PARCEL September/October 2020

WHAT YOU WOULD HAVE SEEN AT

SEPTEMBER-OCTOBER 2020 PARCELindustry.com

SURVIVING PEAK SEASON DURING A PANDEMIC P. 28

TIPS TO OPTIMIZING YOUR WAREHOUSE, TODAY AND TOMORROW P. 38

POST-HOLIDAY RETURNS: ARE YOU UP TO THE CHALLENGE? P. 36

2021 BUDGET

PLANNING: How to Navigate the Uncertainty PAGE 32

CONTENTS /// Volume 27 | Issue 5

16

22 28 32 36 06 EDITOR’S NOTE Rising to the Challenge

By Amanda Armendariz

08 SPEND PERSPECTIVES Logistics Costs Challenge E-Commerce Profit Margins

By John Haber

10 SUPPLY CHAIN SUCCESS Coronavirus Accelerates Parcel Industry Change

By Mark Taylor

12 TECH SPACE Micro-fulfillment Investments Increase to Speed Last-Mile Strategies

By Chase Flashman

14 PACKAGING How AI Can Help Bridge the Gap in the Age of COVID-19

By Bob Malley

16 PARCEL’S 2020 CARRIER PERFORMANCE SURVEY

By Amanda Armendariz

4 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

20 THE RETAIL REVOLUTION: HOW BUSINESSES CAN SURVIVE IN A POST-COVID WORLD

By Matt Kulp

22 AVOIDING COMMON CARRIER AGREEMENT PITFALLS

38 TIPS TO OPTIMIZE YOUR WAREHOUSE… TODAY AND TOMORROW

By Ed Romaine

46 WRAP UP Together, We Can Deliver

By Michael J. Ryan

By James Matthews

28 STRATEGIES FOR SURVIVING PEAK SEASON DURING A PANDEMIC

By David Sullivan

30 TOP FIVE CRITICAL CHECKLIST ITEMS FOR IMPLEMENTING A WMS

By Chelsea Mori

32 2021 PARCEL BUDGET PLANNING: A ROADMAP TO NAVIGATE UNCERTAINTY

By Nate Skiver

36 HOLIDAY PURCHASE RETURNS: ARE YOU UP TO THE CHALLENGE?

By Josh Duane

SPONSORED CONTENT 24 WHAT YOU WOULD HAVE LEARNED AT PARCEL FORUM’20 35 EVOLVE PARCEL PERFORMANCE WITH A PERSONALIZED PLAYBOOK 40 WHAT YOU WOULD HAVE SEEN IN THE PARCEL FORUM ’20 EXHIBIT HALL 45 ARE YOU SITTING ON A MOUNTAIN OF SAVINGS?

PRESIDENT CHAD GRIEPENTROG PUBLISHER KEN WADDELL EDITOR AMANDA ARMENDARIZ [ amanda.c@rbpub.com ]

AUDIENCE DEVELOPMENT MANAGER RACHEL CHAPMAN [ rachel@rbpub.com ]

CREATIVE DIRECTOR KELLI COOKE ADVERTISING KEN WADDELL (m) 608.235.2212 [ ken.w@rbpub.com ]

PARCEL (ISSN 1081-4035) is published 7 times a year by MadMen3. All material in this magazine is copyrighted 2020 © by MadMen3. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to PARCEL, MadMen3 or its staff becomes the property of MadMen3. The articles in this magazine represent the views of the authors and not those of MadMen3 or PARCEL. MadMen3 and/or PARCEL expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine.

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SEPTEMBER-OCTOBER 2020  PARCELindustry.com 5

EDITOR’SNOTE

RISING TO THE CHALLENGE

By Amanda Armendariz

T

his fall certainly seems different than those of years past for many reasons, and I know that I’m not alone. Typically, our kids would be back in school full-time, extracurricular activities would be kicking off shortly or have already started, and another jam-packed summer would be complete. I know experiences vary depending on what part of the country you’re in, but for many of us, this year, there are no extracurriculars for our kids, school is done on a virtual model, and trying to find an unpopulated beach or walking trail so we could get out of the house was the extent of our summer activities. Not to mention, usually by this time of year, our team is focusing 100% on preparing for our upcoming PARCEL Forum, so the fact that there is no show this year due to safety reasons is

6 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

perhaps one of the most glaring differences. It certainly doesn’t feel like a typical year in the slightest.

But yet, it’s still encouraging to see how people have responded to this unprecedented challenge, both on a personal and professional level. So many people are doing their best to roll with the punches and make sure that our children are educated, our communities stay healthy, and the products people order online show up on their doorsteps in a timely manner. It’s an honor to be part of the supply chain industry as your information source, and I hope that the information we provide to you via our magazine, website, enewsletters, and webinars gives you the tools you need to stay successful during COVID-19 and beyond.

As we continue to rise to the challenge of surviving this new normal, it’s important to remember that many of the industry partnerships and connections we had pre-COVID still exist; we just may need to access them in different ways.

Check out pages 40-44 to see some profiles on companies you would have seen at the 2020 PARCEL Forum, and while you may not be able to meet with them in person, they’re still only a click or a phone call away. And rest assured, we as a team are already planning for our 2021 show in DC. As always, thanks for reading PARCEL.

EDITOR’S PICK

Here are some of the most-read articles on our site in recent weeks. If you haven’t already checked them out, you might want to — there is some great information in there!

2020 Peak Surcharges Explained

By Keith Myers

E-retailers with a Single Fulfillment Center Are at Risk

By Harry Drajpuch

Shippers, Carriers, & the Impact of COVID-19

By Gavin Creado

SPENDPERSPECTIVES

LOGISTICS COSTS CHALLENGE E-COMMERCE PROFIT MARGINS

By John Haber

S

imilar to small parcel carriers, the shift, driven by COVID-19, from commercial brick and mortar purchases to residential e-commerce purchases has created a strain on many retailers’ profitability, causing even the industry giants to make some changes.

Amazon, the largest e-commerce provider in the US, has built an intricate network that includes fulfillment centers, delivery stations, inbound and outbound sortation facilities, Amazon Prime hubs, and returns centers. It is a freight broker, a freight forwarder, an airline, and a last-mile delivery provider, all while promising next day delivery to its Prime members. However, its last-mile delivery network is limited in reach and continues to remain dependent on outsourced last-mile providers such as UPS, the USPS, and regional carriers and couriers. Shipping costs continue to be a major drain on profitability as Q2 costs (+60% over LY) escalated

8 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

much more rapidly than revenues (+40% over LY).

