Calling time on estimated carrier costs. How to enjoy carrier allocation based on true cost.

By Sorted January 30, 2020

1200x544-how-to-enjoy-carrier-allocation-based-on-true-cost (1)

We all know that customer experience is crucial, and that retail’s now all about delivering personalised, engaging experiences. It’s about giving customers a warm, fuzzy feeling that brings them back to the brand for more. And we also know (pay attention at the back!), that’s why it’s so important to have the right carrier strategy in place. Multiple carriers = multiple delivery options = delighted customer riding the retail therapy buzz all the way to the doorstep.

It can be difficult to quantify what an improved system is actually doing for your brand, your processes or your bottom line. What’s your ROI? What are the metrics? But you know it’s important to have numbers where possible, and delivering on the delivery experience, through often complex carrier management, is one area where you can get clearer with costs.

Demystifying carrier costs

For some reason - maybe reluctance to change, maybe the myths around resource requirements, maybe the worry of business continuity risk, maybe just not believing there’s another way - retailers seem to simply accept that in integrating with a carrier - either directly, or through a delivery management platform - costs can be vague. That it’s unavoidable. That you can’t accurately assign rates and surcharges to individual orders.

Maybe it’s because there are so many variables to consider. Parcel size, volume, weight, destination, Central London Congestion Charges, out of area charges. There are potentially tens and tens of surcharges that might need to be applied to a specific package.

We fully get that if you’re a retailer shipping tens or hundreds of thousands of orders a year, you couldn’t possibly manage them manually. But that doesn’t mean you have to accept a generic, wooly, ‘sort of’ cost for each of the orders you’re sending.

More often than not, it doesn’t work in your favour. Carriers have to build in a certain buffer to these estimates, to ensure their costs are covered. But that means an overestimated cost per parcel, every time. Sure, there might be the odd occasion where you pay less than the true cost of shipping - but it’s rare. So, you’re not actually getting the lowest cost carrier each time. Maybe in some cases, but not the majority.

A smarter delivery management platform

But, what can be done? It’s too much to manage manually, you can’t expect carriers to take a hit, and you need your integrations to provide that cracking customer delivery experience that *someone* (read: everyone) keeps going on about.
Well, enough of the messing about.

An intelligent decision engine is the answer. SortedPRO provides consignment allocation based on the true cost of delivery – whilst taking into account business rules, warehouse and carrier operational calendars and carrier capabilities. We use each retailer’s carrier service preferences, on top of doing a general all-in costs comparison to make sure parcels are sent the right way every single time. Imagine that.

By moving from estimates to true-cost based allocation we typically see, across our client base, a 1-5% improvement in cost. That’s not an insignificant amount of money when you’re shipping thousands of parcels a year. It could actually translate to a fair amount.

Would you like to see how much we could save you? Course you would!

Try our True Carrier Cost Calculator, and find out. Otherwise, please do get in touch if you’d like more info.

Back to Blog page