Reduce Shipping Costs with a Transportation Management Execution System

Use Multiple Carriers

Using multiple vendors for sourcing commodity products is a recommended business practice to mitigate risk, create a competitive environment of optimal pricing, and take advantage of each vendor’s strength.

This same principle also applies to using common parcel carriers like UPS®, FedEx®, DHL, USPS® and many other carriers that specialize in regional and international markets. However, shippers are made to believe they are getting the best deal when using a single-source carrier. Best-in-class companies use multiple carriers and automate the selection of those carriers through a multi-carrier transportation execution system.

Below are some of the advantages achieved by using multiple carriers and automated TME shipments:

1. Using a Single Carrier Involves Greater Risk – The adage of “putting all of your eggs in onebasket” regarding using a single carrier will always increase risk because of the inability tochange carriers or service levels quickly. Single-carrier relationships may look good at theoutset, but over time there is no motivation for the carrier (supplier) to excel in service orpricing because the relationship lacks a competitive impetus.
2. Multiple Transportation Modes – Most shippers today will have more than one mode oftransportation (parcel, LTL freight, international, private fleet, etc.). Those shippers not using aTME system will use multiple systems or manual systems to tender packages to a carrier. ATME will allow these modes to be planned and executed from a comprehensive system which,in turn, will increase efficiencies through common processes, a single-user interface,automated rating for better carrier selection, and more. of shipping to the customer.
3. Rate Shopping – Using the computer to rate shipments and compare those rates to othercarriers for the same weight, destination and delivery times is a common feature of a multi-carrier TME. Best practices would include shopping rates and selecting the optimal carrier forthe shipment at the time the order is received instead of doing this later in the process, thusalleviating constraints that may occur during the actual shipping process. Again, withoutmultiple carriers competing for your business, this valuable function is not attained. Mostsystems can shop between parcel and LTL freight modes.
4. Carrier Compliance – The common parcel carriers today have stringent requirements inmeeting their compliance programs for all their service levels (next-day, express, ground, COD,etc.). These compliance programs address all facets of the shipping process from rating,creation of proprietary bar coding, EDI transmission of shipping manifests, and track-and-tracefunctionality to name a few. Carriers have certification programs like FedEx with their “CertifiedSolution Provider” (CSP) process. Shippers can find TME providers that adhere the certificationprograms, including the CSP program through FedEx.

TME system vendors that have certifications with carriers will assure the shipper of meeting those complex standards. In return, the shipper will now have a library of carriers and service levels to choose from, facilitating the best way of shipping to the customer.