Despite the impressive network build-out, Amazon’s retail brick and mortar presence is limited mostly to its Whole Foods and Amazon Go stores.

Amazon has installed lockers at many of these locations as well as third-party locations for alternative delivery drop off/pickup locations and also has a large presence on many college campuses.

Meanwhile, Walmart, perhaps Amazon’s biggest competitor, has introduced its own marketplace and has also partnered with Shopify. This partnership allows Shopify sellers to set up shop on Walmart’s online marketplace. Impressive, but how enticing is it for these sellers remains to be seen. Walmart continues to play catch-up with its e-commerce ventures, and its Walmart Plus solution has been delayed for a third time in 2020. We strongly believe that rapidly escalating logistics costs and last-mile delivery capacity are contributing to the delay.

Walmart’s supply chain has always been impressive. Known for tightly managing suppliers, managing its own trucking fleet as well as its outsourced transportation needs, Walmart’s last-mile endeavors, however, have been a challenge. When utilizing a variety of crowdsourced delivery providers, the network is unpredictable.

Besides using crowd-sourced delivery providers, Walmart also leans heavily on FedEx for deliveries. FedEx, however, has suffered from capacity issues this year and has had to cap volumes on some retailers, while implementing “temporary” Ground surcharges on others.

These surcharges have weighed heavily on e-commerce retailers,

and the additional parcel peak season surcharges that begin in October will have a tremendous impact on many large e-commerce retailers.

Target has taken a different e-commerce approach and does not have an online marketplace. Instead, Target has taken advantage of its stores and successfully promoted BOPIS and curbside pickups.

It acquired route optimizing software firm, Grand Junction, and crowd-source delivery platform, Shipt, in 2017 to build out its last-mile capabilities. Earlier this year, Target acquired technology assets from same-day delivery service Deliv, all of which help expand same-day delivery. According to the retailer’s CEO, same-day services accounted for around three-quarters of Target’s digital sales revenue in 2019, and the services grew by 90%.

During the first quarter 2020, Target shipped 80% of e-commerce orders from stores amid a 141% YOY rise in e-commerce revenue.

Same-day fulfillment grew by 278% YOY in the quarter.

However, net income fell because of costs associated with employees fulfilling orders and increased shipping costs. As a result, Target is testing a new sort center concept. These sort centers are intended to remove parcel sorting from stores and enable higher throughput of e-commerce packages and more efficient shipping to lower costs per order.

John Haber is the Founder and CEO of Spend Management Experts and can be reached at solutions@spendmgmt.com.

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SUPPLYCHAINSUCCESS

CORONAVIRUS ACCELERATES PARCEL INDUSTRY CHANGE

By Mark Taylor

C

OVID-19 has certainly served as an accelerant to change in our industry; many of the changes that had begun pre-COVID have quickened.

Pre-virus, 2019 included the diversion of UPS and FedEx strategies on several key points:  Amazon interaction  Delivery of more than five days per week  How USPS would serve as a partner going forward FedEx broke away from Amazon fulfillment all but completely in August 2019. It currently still services Amazon’s third-party seller network, but no longer delivers for Amazon direct fulfillment. FedEx’s changes also include an effort to maximize delivery density by not only delivering some Express packages in the Ground network beginning March 2020, but also converting SmartPost deliveries from USPS delivery into Ground with the goal implementation of EOY 2020. FedEx has also chosen to run its delivery

10 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

network seven days a week, with Sunday delivery done by uniformed FedEx drivers.

UPS’s tactics have been almost the exact opposite.

It continues to deliver for Amazon, which now represents approximately 12% of UPS’s total revenue. UPS is utilizing the USPS in an even bigger way, using its SurePost service for USPS Sunday deliveries.

Another pre-viral change agent was Amazon’s rapid growth not only as a shipper, but also a parcel delivery service. It represents nearly 40% of e-commerce in the United States and has consumed mall retailers’ businesses, then moved into their former locations. The circle of life was completed as these retail locations became Amazon fulfillment centers.

Then Came a Virus The policies enacted during the pandemic have served as a catalyst for changes that were already in progress, with some additional side effects:  The ratio of residential versus commercial deliveries  Conversion of goods shipped from “wants” to “needs” items  Seven-day parcel networks became a capacity necessity The shift from brick and mortar to click and order has clearly accelerated. The proof is in FedEx’s annual report for 2020. FY2020 began June 2019 and closed May 2020.

FedEx Ground’s average daily volume was growing six to seven percent in 2018 and 2019, but as of the fiscal year end had grown over

11% for 2020, almost twice the year-over-year volume.

Likewise, FedEx Ground’s Q4 (March-May) revenue grew 10-12% YOY in 2018 and 2019, but over 20% in 2020.

UPS’s Q2 results agree: 2020 ADV increased (April-June) over 22% YOY. It is important to note that we have not reached this year’s e-commerce peak, which can easily be 200% over a shipper’s normal business. FedEx and UPS are already stressed (along with the USPS and other parcel carriers) and have imposed capacity restrictions on many large retail shippers. If they are already at capacity, that does not bode well for this peak and their performance.

Short-Term Implications Increased cost to shippers will come directly in the form of temporary peak surcharges and indirectly through UPS and FedEx giving fewer concessions during negotiation. This peak may not have the same high 2020 growth we have seen on the carriers to date (>20%), but it could be the largest peak we’ve ever experienced. One factor that may dampen some of the growth is that consumer spending is down overall. With capacity and labor constraints already impacting shipping, it’s sure to be an operationally tough peak. Expectations are that transit times will increase, damage will increase, and additional capacity constraints will be imposed.

Long-Term Implications Some interesting possibilities come into view as COVID accelerates capital spending.

This spending is likely to increase as e-commerce continues to grow as a portion of overall retail. What Amazon does will likely guide how e-commerce moves forward. If it continues to grow its parcel network, it will heighten its perception as a competitor to UPS. As UPS’s capacity constraints tighten, it could automatically free up as much as 10% of its capacity by dumping Amazon. UPS CEO Carol Tome’s Q2 comments indicate that UPS is planning to build “better, not bigger.” She indicated that one of her priorities is to increase shareholder value, and to do that, they should focus on small- to medium-sized customers. Just how these indicators play out will be seen in the coming months.

