Running a company isn’t easy. Despite making up 99.9% of all businesses across the country, small businesses can struggle to find their footing in a market strongly influenced by large corporations. At last count, an SMB Retail Supply Chain survey revealed that 35% of SMB retailers are paying more than 20% more for shipping now than 12 months ago. Small shippers face tough challenges when it comes to shipping.
Unlike larger companies, they don’t have the same resources or bargaining power and often struggle to navigate the complex world of shipping logistics. In the end, we see them make easily avoidable mistakes costing both time and money.
Mistake #1: Putting all your eggs in one basket
This one speaks for itself. Using one single carrier for every shipping need is akin to using dial-up internet – it’s dead. Fueled by the growth in e-commerce and demand for fast and reliable parcel shipping has given rise to an even wider pool of carriers. So why not shop around for the best rate and compare pricing, carrier by carrier?
For small business owners used to working with the same carrier for every package, these options present a newfound opportunity for cost savings. Gone are the days of single-carrier parcel shipping. Today’s shippers can leverage, compare and negotiate rates with carriers and choose the best one for guidance from the port to the porch.
Comparing carriers is an essential step for any shipper looking to optimize their shipping process. By evaluating multiple carriers and modes, small businesses can find one that meets their needs in terms of cost, delivery times, quality service, flexibility and building a long-term partnership.
Some carriers also provide real-time tracking information and more detailed insight into shipping costs and delivery times. This type of data goes a long way to help small businesses make better decisions that can help save money and improve customer satisfaction.
The takeaway here is: Consider adopting a multi-carrier parcel shipping strategy instead of always relying on one favorite go-to on speed dial. Using software to compare carrier pricing helps make this process more efficient. Working with multiple carriers can increase flexibility, reduce risk and provide greater control over shipping operations.
Mistake #2: Shipping with blinders on
When an order comes in, some small businesses mistakenly assume it must be shipped overnight orthe fastest way possible. Having an agile shipping strategy and slowing down deliveries by even a day, can lead to tremendous cost savings. Provided delivery times don’t impede customer satisfaction, these best practices help small business owners quickly adapt to changes in the market without sacrificing quality of service.
Start by evaluating different transit times and think about the factors that impact shipment speed and reliability. The most important consideration is customer expectation. How quickly does the customer need that jacket? Does it warrant expedited or overnight shipping, or can it be sent via two-day air or ground delivery? Small businesses would be wise to consider the trade-offs between speed and cost before deferring to the business-as-usual overnight option.
Small businesses should also evaluate mode shifting into Less-than-Truckload (LTL) and Truckload (TL) for larger order quantities. LTL shipping is an option for shippers who must move a few pallets of goods and have flexibility with delivery dates. LTL carriers consolidate freight from multiple shippers into a single truck, which helps to reduce costs for each shipper. With TL shipping, the entire truck is reserved for a single shipment, allowing for faster transit times and more control over the shipment.
By considering the size of the shipment, distance, transit time and level of control required, small businesses can make an informed decision and choose the shipping option – and speed – best suited to their needs.
Mistake #3: What you don’t know can hurt you
Measurement is critical to success. Small businesses that fail to organize and track shipments are living in the operational dark ages, losing out on valuable insight that could lead to better savings.
Several free shipping software tools now exist to help small businesses automate and streamline the shipping process, as well as track past shipments. Some software integrates with carriers’ tracking tools to provide real-time updates on shipment status.
Transportation Management Systems (TMS) are one example, and many companies offer free versions for companies without the budget for a comprehensive TMS. These systems typically offer basic functionalities such as shipment scheduling, carrier selection, tracking reporting and invoicing. While without the full functionality found in paid TMS solutions, they can still provide significant benefits to small businesses.
Using the data collected from these tracking tools can provide insight to help analyze and assess efficiency. Having visibility into patterns or trends in delivery times, rates and customer satisfaction levels are priceless, empowering the small business to make smarter routing decisions with their freight dollars.
This data can be used to set and measure strategic KPIs to ensure peak performance. Data points like on-time delivery percentage, average delivery time, shipping cost per order and customer satisfaction can all be used to make these assessments. Once established, businesses can set target metrics for each KPI to measure success. By tracking performance on a regular basis, shippers can remain on top of anomalies and quickly make informed decisions to optimize operations.
Today’s shipping climate isn’t like it used to be. Small businesses now have a range of options and carriers to choose from in addition to traditional stand-by shippers like USPS, UPS and FedEx. Even without a dedicated logistics team, these common mistakes can be easily avoided and go a long way towards saving time and money, while keeping customers happy and coming back for more.
Jared Wilson is the Executive Vice President of Managed Services for Transportation Insight Holding Company (TIHC) and has 20 years of transportation, logistics and supply chain experience.
