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Parcel Shipping Industry Insights: What to Track and Challenges

by Sifted Team

Feb 2, 2023

7 min read

What Are Shipping Analytics?

Shipping analytics is the process of gathering, processing, and analyzing large amounts of shipping data to gain visibility into shipping operations. It also provides companies with valuable insights that help them make better business decisions.

Shipping analytics has many applications, including shipping cost optimization, rate compliance, and contract management and monitoring.

In this guide, we’ll learn more about the role of analytics in shipping processes, the benefits of using shipping analytics, and the important metrics you need to track to maintain your competitive advantage.


What Do Shipping Analytics Track?

Shipping analytics software collects data and statistics through digital touchpoints in your order management software, warehouse management system, vehicle trackers, and more. All of this stored data is examined and analyzed in a centralized platform to track key metrics.

Let’s take a look at common KPIs tracked by shipping analytics software.

Potential Rate Increases

GRI (General Rate Increase) is an annual increase in fees that are applied to small parcel and container shipping rates. UPS and FedEx have announced a 6.9% rate increase for their delivery services for 2023. Carriers also charge higher fees during the peak season to cover the increased operating costs. Similarly, shipping surcharges (such as fuel surcharges, additional handling, and pickup area surcharges) are also added to base shipping rates.

eCommerce retailers and shippers can’t avoid rate increases and surcharges at times, however, they can minimize their impact by optimizing their carrier strategy. Start by staying well-informed about your shipment requirements (e.g., your most common service levels, shipping surcharges, etc.) and budget accordingly to avoid any later surprises.

Predictive analytics can help you combine historical data and real-time trends to forecast how carrier change rates can affect your profit margins. You can use this information to find alternate shipping options (e.g., regional carriers, parcel consolidation, zone skipping, etc.) weeks or even months in advance.

Organizations use artificial intelligence and predictive analytics to improve supply chain visibility and better prepare for unexpected conditions.

Sifted’s Logistics Intelligence solution gives you complete visibility into your shipping data in one place–helping you better respond to issues such as shipping rate hikes.

Proposal Simulations

Most shippers don’t have access to the right analytics solution and data to identify areas for optimization and growth. What if you could reduce your shipping spend by 10% or improve on-time delivery without changing your shipping operations?

A logistics intelligence platform enables you to compare carrier agreements and rates side by side. You can test different agreement scenarios to benchmark carriers based on shipping rates and service levels. You can use this information to validate if you are getting the best possible parcel shipping rates or if you need to set new contract targets in light of the new information.

Sifted’s shipping intelligence solution uses machine learning algorithms and data science to uncover potential cost savings and offer recommendations on enhancing your shipping processes.

Rate Compliance

Inaccuracies and errors in invoices can be time-consuming for shippers. Rate compliance is an important KPI (key performance indicator) that helps you gauge your carrier performance.

Knowing when, where, and how these shipping errors occur can help you eliminate them. For this, you need to extensively review service failures and overcharging incidents. This information not just helps you recover revenue but can be used to renegotiate terms in your parcel contracts.

Sifted’s rate compliance feature enables you to validate invoices against negotiated rates and identify discrepancies.

Contract Monitoring

Even experienced shippers are surprised by unexpected fees each year. This happens because most shippers find shipping contracts too complex or too confusing to understand. Moreover, they only view the discount incentives and don’t consider any penalties. For example, you can be penalized for missing shipping volume requirements agreed upon with your carrier.

Sifted’s contract monitoring feature helps you keep track of volume-based pricing penalties and alerts you so you don’t exceed or miss negotiated tiers.

GL Coding

General ledger coding is used to track recurring expense transactions by assigning a number or code to each entry (such as shipment type, duty, and service level) in a business’ ledger.

Manual GL coding requires massive human capital and leaves room for much error. Errors in shipping companies’ invoices are prevalent, but most businesses are not equipped to identify invoice errors, particularly in the case of UPS, DHL, and FedEx.

Plus, GL codes can become an increasingly complex set of strings for high-volume shippers, making it difficult for the administrative staff to track shipping costs and reconcile carrier invoices.

By investing in shipping analytics software, you can streamline accounting tasks like shipping reconciliation and bring accounting information to a centralized place. As a result, supply chain managers can quickly access accurate financials in real-time, improving their business decision-making.

Sifted’s Shipment GL Coding service speeds up the process of general ledger coding by applying intelligent automation to correct billing errors.


When it comes to shipping costs, most shippers focus on package weight and destination. However, large, oversized packages can actually cost more to ship, thanks to dimensional weight pricing and handling surcharges. Similarly, many retailers use oversized boxes ordered in bulk to save money. As a result, they end up paying higher fees due to dimensional pricing.

You can use Sifted’s DIM weight calculator to see the billable weight of your shipment for FedEx, UPS, and USPS.

Packing materials contribute to the total cost of shipping. Packaging takes up around 9% of the total cost of the actual product. Therefore, it is necessary that your packaging is purposeful.

Sifted’s package modeling feature helps shippers simulate how package dimensions can impact their shipping costs before investing in a new box. This enables them to optimize packages for lower rates and avoid surcharges.

Shipping Speed

Shipping speed refers to how fast you deliver packages to your customers at their homes or place of work. Faster shipping speed means higher shipping fees. In fact, 88% of customers are willing to pay more for quicker shipping options.

In addition, shipping speed is a useful indicator of your supply chain performance i.e., whether your carrier meets their promised transit times. You can use the transit time metric to investigate where delays occur to improve your delivery rate and reduce holding costs.

Sifted’s multi-carrier visibility feature gives you complete visibility across all your carries and tracks key metrics like transit time.


Challenges Associated with Shipping Analytics

Shipping analytics give useful insights into your shipping performance and customer satisfaction. However, many logistics managers still face challenges in implementing analytics in their shipping workflows.

Some common challenges associated with shipping analytics include

  • Difficult to understand the data: Big data analytics helps businesses collect, process, and analyze large amounts of shipping data. However, it’s often too complex for managers to uncover market trends, insights, and new opportunities.
    Shipping analytics can help companies make better decisions related to network distribution, carrier capacity utilization, and optimal service levels. They can understand and identify areas where the business may be making costly decisions with powerful AI-analytics tools.
  • Too much data to compile and organize: Shipping analytics harnesses historical shipment data and modeling tools to identify patterns in areas like service type, transit time, and package status. This information is used to compare and benchmark performance. Still, it becomes challenging for many organizations to collect and process a massive quantity of data from multiple sources on a daily basis.


Get a Simplified View of Your Shipping Data with Sifted

Businesses use shipping analytics to improve supply chain visibility and minimize shipping costs while meeting customer expectations.

Sifted Logistics Intelligence offers tools that give you complete visibility into your shipping data in one place that’s straightforward and easy to understand. It provides actionable insights to make smarter business decisions and improve your competitive advantage.

Leverage the power of data science to capture significant ROI. Get a free demo from Sifted!

Topics: Supply Chain Management

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