It’s difficult to predict how permanent the growth experienced in 2020 will be. As the election is decided (along with any stimulus funds), as policy changes regarding restrictions for COVID-19, and as people return to in-person school and work, there will be some physical retail rebound effect. However, the longer the restrictions remain in place, the more retailers will change to e-commerce only and more brick and mortar retail could become permanently obsolete.

What Shippers Should Be Focused On DC Systems: If there was ever a time to invest in technology capabilities and operational flexibility in e-commerce

DCs, that time is now. Systems that enable multiple carriers and sortation on multiple package criteria (destination ZIP, weight, size, etc.) will enable strategies to service e-commerce recipients.

Ship from Store: Ship from store will decrease the time inventory spends in carrier networks. The difficulty here is that carriers may restrict the number of locations available for pick-up, as this adds to their operational cost and decreases pick-up density.

BOPIS: Buy Online Pick-up In Store is a great model for the current environment. It helps retailers decrease cost by avoiding residential fees and related surcharges. It is a win for carriers as well in that it increases delivery density and

decreases the number of stops.

Transit Time Improvements: Time in transit has been important for years and will be a key differentiator going forward, as delivery lag increases with capacity constraints. Shippers that can deliver in less than two days in a more challenging environment will stand out from their peers who do not make this investment.

Mark Taylor is Transportation Consulting Manager, enVista.

With 20 years of experience in transportation — most of which have been in the parcel industry — he works with clients to guide them through contract analysis and negotiation processes.

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 11

TECHSPACE

MICRO-FULFILLMENT INVESTMENTS INCREASE TO SPEED LAST-MILE STRATEGIES

By Chase Flashman

A

mazon’s shift from two-day delivery shipping to same-day delivery in 2019 reset consumers’ expectations for even quicker last-mile delivery.

In 2020, the COVID-19 pandemic has highlighted increased delivery demand that has come from double-digit growth in e-commerce and also the need for technology investments to increase output and handle swings in demand more efficiently.

The result of these trends has become what is known as micro-fulfillment, that is, mini distribution centers in the back of retail stores or in nearby urban fulfillment centers and dark stores to serve the needs of local markets.

While such retailers as Target, Walmart, Best Buy, and Home Depot are using ship from store and in-store pickup options to fill online orders, it is coming at a price. For example, despite a 141% in e-commerce growth during its first quarter of this year, Target noted that digital fulfillment

12 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

and supply chain costs were one of the top three drivers that pressured the company’s margins for the quarter.

Technology is playing a leading role in driving down these costs. For example, through its recent investment in Deliv, Target plans to lower its fulfillment and last-mile delivery costs via sort centers closer to customers.

Online grocery and delivery provider, Fresh Direct, with assistance from Fabric, plans to move from next-day deliveries to same-day deliveries by opening a micro-fulfillment center at one of its Washington, D.C.-area distribution facilities.

According to Fabric, the facility will be able to process up to 1,000 orders per day.

Formerly known as CommonSense Robotics, Fabric utilizes robotics, artificial intelligence (AI), and other technologies to speed fulfillment practices. In late 2019, it introduced a platform model that allows its customers to build micro-fulfillment centers on their own property that use the company’s AI and robotics-based technology.

Also utilizing robotic technology, Dematic has worked with a number of customers to expand micro-fulfillment capabilities as well. Dematic is rumored to be working with Amazon to provide micro-fulfillment capabilities to its physical grocery stores.

According to publication, Progressive Grocer, Dematic is working with a number of other grocers as well including Ahold Delhaize USA and Wakefern Food Corp.

According to a Dematic white paper, software that powers any micro-fulfillment solution

should provide seamless integration with other inventory management, warehouse management software (WMS), and enterprise resource planning (ERP) systems to ensure that all stores, distribution centers, and corporate offices are networked on the same platform.

Furthermore, Dematic’s white paper stresses a major benefit to micro-fulfillment capabilities: data. Retailers are able to reclaim ownership of consumer shopping data, which can be leveraged to create personalized shopping experiences for consumers — and data is, as we all know, the key to success for today’s businesses.

Various surveys support the growth of automation. According to ARC research, the global warehouse automation market represents over $10 billion in annual spending. The research firm’s survey further found that 60% of respondents expect to invest in conveyors and sortation over the next three years. In addition, 49% of respondents expected to invest in shuttle system-robot hybrid solutions that utilize such solutions as Fabric and Dematic.

Meanwhile, in a survey from Honeywell Intelligrated, two thirds of e-commerce companies were willing to invest more in automation due to increasing consumer expectations and social distancing work processes, indicating that the pandemic has increased a trend that was already in a growth spurt.

Chase Flashman is Co-founder and CEO of ShipSights, a developer of industry-leading supply chain data analytics software & producer of enterprise-level consulting solutions.

PACKAGING

HOW AI CAN HELP BRIDGE THE GAP IN THE AGE OF COVID-19

By Bob Malley

C

OVID-19 has greatly accelerated the direct-to-consumer (D2C) e-commerce trends that were already well underway pre-pandemic: more online purchases (fewer in-store), more “eaches” picking (fewer full cases), more parcels (less freight), more cross-border, more manufacturer drop ships, faster delivery expectations, and less consumer tolerance for environmental waste.

Relying on traditional retail supply chain processes won’t cut it anymore. Just as all businesses are having to retool their systems to support virtual working conditions that have been turned upside down, all supply chain partners (including manufacturers and wholesale distributors) are being drawn into the virtual retail world.

It would be nice to know how to do long division with a pencil and pad of paper. Or to accurately forecast weather with a finger in the air. Or to have warehouse or store workers efficiently figure out how to pack a D2C order in the most sustainable, damage-free, and transportation

14 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

cost-effective way. Well, we have calculators and super computers to solve the first two challenges, but most e-commerce fulfillment packing is left to guesswork or expediency.

But cartonization AI technology uses algorithms to instantly prescribe the best way to pack based on a complex set of data points, including:  SKU dimensions, weight, and most importantly, shape  Available carton, pallet, and container sizes  Carrier dimensional weight rating factors  Business rules including % fill, don’t pack with, fragility, nesting, and others Cartonization AI can deliver the most benefits during order entry or in the e-commerce shopping cart by determining more accurately what the actual shipping costs should be if proper fulfillment controls are in place. During wave picking, a cartonization API can assist a WMS in carton selection, and in shipping, it can assist warehouse staff in executing effective palletization and container load planning.

The benefits are distinct and measurable: Reduced Transportation Costs: Without the controls in place that cartonization AIs can provide, shippers can pay twice as much on transportation by incurring unexpected dimensional weight fees with too much fill, or pay excessive minimum shipping charges for orders packed in too many cartons.

