In today’s fast-paced e-commerce landscape, efficient parcel carrier performance management is critical for businesses to meet customer expectations, reduce costs and maintain a competitive edge. With the increasing complexity of parcel logistics operations, shippers need robust tools and strategies to monitor and optimize carrier performance. Best practices for parcel carrier performance management are critical and include the importance of selecting the right provider and leveraging key performance indicators (KPIs) to drive success in parcel shipping.

The Importance of Parcel Carrier Performance Management

Parcel carrier performance management involves tracking, analyzing and optimizing the performance of carriers to ensure timely and cost-effective deliveries. For businesses, especially those operating across multiple countries, managing carrier performance can be challenging due to varying data storage methods, carrier systems and regional logistics practices. However, with the right provider and tools, shippers can gain visibility, control and actionable insights to improve their shipping operations.

Key Components of a Parcel Carrier Performance Management Solution

1. Centralized Platform for Comprehensive Overview and Control

To effectively manage carrier performance, businesses need a provider that offers a centralized platform to monitor and analyze carrier KPIs. These KPIs include:

    • On-Time Delivery Rate: The percentage of parcels delivered on or before the requested delivery time.
    • Late Delivery Rate: The percentage of parcels delivered after the requested delivery time.
    • Delivery Exception Rate: The frequency of issues such as damaged goods, lost parcels or incorrect deliveries.
    • Cost per Parcel: The average cost of shipping per parcel, helping identify cost-saving opportunities.

By having this data, when you go into negotiations with your parcel provider or even monthly meetings – it allows you to be able to hold carriers accountable and in a world where shippers typically have a multi-carrier parcel strategy, understanding if you are using the right carrier mix based on not only cost but performance.

2. Connections of multiple data sources to calculate KPIs

You can unlock another layer, if you can integrate overall carrier performance data with other order data through your ERP, WMS or even parcel carrier scan data. This would involve:

    • Extracting Order Data: Pulling order information from the shipper systems, including requested delivery times and customer details.
    • Linking to Carrier Scan Data: Drawing scan data (e.g., pickup, transit and delivery timestamps) from major carrier systems.
    • Comparing Data: Comparing the actual delivery time with the requested delivery time to determine on-time and late delivery rates.

This complex level of data capture and integration provides shippers with accurate, actionable insights into carrier performance, helping them identify trends and areas for improvement.

3. Seamless Integration with Major Carriers

Many shippers who use multiple carriers have ways of reviewing the data to make sense of it, however, with parcel carriers and complex fulfillment networks it can be challenging. Also oftentimes you are retroactively looking at data once your parcel invoice comes in compared with proactively seeing what is happening in your network. (Shameless plug, this is where TI can help!) With real time data and pre-built integrations shippers can:

    • Access real-time data from multiple carriers through a single platform.
    • Standardize performance metrics across carriers, regardless of regional differences.
    • Negotiate better rates and service levels based on performance data.

4. Ability to Focus on the Tactical (package tracking) and Strategic (overall performance)

While real-time parcel tracking is valuable for customer service, parcel carrier performance management focuses on the bigger picture. A carrier performance management system enables shippers to prioritize:

    • Analyzing aggregate performance data to identify trends and patterns.
    • Monitoring carrier performance over time to assess consistency and reliability.
    • Using historical data to forecast future performance and optimize shipping strategies.

This approach is particularly beneficial for large companies with complex operations to manage, as it reduces the complexity of managing tens of thousands of parcels daily.

5. Ability to Overcome Compatibility Challenges within Global Operations

Large companies with operations in multiple countries face unique challenges in parcel carrier performance management, including:

    • Diverse Data Storage Methods: Different locales may use varying systems to store order data, making it difficult to standardize performance tracking.
    • Lack of Standard ERP Systems: Without a centralized ERP system, consolidating data from multiple sources can be time-consuming and error prone.
    • Regional Carrier Differences: Carriers may have different performance standards and reporting methods in each region.

To overcome these challenges, be sure you partner with a provider that delivers:

  • Data normalization tools to standardize information from disparate systems.
  • Customizable dashboards to accommodate regional differences.
  • Expertise in local carrier practices and regulations.

Optimize Your Parcel Carrier Performance Management Today

Contact Transportation Insight today to learn more about our parcel carrier performance management solutions and take the first step toward optimizing your shipping operations. Let us help you turn data into actionable insights and drive success in your supply chain.