agreements, ensuring that your shipping strategy prioritizes your unique needs. Here’s how we’ll empower your rationalization journey:
- Slash shipping costs: Leverage our industry-leading rate shopping to optimize your carrier spend, ensuring that you gain a competitive edge on shipping costs. Go beyond rate shopping with innovative functionality like ProShip’s Advanced Date Shopping, which plans for delivery by using a target date including 9 different data sets.
- Pick from a broad carrier library: Quickly and easily onboard new global, national, regional and final mile carriers seamlessly, ensuring you always have the right options for your business needs.
- Conquer compliance challenges: Navigate complex carrier requirements (and even dangerous goods shipments) with confidence.
- Flex to your unique needs: Customize business rules and adapt functionality to fit your specific industry and workflows. [Discover how to apply business rule logic to your parcel shipping environment.]
ProShip isn’t just a solution, it’s a partnership. We understand your pain points, anticipate challenges, and provide ongoing support every step of the way. Our team of dedicated shipping and IT experts is always in your corner, ensuring your rationalization journey is smooth and successful.
Ready to quit the juggling act and unlock the full potential of your streamlined network? Schedule a personalized Discovery call today. Let’s discuss your specific goals and craft a customized plan that puts ProShip’s power at your service. With ProShip as your partner, the road to parcel shipping success becomes paved with ease, control, and positive customer experiences.