Quarterly Live Group Demo Watch Now

Sifted logo

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.

Packaging

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
Topics

Check out related resources at Sifted.

Parcel Carrier Diversification 101

Parcel Carrier Diversification 101

Last mile delivery has never been more important to businesses. In 2023, the global last mile delivery market was ...
Read More
RILA LINK 2024 Recap: The Cutting-Edge of Retail Supply Chains

RILA LINK 2024 Recap: The Cutting-Edge of Retail Supply Chains

At the end of February, supply chain leaders from the nation’s largest retailers converged in Dallas for the ...
Read More
Sifted’s Caleb Nelson Named 2024 “Pros to Know” Award Recipient

Sifted’s Caleb Nelson Named 2024 “Pros to Know” Award Recipient

KANSAS CITY, Missouri - Sifted, the trailblazer in Logistics Intelligence™ is proud to announce that Caleb Nelson, ...
Read More
Meet Sifted at LINK 2024

Meet Sifted at LINK 2024

At the end of February, the top supply chain leaders from some of the nation’s largest retailers will converge in ...
Read More
Parcel Carrier Comparison Guide

Parcel Carrier Comparison Guide

In the intricate landscape of parcel shipping today, shippers navigate a complex web of carriers, each with its ...
Read More
Amazon Shipping, Seller Fulfilled Prime, and More: Matt Snyder’s Insights and Advice to Sellers in 2024

Amazon Shipping, Seller Fulfilled Prime, and More: Matt Snyder’s Insights and Advice to Sellers in 2024

Amazon took the supply chain world by storm in 2023. They announced Amazon Shipping, a FedEx and UPS competitor ...
Read More
2024 Shipping Industry Outlook: Top Trends Driving Down Costs + How to Capitalize

2024 Shipping Industry Outlook: Top Trends Driving Down Costs + How to Capitalize

Over the last few years, soaring shipping costs, unpredictable rate hikes, and a challenging logistical landscape ...
Read More
Sifted Celebrates Achievement as 2023 Top Tech Startup by Food Logistics, Supply & Demand Chain Executive

Sifted Celebrates Achievement as 2023 Top Tech Startup by Food Logistics, Supply & Demand Chain Executive

Kansas City, Mo – Sifted, a leader in Logistics Intelligence, has been recognized as a 2023 Top Tech Startup by ...
Read More
11/27/23 Parcel News Update

11/27/23 Parcel News Update

1. Amazon’s Volumes Surpass FedEx and UPS Amazon delivered more parcels in 2022 than UPS, according to internal ...
Read More
11/20/23 Parcel News Update

11/20/23 Parcel News Update

1. USPS Announces Tentative Rate Increases for 2024 The United States Postal Service has announced rate increases ...
Read More
11/13/23 Parcel News Update

11/13/23 Parcel News Update

1. Experts Share Attention-Grabbing Items from 2024 GRIs Supply Chain Dive interviewed industry experts, including ...
Read More
2023 Holiday Shipping Deadlines

2023 Holiday Shipping Deadlines

It’s the most wonderful time of the year? It will be if your customers receive their orders on time. The major ...
Read More

Are you an FBM (fulfillment by merchant) Amazon seller?

Check out our Marketplace Intelligence solutions to protect your bottom line.

Shipping Insights & Alerts
Get updates and track the things impacting your business most

Decision Support
See how supply chain adjustments pay off before you pay out

Carrier Management
Streamline how you manage your carrier operations and contracts

Business Automation
Let software do what it does better than people can

Seller Insights
Measure and monitor with confidence.

Sales Visualization
Shed new light on your sales data.

Fee Analyzer
Understand the impact of ever-changing FBA fees.

FBA Audit & Recovery
Secure money you’re owed from Amazon.

Blog
Discover news, tips, and industry best practices

DIM Weight Calculator
See how DIM is impacting you

Podcast
Hear from industry experts on LeaderShipping

Case Studies
Learn how other brands use
Logistics Intelligence

Carbon Calculator
Calculate your CO2 Emissions

Thought Leaders
Meet the people behind the technology

Guides
Download free reports and expert how-tos

Demo
Get a personalized tour of our software

About Sifted
Get to know Logistics Intelligence

Logistics Intelligence
For parcel shippers

Marketplace Intelligence
For Amazon FBA sellers

Let's get you to the right place!

SIFTED DASHBOARDS
For parcel shippers

AMAZON Marketplace Intelligence

Not sure if you have an account? Email [email protected].