Blog Posts Overcoming the Challenges of Small Parcel Shipping


Struggling to meet consumers’ heightened delivery expectations in the face of increasing parcel shipping costs? If you sell online, this is an inescapable conundrum with major implications on the success of your business. In fact, 91 percent of shoppers will abandon an online retailer if shipping isn’t free or fast enough, according to a recent study by Pitney Bowes.

With so much on the line, many companies recognize the need for expert guidance when it comes to handling their small parcel shipments. Saddle Creek’s new whitepaper explores today’s parcel shipping challenges and looks at ways in which 3PLs can help companies to better manage through them.

Following is an excerpt from The Rising Role of 3PLs in Parcel.

How a 3PL Can Help

Companies often seek out a partner to help navigate the complex parcel shipping landscape. An experienced 3PL can provide valuable support in a number of areas:

Carrier management

A third-party provider can be a valuable resource for carrier management. They will have established relationships with numerous carriers and be knowledgeable regarding pricing considerations (i.e., origin point, distribution/volume, transit speed, minimum rate, surcharges, dimensional weight, etc.). They can simultaneously shop for the best rates and help companies to determine the impact of rate increases and surcharges. Their cumulative volume gives them buying power and the ability to secure discounts off of list rates.

Information support

3PLs can provide critical data to help guide shipping decisions. Using manual or automated tools, 3PLs can help companies to obtain valuable business intelligence without a significant overhead investment. Comparing carrier performance, analyzing demand distribution data, and providing time-in-transit reports are frequent requests.

Third-party providers can also serve as a much-needed liaison between carriers and a company’s information technology team. They are able to maintain and manage parcel manifesting systems, manage API calls, ensure labeling accuracy and compliance and more.

Network optimization

An experienced 3PL can recommend an optimal network configuration, helping to move products to areas where demand is greatest. This often allows companies to utilize ground transportation instead of expedited service and, thereby, reduce freight costs. A 3PL also is likely to have facilities in strategic locations, so companies can avoid the expense of establishing their own brick-and-mortar distribution centers.

Packaging expertise

To minimize the impact of dimensional weight rates, 3PLs can analyze key variables such as package weight, cube information, shipping frequency, etc. With extensive expertise and knowledge of best practices, they can recommend ways to increase packaging density efficiency in order to be more cost-conscious.

Financial support

Knowledgeable 3PLs can build and maintain tools to invoice efficiently and accurately. They can automate billing to simplify and speed the process. Processing carriers weekly minimizes accounting accruals for month-end true-ups. 3PLs can also audit activities on accounts to validate charges, ensuring that rates and discounts are applied accurately, service levels are provided as billed, etc. Outsourcing these functions frees up time for companies to focus on their core competencies.

To learn more, download the whitepaper.