Reduced Material Costs: Corrugated and fill cost money. The price for one

carton is often 50% more than the next size down. In one recent study, cartonization AI realized a 13% savings in corrugated costs, or an average of one square foot of cardboard saved per carton. Plus, material to fill the unnecessary void.

Reduced Damage: Algorithms enforce packing rules that may be second nature to product engineers, but not to warehouse workers incentivized on throughput.

Cartonization AI can prescribe the best ways for packing items that are specific to their shape and fragility, thereby reducing damage. According to a Convey study, 57% of customers expect a full refund if their package arrives damaged.

Improved Customer Sustainability Experience: We’ve all had the experience of opening up a carton only to find a small item inside, packed in an ocean of fill.

We shake our head when we haul it out to the trash. By using cartonization AI to limit corrugated and fill, you’re sending your customers a clear sustainability message.

For over 25 years, Bob Malley has helped thousands of businesses reduce costs and streamline logistics with transportation software solutions. As managing director of Pierbridge, Inc., Bob has built an international organization that has successfully established Transtream as an industry-leading multi-carrier management platform that powers some of the largest shipping operations in the world.

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PARCEL’S 2020 CARRIER PERFORMANCE

SURVEY The latest look at how our readers rate the carriers on customer service, delivery times, and more.

By Amanda Armendariz

Annual surveys are a great way to benchmark the happenings in the industry, and it’s always interesting to compare how the data changes from year to year. 2020 is no different. There was an increase in usage of all three carriers compared to 2019, and while FedEx came out ahead in all the service categories last year, this time, UPS slightly edged ahead with respect to ontime service performance, claims processing, and refunds for late delivery. And, of course, we wanted to see how our readers feel their carriers have handled their concerns with respect to COVID-19. Enjoy!

FedEx Did you use FedEx in the last 12 months for domestic parcel shipping?

UPS

USPS

Did you use UPS in the last 12 months for domestic parcel shipping?

Did you use USPS in the last 12 months for domestic parcel shipping?

7.89%

10.26%

32.43% Yes No

Yes No

Yes No

67.57% 89.74%

91.11%

Rating the Carriers

On a scale of 1-5, with 5 being the highest rating.

Customer Service

0

Claims Processing

FedEx | 3.24

FedEx | 2.71

UPS | 3.21

UPS | 2.79

USPS | 2.88

USPS | 2.44

1

2

3

16 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

4

5

0

1

2

3

4

5

On-time Service Performance

0

Refunds for Late Delivery

FedEx | 3.29

FedEx | 2.38

UPS | 3.35

UPS | 2.53

USPS | 3.12

USPS | 2.32

1

2

3

4

5

Delivery Performance

1

FedEx | 3.15

UPS | 3.29

UPS | 2.97

USPS | 3.28

USPS | 3.04

2

3

3

4

5

willingness/fairness of negotiations)

FedEx | 3.38

1

2

Pricing (published rates for service levels,

(driver courtesy, package handling)

0

0

4

5

0

1

2

3

4

5

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 17

Other Insights into Our Industry Did you reach out to your carrier rep(s) to discuss concerns regarding how to handle volume growth, supply chain disruptions, etc. during COVID-19?

70.27% YES

29.73% NO

How important are regional carriers to your mix?

23.08%

8.82%

Somewhat unimportant Somewhat Important

17.65%

Important

26.47%

Very Important

6.06% 9.09%

1-5%

15.15%

54.55%

If you have modified your PRIMARY carrier in 2020, what was your main reason for doing so?

15.15%

26-50%

32.14%

more than 50%

If you use regional carriers, what is the primary reason for doing so?

Service

Somewhat well

7.14%

11-25%

Cost

Very well; they addressed all concerns and handled them to the best of their abilities

Not at all; we experienced significant disruptions that we feel could have been handled by the carriers to at least some extent

If regional carriers are part of your shipping mix, what percentage of parcels do you ship with regional carriers?

6-10%

15.38%

61.54%

17.65%

29.41%

Not at all important

If you reached out to your carriers regarding COVID-19, how do you feel they handled your concerns?

3.13% 9.38% 12.5% 50%

Speed Reliability Other 18 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

17.86%

21.43%

21.43%

Needed to achieve better pricing Dissatisfied with service

25%

Diversified to use more carriers Reduced the number of carriers used Previous carrier was unable to help us effectively during the COVID-19 pandemic

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By Matt Kulp

THE RETAIL REVOLUTION:

T

How Businesses Can Survive in a Post-COVID World he COVID-19 virus and pandemic has changed the world in countless ways. Although lockdown orders have been helpful to prevent the spread of the virus, the sudden halt of the economy has ravaged the retail industry in particular.

On July 3, 2019, USA Today reported 9,100 US retail store closings, a total that was 55% higher than 2018 and, at the time, categorized as apocalyptic.

Flash forward to July 23, 2020 and the devastation of COVID-19, and the US has already seen a staggering 11,691 store closures, and the number is expected to continue to grow.

With so many retail spaces now vacant, what will become of the empty brick and mortar buildings? In addition, what are retailers doing now in terms of adapting to the “new normal” to avoid becoming another COVID-19 statistic?

The Retail World: Pre-COVID-19 Versus Today Prior to March 2020 and the beginning of the COVID pandemic in the US, there was reason to believe that the 2019 spike in store closings was largely the result of restructuring. For example, when Gap announced it would be closing 154 stores, it also reported

opening 115 new locations. Additionally, 2,100 of the 2019 closings were from just one retailer, Payless, and blamed on the company’s 2017 bankruptcy and over-dependence on brick and mortar locations rather than embracing e-commerce. As the retail industry began 2020, speculation in terms of how to succeed seemed to be tied to opportunities for further expansion and fully embracing e-commerce.

Once the pandemic took over and most of the world was shuttering in place, brick and mortar stores took a huge hit. Issues included additional safety and health requirements to protect both customers and shoppers, inventory problems due to failures in the supply chain, and forced government shutdowns of non-essential businesses.

All the while revenue decreased, expenses increased, and there seemed to be no end in sight any time soon.

In addition to changes and closings among retail stores, brick and mortar banking options have been limited, with many branches either severely limiting their hours or shutting down operations completely. Now that bank customers are more accustomed to mobile banking options while their branches are closed, many banks are considering a smaller brick and mortar footprint in

20 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

their post-COVID future. For example, Pennsylvania-based PNC bank has closed 24 of its 2,300 branches since March 31, and planned to close 30 more by the end of August and 39 more in September as of the time of this writing.

