September 19, 2009
Warehouses that ship small parcels are different than the other types of shippers that I have discussed so far. They ship a much higher volume of packages, from hundreds to thousands of parcels a day. They can be manufacturers, distributors, or third-party logistics companies (3PL). A 3PL is a company that provides outsourced logistics services (more about 3PL’s in a future post).
Small parcels are packages that weigh less than 150 pounds and are typically shipped with UPS, FedEx, DHL, Regional Carriers ( Lone Star Overnight, Eastern Connection, OnTrac,), and the US Post Office. Parcel shippers may also be Less-Than-Truckload (LTL) shippers or full truckload shippers. The way parcels are processed is very different than LTL shipments. Each parcel has a separate tracking number and label. A LTL shipment is usually a pallet with many boxes and shrink-wrapped. The pallet is shipped as a single unit.
Companies that ship small packages send them directly to consumers (business to consumer or B2C) or to businesses (B2B).
Examples of B2C shippers include the following:
- books (Amazon.com)
- apparel and accessories(LandsEnd, Zappos)
- gift baskets and mail order (Harry and David)
- sporting goods (Callaway, TaylorMade)
- electronics (Best Buy)
- medical supplies (Liberty Medical)
- computers (Dell, Apple)
- drugs, vitamins (CVS,GNC)
Examples of B2B include the following:
- industrial supplies (Grainger)
- pharmaceuticals (Merk)
- automotive supplies (Michelin)
- office supplies (Staples)
- fasteners, bolts, rivets (Fastenal)
- electrical components (Westinghouse, Allied)
- industrial valves (Asco, Kingston)
- industrial chemicals (Dow, BASF)
Because of the sheer volume of packages that a typical warehouse sends, these shippers tend to be very sophisticated. Throughput and accuracy are the most important attributes that they look for in processing. Features that warehouse shippers look for include the following:
- Multiple user processing
- Integration with Enterprise Resource Planning (ERP) or Warehouse Management Systems (WMS)
- Business rules
- Error checking
- Mode optimization
- Integration with material handling systems, such as conveyors, scales, label printers
- International processing capabilities
I will be discussing many of these software features in future posts, so stay tuned.
August 8, 2009
The fifth category of parcel shippers is an Internet Retailer. This could be a SOHO with a website that markets products over the internet or a power seller on eBay. It could also be a retail store that also markets their products online. The difference here is volume. Internet Retailers ship every day. Volumes can range from a dozen packages to a hundred plus parcels a day. Technology becomes critical to making their lives easier. They utilize programs like Blackthorne Pro, Auctiva, and Channel Advisor to automate their auctions, images, orders, and fulfillment. When it comes to shipping, technology that can increase productivity is important. The following are features and functionality that appeals to Internet Retailers:
- Internet Retailers want shipping functionality integrated with the software that they use to process orders. They don’t want to have to type or cut and paste shipping addresses from one software program into another.
- The ideal shipping technology provides the most cost effective service and carrier for each package. This can be accomplished through business rules or comparing prices based on delivery requirements.
- The capacity to ship with multiple carriers. These shippers realize that no carrier is the least expensive in all categories. They want to be able to ship with several carriers. They need to print USPS First Class, Priority Mail and Media Mail labels with Delivery Confirmation. They want PC Postage capabilities and also need to be able to ship packages via UPS, DHL, and FedEx.
- Technology that can cut costs and eliminate errors is valued such as features like address validation and checking whether or not an address is a residence or business that can reduce accessorial charges.
- The ability to ship parcels to international locations is essential.
- Batch processing is indispensable. Internet Retailers want to be able to produce shipping labels in mass rather than one at a time.
- The capacity to have multiple users is significant; this is the first category that may have employees to help in the shipping process.
- Tracking of packages is important to this segment; they are committed to customer service and want to easily respond to customer inquiries; they want to know when a package was delivered.
- Internet Retailers also want to pro-actively notify their customers when a package has shipped, the carrier, and the tracking number. They want shipping software that can send an email automatically to a customer with all the details.
- Finally, the Internet Retailer wants reports on shipping volume, average weight per package, average cost per package, dollars spent for each service and carrier, and so forth.