Build your successful shipping strategy on a multi-carrier foundation

"It's kind of phenomenal in this day and age how hard it is to figure out how to ship something cost-effectively," says Rick Hernandez, vice president of partner development for global ecommerce at Pitney Bowes. An automated multi-carrier shipping strategy is one way to take the pain out of that equation.

Such a strategy is critical because of the changing landscape of shipping. Competing for customer loyalty has taken on a critical new dimension for small and mid-size businesses. Next day and even same-day free shipping are becoming the norm in retail. With these, shipping expectations set by Amazon, small and mid-size businesses, who do not have the same negotiating clout, are being squeezed by shipping costs.

Why is a multi-carrier shipping strategy so important?

Successful multi-carrier strategies take advantage of the differing strengths and skills of each carrier.

Single-carrier shipping systems account for approximately 85 percent of all parcel-shipping systems, according to a study conducted for Pitney Bowes by The Colography Group. While these single-carrier systems are well designed for the carrier they represent, the same systems often make switching between either carriers difficult or prohibitive— because of the contracted volumes they often come tied to or the unwieldiness of having separate systems for different carriers.

Based on responses from 972 companies, the Colography study determined that retailers might be leaving money on the table by failing to review their parcel shipping systems regularly and instead locking into carrier-specific systems. These systems may offer volume discounts, but ultimately may not be cost-efficient when compared with a multi-carrier strategy that takes advantage of the USPS®, especially for shipments greater than 350 miles from a fulfillment center.

Why include the USPS—and trusted partners—in the mix?

The USPS is already being used by shippers of all sizes and even other commercial carriers for the final mile of delivery, because of the scope of the benefits and cost savings it offers. However, there is opportunity for it to be used to even more advantage, especially by small and mid-size retailers.

"For an SMB retailer or e-commerce retailer, the USPS is a must-have," says Kenny Pate, vice president of product management, global ecommerce at Pitney Bowes, "if you want to drive down costs as much as possible and you want to be able to fulfill your brand promise. The USPS is now a big player in the parcel carrier space, and it’s starting to rival the dominant players in the United States."

The established reliability of the USPS has attracted commercial third parties that want to collaborate with the service to provide added value to customers, Pitney Bowes among them.

For small and mid-size retailers, working with these third-party partners, instead of on a one-to-one basis with the USPS and other carriers, is a way to access the negotiating clout of larger enterprises (for example, Amazon or Walmart)—without the hassles of doing their own negotiations. Typically merchants work with third party partners either directly by integrating an application program interface (API) into their own systems, or indirectly by using broader order management or e-commerce software where the shipping partner's software is an already-integrated option.

It’s a win-win strategy for all involved parties.

Learn more

To learn more about the components of an effective shipping strategy leading to greater customer satisfaction, read Shipping as Strategy: How small and mid-size retailers can best meet customers’ delivery expectations in the age of Amazon.