The Big Get Bigger While it seems that e-commerce as a whole would benefit from retailers shutting down stores, CommerceNext reported that in reality, 64.5% of online businesses have seen less, rather than more, online business. That is, unless you are Amazon.

Consumer spending on Amazon is up 35% from 2019, and by mid-April, it had already hired 80,000 new workers to help with the increase. With stay-at-home orders in effect, more people are taking advantage of grocery deliveries and, once again, Amazon is at-the-ready with its Amazon Fresh delivery service.

While this huge boom in demand is great for Amazon, the sudden uptick has presented problems in terms of the supply chain and distribution. Flexibility, adaptability, and creativity have all contributed to finding answers to the distribution dilemmas. One answer is turning empty stores into stores again, but for home delivery.

In 2019, before COVID-19 became a household name, Amazon began

converting vacant shopping malls into fulfillment warehouses. By using these locations, Amazon was able to place its network even closer to areas not previously in the vicinity of its distribution centers and better ensure its promise of fast delivery to even more customers.

This most recent blow to brick and mortar competitors by the online giant will most likely be exacerbated by the pandemic, as more retail space goes empty just as Amazon’s market share and customer demand skyrockets.

What Is Old Is New Again With no end in sight to social distancing and reluctant in-person shoppers, home delivery and curbside pick-up demand are projected to continue for at least the near future. Moreover, once consumers become accustomed to this new way of purchasing, they are likely to continue the practices even beyond the pandemic. However, these so-called new trends are not necessarily new; it is more like what is old is new again.

In the early 1900s, grocery shopping

consisted of approaching the counter at your local market and requesting your items from the clerk, who in turn would retrieve goods for you. If you were privileged, you might not even leave your house, but rather call the grocer to request your items. There was no such thing as pushing a cart through the aisles, and you certainly did not touch produce or reach for packaged goods on shelves.

Technology has clearly improved the current purchasing and delivery process.

For example, online ordering has greatly improved the efficiency of delivery service. In addition, product selection today is vastly greater than what was available in the early 1900s. Moreover, with the ability of today’s retailers to track massive amounts of customer data, consumers have access to countless product recommendations based on their buying habits and preferences. The sheer amount of research and sophistication used to separate the shopper from their dollar is greater than ever before!

However, there is no denying that the transaction is much less personal today

in terms of interacting with corporations versus previously dealing with “Momand-Pop” shops. In the 1900s, there was a large likelihood the retailer and consumer shared, or had family who shared, activities and organizations within the community. Most delivery options now transpire online without any human interaction at all.

The Next Stage of the Retail Revolution At some point, the separation of Amazon. com retail from Amazon Web Services (AWS) seems inevitable. When that happens, e-commerce competition will heat up, with or without the influence of a pandemic. It will be interesting to see how old-fashioned American competition, innovation, and drive force the next retail revolution and exactly what new changes we are “in store” for.

Matt Kulp, EVP is Managing Partner, St. Onge Company. Please visit www.stonge.com for more information.

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 21

AVOIDING COMMON CARRIER AGREEMENT PITFALLS Sometimes, it’s not what is in your contract that can trip you up; it’s what’s not in it.

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t’s no secret that parcel agreements are complex. The sheer quantity of services and surcharges to which discounts can apply make this mostly unavoidable. With typical agreements ranging between 15 and 30 pages or more, it’s easy to misunderstand or simply miss critical elements, which can greatly diminish the discounts offered.

Let’s look at a few of the most commonly encountered.

Service Refund Waivers With the exception of SmartPost and SurePost packages, as well as system-wide exclusions during peak season (or unique circumstances like COVID-19), every single shipment has an on-time guarantee. If the carrier delivers

BY JAMES MATTHEWS the package late, the shipper is entitled to a credit of the shipping charges… unless the carrier has inserted language in its agreement prohibiting the shipper from requesting a refund. The carriers’ position is that the discounts offered squeeze their margins too much to honor refunds. Don’t fall for it. Your customers hold you accountable when you fall short of expectations. Hold UPS and FedEx similarly accountable.

FedEx Money Back Guarantee language can be found under the “US Pricing Provisions” sections within its agreements. The language will state either that the shipper “is entitled” or “waives” its ability to request a refund.

The language is listed separately in the respective Express and Ground pricing

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attachments. While most commonly they are the same, it’s possible to have a waiver in one section but not the other.

UPS waivers can be found in varying locations. They might be in the body of the agreement or referenced in a separate addendum. UPS might instead insert “Performance Threshold” language. This is positioned as a rebate of shipping charges if UPS fails to meet quarterly, on-time performance benchmarks. Make no mistake, this is still a waiver.

Surcharge Discounts Ineligible for Certain Services It’s one thing to be aware that a specific surcharge (e.g. residential) might apply to ground services but perhaps not for express. It’s another matter to discover that the discount applies to some, but not all, ground shipments. This happens

with alarming regularity. In addition to having separate terms for Express and Ground, FedEx agreements similarly categorize surcharge discounts by FedEx Ground (commercial shipments) and Home Delivery. Many shippers see a Residential Charge discount in their contract and presume that it applies regardless of which ground service is used. This is an expensive presumption.

In order to maximize operational efficiency within its commercial ground network, FedEx provides disincentives to shippers who tender residential shipments to it. This is done by charging a higher base rate for the residential surcharge for Ground versus Home Delivery, as well as stipulating that discounts offered apply exclusively to those manifested as Home Delivery.

To the unaware, it could mean the difference between a non-discounted residential fee of $4.65 and one that’s $4.00 less a discount. This scenario plays out with other surcharges as well.

Rural delivery, additional handling, and other size and weight related fees warrant careful scrutiny. Similar care needs to be paid to UPS agreements with regards to which billing options the discounts apply.

A rural surcharge might be discounted for outbound, but perhaps not third party.

Non-Discounted Returns It’s reasonable to presume that inbound returns are eligible for the same discounts as outbound, but it’s often not the case. Part of the confusion involves understanding the difference between “inbound” (or freight collect) and “returns.” By “returns,” the carriers mean that the receiver is responsible for not only the shipping charges but also for generating the label used by the shipper.

“Inbound” would be when a vendor ships something to you and the charges are billed to your account. UPS almost always mirrors the outbound discounts, which are noted as RS or RTP as billing options. For FedEx, look for RMOB and

RM3P payer types (‘RM’ referring to Returns Manager). Also be aware that even if return discounts are included in the FedEx agreement, they will likely not be extended to Earned Discounts.

