Single carrier vs. multi-carrier: risk vs. reward.

By Sorted August 12, 2020

blog(12)-1

Warehouse mission: operational flexibility, at the lowest cost, with the lowest risk of disruption, in a logistics landscape in flux.

Sounds easy enough.

For the warehouse manager, logistics director or head of operations; carrier performance is a daily marathon (often ran over hot coals, whilst being chased by dogs). Keeping an eye on cost to serve, delivery promise, first time delivery success, carrier surcharges – all whilst avoiding that dreaded call from the customer services manager, telling you about disruption in the carrier network (side note: you don’t have to wait to hear about delivery issues from customers – it’s really easy to be proactive with delivery tracking).
But, as a retailer expands into new markets and territories, these performance metrics become a concern for the rest of the business too. When demand and ecommerce volume grows and warehouse operations mature, carrier offering is one of the first and major risk reviews that should take place.

So, if that’s the case, why do some retailers have limited carrier provision? A single carrier operational set up, or limited carrier service offering, is inherently risky (and is definitely not very customer-centric).

Here’s just a couple of the main issues:

  • If they go down, you go down

If you put all your eggs in one carrier’s basket, and that carrier faces any disruption (due to tech failure or extreme weather, for example), you’re scrambled. No service, no shipping – and no carrier should be your single point of failure.


  • No negotiation power

If you’re negotiating rates with one carrier, you’re not negotiating at all – they know you need them more than they need you. Maintaining margin can only be done if you have a strong position in commercial conversations. And for that, you need smart data and an armoury of alternative services.

  • No optimisation of service type

Highlands and islands, or next day delivery for pre-10pm orders… with just one carrier, service offering is limited and there’s no ability to be smart with parcel routing. Intelligent, automated allocation doesn’t have to be black magic (we’ve got a step by step in our playbook, here).

  • Customers crave choice

It’s a major risk if your delivery offering doesn’t support carrier flexibility at the checkout. CX is crucial – and, to help the Marketing team convert, delivery offering has to be well-aligned to warehouse capability. If the web front end isn’t aligned to the back end fulfilment rules… disaster is imminent.

  • Nobody likes a full warehouse floor - or broken customer promise

Issues internally with picking and packing can cause missed carrier departure times. Mistakes happen - but, with no real carrier-driven issues, the warehouse is to blame for not delivering on customer promise. This can lead to stock build up, disruption of process and reduction of warehouse floor capacity - not to mention unhappy customers (and unhappy customer service teams). Flex is needed, so other services are on hand as plan B.

For more comparison between single and multi-carrier delivery, and for help building a business case, get our new downloadable playbook.

 

As the oracle of everything carrier and shipping related, the business looks to the warehouse and the operations team to deliver a carrier strategy that is both flexible and financially sound. That’s hard to do with just one partner, especially when you could tap into a market that’s growing exponentially.

Benefits of multi-carrier are very far reaching, but a few to mention:

  • Order cycle time protection

Business continuity and output velocity can be maintained if the risk of carrier downtime is mitigated. One large fast fashion brand had downtime to the value of £50,000 when they were unable to ship for just one hour. Not good for customer promise, either.

  • More power for commercial conversations

If you have options for fulfilling deliveries, volume splits can be used as a negotiation tool for rate card conversations.

  • Agile expansion

One carrier can’t deliver to the world. If a retailer has sights set on nationwide or international expansion, more carriers will enable growth in different territories

  • Service specialism

Dangerous goods, high value luxury, electronics, inner-city, remote residential – your service arsenal should be packed with options for specialist delivery.

  • Proactive rerouting

As soon as there's a sniff of carrier performance dropping, whether it's longer term change or in direct response to a severe and short term issue, there are fall backs to ensure customer promise is kept.

 

A CMS can have major and immediate impact on warehouse and logistics operations - as well as the wider business offering as a whole.

As ambitious plans and roadmaps are laid down, for growing retailers of all shapes and sizes, the warehouse should be seen as a leader of growth rather than a blocker.

To get the most out of a new system, or even an existing one, we've put together some tips, tricks and tests that will help transform delivery ops into your secret weapon.

Back to Blog page