By their very scale, UPS and FedEx contracts require careful scrutiny.

Even then, it’s easy to overlook areas that appear fine on the surface. As is often the case, it’s not always what’s contained in the agreement that trips you up, it’s what’s not in it.

James Matthews is a founding partner of ShipRx. For more than a decade, he has helped shippers across the US improve their pricing agreements, eliminate wasted spend, and improve operational efficiencies. Prior to starting ShipRx, James was a 21-year veteran at UPS where his roles included accounting, sales, business planning, and pricing. He can be contacted at james@shiprx.com.

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 23

STRATEGIES FOR SURVIVING PEAK SEASON DURING A PANDEMIC

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By David Sullivan

o say that 2020 has been a challenging year might be the understatement of the century.

The disruption to our lives brought on by the COVID-19 pandemic has been far-reaching and pervasive. It has touched us all in some way and continues to do so. Just as we all have had to make significant personal efforts to stay healthy, keep our families safe, and get our kids back to school (whether in-person or virtually), parcel shippers have gone the extra mile to get their products delivered to customers in a timely, cost-effective manner — and that’s been challenging.

Peak season came early this year, and there was simply no way for shippers to predict it. And it’s not over. The artificial peak brought on by the pandemic will roll into the natural, Q4 peak with no rest in between for the weary. What are some lessons that parcel shippers learned in Q2 that might serve them well in Q4? How can shippers use those lessons to

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ensure that product gets picked up and delivered in a timely manner (and at a reasonable cost) with minimal disruption to operations? Let’s discuss some of those lessons here.

The overwhelming, unprecedented shift in retail from brick and mortar to e-commerce was seismic. And probably not temporary. As stay-at-home orders from local governments proliferated, consumers were forced to do most of their shopping online, and brick and mortar retail stores were shuttered. A consumer shift that had been underway for years was dramatically accelerated. One study indicated that e-commerce, as a percentage of total retail sales, grew as much in eight weeks (March and April) as it had in the past seven years! Traditional e-commerce shippers saw huge order increases, and many traditional B2B shippers were forced to convert their operations to allow for B2C shipping and a chance at survival.

Perhaps the most important byproduct of this phenomenon was that the national parcel carriers, UPS and FedEx, were slammed with unplanned, peak level volumes. They struggled to keep up and delivery performance suffered. Furthermore, they were forced to cap volume from key, large volume shippers in certain regions of the country. This left parcel shippers, especially those who use one carrier for most of their volume, in a serious bind. Those shippers learned lessons, however, that other shippers can use to their advantage going into Q4.

The most important lesson learned for many shippers during the COVID pandemic is that single sourcing can be a recipe for disaster. A recent survey of large volume parcel shippers indicated that their most pressing concern heading into peak season is their ability to “Provide a positive customer experience.” In order to do that, shippers must know that packages will be picked up, processed, and delivered in a timely manner. By the time shippers realize that their primary carrier is experiencing capacity issues, it’s usually too late to do anything about it.

Consider Branching Out Now is the time to start establishing relationships with secondary and tertiary parcel carriers. If your volume warrants it, you can likely divert packages to any number of regional carriers at a cost that is competitive with your primary carrier.

Smaller shippers may need to make the decision to divert volume to a regional carrier at a cost increase for the sake of ensuring that packages will get picked up and delivered in a timely manner. After all, it’s less expensive to keep an existing customer than it is to win a new one. DHL, USPS, Newgistics, and others can also be viable options for certain shippers.

But you must start having those conversations with alternative carriers now. Waiting until next month is too late.

Of course, understanding whether dual carrier sourcing is an appropriate strategy requires a certain degree of forecasting capability. While peak season forecasting is an exercise with which large volume e-comm shippers are already familiar, it will be critical for all shippers who expect any degree of peak volume surge in Q4 and beyond, to understand forecasting models. It is likely, given their experience during the pandemic, that carriers will expect more shippers than ever before to share some level of

peak forecasting. Carriers will want to plan accordingly to avoid the capacity issues that plagued them this past spring.

If your operation is not prepared to forecast peak season volume and to share those forecasts with your carriers, now is the time to start building that capability. Not only will it be critical in helping to understand peak carrier requirements for your business, but it’s also likely that your carrier may demand it.

Failing to accurately forecast peak volumes can result in financial penalties from the carrier. Shippers will need to be able to project weekly volumes accurately within a given range. Of course, like most aspects of carrier pricing, any financial penalties which carriers may attempt to attach to this process are negotiable.

Lastly, but equally as important to many shippers, is the ability to analyze, understand, and mitigate the impact of what will most certainly be another round of peak season surcharges introduced by the carriers. Or, depending on the lifespan of the COVID surcharges currently in place, shippers could experience a continuation of those, expanded to include new, broader reaching surcharges. A few of the more significant COVID surcharges were limited to shippers who reached certain thresholds in terms of number of occurrences of the condition that triggered the surcharge or who experienced incredibly dramatic growth in certain types of volume over a period. It’s unlikely that Q4 peak surcharges will carry the same requirements, so the impacts will be more broadly felt, as they have been in the past.

Experience, however, tells us that all surcharges are negotiable, even those brought on by a pandemic or Q4 peak volumes. Shippers should first understand the surcharge.

Who does it apply to and when does it apply? Next, they should analyze the potential impact to the organization and build a business case with the carrier for mitigation. But, like everything else we’ve discussed, planning is key. The earlier you start, the better off you’ll be.

These are challenging times, and it’s likely to get even more challenging as we head into Q4. But savvy shippers learned lessons this spring that will serve them well going forward.

Learn from those shippers and follow their lead. Advanced planning, accurate forecasting, carrier diversification, and timely negotiation backed up by data and analytics are the keys to ensuring that shippers are able to navigate their way through another peak season.

David Sullivan is the Vice President of Professional Services for Shipware, LLC, a San Diego-based parcel consulting firm that specializes in cost reduction and recovery services. Shipware has helped some of the world’s largest parcel shippers reduce costs by an average of 25% through a combination of invoice audit and recovery, rate and contract evaluation and optimization and carrier and mode optimization.

CRITICAL CHECKLIST ITEMS FOR IMPLEMENTING A WMS How to prepare to implement new warehouse technology with your WMS partner

BY CHELSEA MORI

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ongratulations! Your business just purchased a new warehouse management system (WMS). This is one of the most important decisions in moving away from out of date paper processes and spreadsheets to improve productivity.

The future of warehouse automation will enable the warehouse to better serve your customers, operate more efficiently, and grow your business faster.

Now that there is a commitment to running your warehouse efficiently with technology designed to streamline operations, it is important to implement the new software by starting off on the right foot. But what is the first step? Preparing for a smooth transition and a successful implementation, all while making sure the warehouse and team are prepped and ready to go, will require planning, coordination, and the right resources.

To help navigate this critical project, use this checklist alongside your WMS technology partner for a successful implementation.

Build the Right Team Selecting the right resources may be one of the most important decisions when looking to deploy new technology. The implementation team is crucial to ensuring project success.

This team will determine scope, confirm business requirements, communicate project expectations, and execute a timely implementation.

This team should consist of a project lead, warehouse operations or project manager, database manager, and department heads. Each of these members plays a significant role in making sure your warehouse business achieves its goals and runs a straightforward project.

In some cases, a warehouse may hire a consultant to help manage a WMS implementation. This can help key stakeholders prepare for launch by utilizing a consultant’s valuable experience to help guide teams and manage expectations.

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Implement Best Practices Change is hard. However, it can also be good for business. Best

practices offer warehouses a fundamental foundation to improve efficiency, reliability, and visibility for warehouse teams and customers.

When implementing a WMS, understand and learn how to get the most out of the software. This can be achieved by building industry best practices directly into the day-to-day processes.

Use this time to optimize your warehouse and ensure workflows are designed to scale alongside business goals. This should include receiving, picking, packing, shipping, and even billing. The implementation team should ask how the business currently supports these work functions and if there are ways to enhance warehouse layouts to increase productivity. What fulfillment types does the warehouse support (e.g., B2B, e-commerce, or omnichannel)? How can multiple customers be supported using best practices that have been tested and accepted by logistics professionals to increase satisfaction? When using best practices, the warehouse will have the added benefit of tested and accepted workflows to best serve their customers.

Data Migration and Backups Whether a warehouse is moving from Excel, a homegrown system, or migrating from one warehouse management system to another, it will will need a plan to manage its data.

This is where having the right team is going to make a big impact. A database manager will ensure that existing data is safe, secure, and intact prior to implementation. This role will help adapt a new data scheme, map data to the new system, and make sure it works for the new set up and workflows.

Note that in some cases, missing data must be added, or existing data modified to meet any new system requirements.

As always, make sure the business has a backup of all data prior to migration.

This will safeguard everything should something unexpected happen.

For warehouses who don’t have an IT team in-house, they can usually work directly with their WMS partner or consultant to ensure that the right skills and expertise are available for this important step.

Training and Testing Training is one of the most important aspects of a new WMS implementation. This includes not only warehouse workers, but also customer service reps and billing reps, and even warehouse customers — especially if there is a customer portal where they can self-service reporting and access inventory.

Proper training will ensure everyone is familiar with not only the new technology, but any new workflows, scanning capabilities, or layout changes like dedicated picking and packing stations for increased productivity. This is also the final test for the WMS to ensure the system works as designed and there is final buy in from the entire team. Testing may also include creating core key performance indicators (KPIs) to track warehouse efficiency and productivity. KPIs will help the business understand where to optimize or make changes to any workflows that are performing as planned.

In many cases, the new WMS partner will offer administrator training, recorded

trainings, or on-site training for warehouse workers. Make sure the implementation team plans and schedules training prior to launch as well as continued sessions post-launch to answer any unforeseen questions the team may have.

Go Live Checklist You’re ready to go live! Best practices have been added to ensure scalability and growth to align warehouse technology and the business, warehouse data was scrubbed and migrated, and the team has been trained. What’s next?

Before pulling the trigger, be sure to do one last walkthrough. Touch base with key stakeholders and make sure they are all on the same page. Test the system and networks one last time to confirm data is flowing. Speak with warehouse staff to answer any last questions or offer additional training where needed. And lastly, make sure there is an up to date data backup just in case.

Once the business goes live, monitor warehouse people, process, and

technology to make sure everything is aligned and working as expected.

Now that the implementation is finalized and the new warehouse management system is running smoothly, reap the benefits and calculate the return on investment. From improved efficiency and productivity, enhanced best practice workflows to meet customer demands and increase satisfaction, to revenue gains from cost reductions and better performance across the board, the warehouse is ready to grow and improve the bottom line. Good luck!

Chelsea Mori is Director of Marketing, 3PL Central and has over 17 years of B2B experience. For the past four years, she has been working with logistics leaders to help share best practices on how to optimize warehouse efficiency and increase productivity. In her current role, Chelsea is responsible for thought leadership, market education, and resources including the State of the Third-Party Logistics Report, Peak Season Playbook, and The Practical Guide to Growing Your Warehouse.

Primus Law Office, P.A. and transportlawtexts are pleased to announce the launch of

Freight Claims: A Virtual Course.

This four hour on-line, on-demand course is a deep dive into the laws and techniques for both pursuing and defending freight claims.

The course is designed so that it can be understood by persons new to claims as well as to provide vital information for transportation professionals, attorneys, insurance professionals, and others with a medium or advanced knowledge base. $495

PARCEL readers use promo code: parcelreader and pay only $396 For more information and to take advantage of this offer please visit www.transportlawtexts.com Questions? info@transportlawtexts.com

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 31

2021 PARCEL BUDGET PLANNING: A ROADMAP TO NAVIGATE UNCERTAINTY

By Nate Skiver

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f you manage a parcel expense budget, 2020 has likely left you searching for answers, often landing on a Magic 8-Ball response of “Ask again later.” Unfortunately, parcel expense management is likely to become more challenging in 2021.

But all is not lost. Executing a diligent budgeting process in Q4 can provide valuable insight into the expense risks and (potential) cost savings opportunities to mitigate 2021 bottom line impact.

Below are three key areas of focus to consider when building your 2021 parcel expense budget.

Parcel Budgeting Basics Year-Over-Year (YOY) Service Mix and Package Characteristics This budgeting staple is more critical than ever, given the economic volatility and impact on revenue forecasts, let alone 32 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

parcel volume. Contributing factors to YOY cost per package (CPP) variance is the focus. Key data points to measure include:  Carrier service volume mix: Did volume shift from Ground to Air, or Commercial to Residential? Were more deferred services used versus last year?  Package weight and zone: What changes occurred with average package weight, and did these changes affect service volume mix (e.g. shift to <1lb services)? If average zone changed, what was the CPP impact?

While the “what” of this process is important, the “why” may be the most critical aspect. Taking the basic example of a volume shift from Ground to Air, say in Q2 of 2020, calculating the cost impact is pretty straight forward. However, if the root cause of this shift is not captured and incorporated into the 2021 budget (either by normalizing if it was an anomaly, or

including in Q2 if it is validated), it may lead to unnecessary research and budget inaccuracies.

2020 Milestones, Variances, and Anomalies Identifying events or milestones that triggered expense changes, measuring the duration and quantifying the expense impact, as well as determining if these events will be repeated in 2021 is required. Carrier rate changes fall into this category. Scheduled rate increases, via a carrier contract and/or a General Rate Increase (GRI), should be notated, as should unplanned rate increases that may have occurred (e.g.

UPS and FedEx peak surcharges).

Additionally, the parcel expense impact of significant 2020 operational changes, such as adjustments to distribution center operations or closing store locations, should also be taken into consideration when planning 2021 expense.

Risks and Opportunities Incorporating risks and opportunities into the budgeting process is intended to provide guidance on potential budget variance, but these items are not defined well enough to include as an actual budget item.

Examples of risks include higher than expected carrier rate increases, loss of pricing discounts due to decreased volume, and increased expedited shipping expense (e.g. due to order processing delays).

Despite the gloomy expense outlook, budget opportunities may exist as well, and can include carrier rate reductions (through an RFP), shifting volume to more deferred services, and reducing split shipments. Again, these are items are prospective and not yet executed (although possibly planned).

Rate Increase Forecast Performing a rate increase forecast can provide a wellgrounded budget baseline. Performing this exercise also provides a more granular hindsight view when measuring budget expense variance.

A rate increase forecast should include both base rates and accessorial charges (each should be broken out by carrier and/ or service):  Base rate increases: Both the percentage increase and calculated CPP increase, as well as effective date (scheduled carrier GRI and/or contract effective date) should be included.  Accessorials: Identify the highest impact accessorial charges (e.g. residential delivery, fuel surcharge), estimate the net charge increase amount (drawing on recent annual increases), and budget as a CPP increase.

The process of forecasting GRI and accessorial increases can be daunting for those who have not done so previously. On the next page is an example of a basic table used to calculate a portion of 2020 rate increases for three FedEx services. Please note, this example is not precise as the pricing components shown are calculated separately and do not take into account compounding effects of some charges (e.g. fuel surcharge).

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 33

TIP: If you have a third-party parcel expense management provider in place, enlist their services and expertise to advise on and/or perform this process.

2021 Parcel Pricing Outlook ("Not so Good") Unfortunately for parcel shippers, many of the 2020 parcel expense impacts may continue into 2021, and perhaps indefinitely, as parcel carriers continue to implement pricing strategies to combat rising costs and retain margin. Below is a high-level view of 2021 parcel expense headwinds, to which the Magic 8-Ball response is “As I See It, Yes.” Increasing GRIs While UPS and FedEx may find other means of implementing greater rate increases compared to previous years (see below), it is not unreasonable to think that the “average” 4.9% base rate increase we have seen in recent years could soon be viewed as a bargain. However, the annual USPS rate increase (often announced in October and, pending PRC approval, effective in late January) also bears significant risk for shippers. Mounting USPS financial losses, new leadership, and continued external pressure could result in significant rate increases for direct USPS products (Priority Mail, First Class Package) and Parcel Select services utilized by postal workshare partners (e.g.

UPS SurePost).

continuing indefinitely. For budgeting purposes, a prudent approach is to include an assumed peak surcharge for the full 2021 budget year.

Sustained Suspension of Guaranteed Service Refunds (GSR) Speaking of indefinite changes, will GSRs, which were suspended in March by UPS and FedEx, be reinstated by 2021 (or ever)? If incorporating the answer into a 2021 parcel budget, I would plan on “Don’t Count on It.” Carriers continue to be challenged by higher and less predictable volume levels, leading to less consistent delivery performance. Until or unless carrier performance stabilizes, GSRs will not return.

Developing an effective 2021 parcel budget will be challenging, even for the most experienced finance professional. However, using a combination of basic budgeting principles and parcel pricing expertise will enable you to avoid the Magic 8-Ball response of “Cannot Predict Now” and perhaps even reach “You May Rely On It” status.

Developing an effective 2021 parcel budget will be challenging, even for the most experienced finance professional.

Sustained Peak Surcharges Although these surcharges are a misnomer (unless we are now considering any period of high volume “peak”), given that elevated parcel volume levels are here to stay, parcel carriers have no incentive to relax or remove peak surcharges. In fact, it would not be surprising to see some of the qualifying criteria (assessed by shipper as increased volume compared to early 2020 levels) removed ahead of what is usually considered peak season (five weeks in Nov/ Dec), and some form of broadly applied “peak” surcharges 34 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

Nate Skiver is the founder of Level Playing Field Spend Management, a parcel consulting company which provides value for its clients through creating parcel shipping programs which reduce expense, while delivering a positive customer experience. Prior to founding Level Playing Field, he spent more than 15 years focused on building, executing, and managing parcel transportation programs for leading global apparel companies. He is also a member of our PARCEL Forum Advisory Board. He can be reached at nate@lpfspendmanagement.com or visit www.lpfspendmanagement.com for more information.

APPLICATION ARTICLE

Evolve Parcel Performance with a Personalized Playbook Todd Benge, Transportation Insight Vice President - Parcel Operations We are experiencing an unprecedented time, and for many shippers, yesterday’s parcel strategies no longer apply. It is time for a new playbook. To succeed, you need to leverage specialized analysis and deep industry expertise to engineer parcel programs that protect profit and enhance customer experience.

Dynamic Landscape Requires Evolving Solution The global pandemic not only accelerated consumers’ ongoing adoption of e-commerce, it flipped the transportation balance of power. Parcel network volumes bloat with digital buyers’ residential shipments, eclipsing the carriers’ traditional profit centers in the commercial realm. In response, transportation providers seized new control in determining their own financial fate. An eternal “peak” season cost environment is generating new risk for shippers of all sizes.

While FedEx and UPS try to offset B2B revenue loss by engineering new costs, the straits for the U.S. Postal Service are dire. If you are a smaller shipper diving into the e-commerce wave, your budget-conscious reliance on the USPS will become a greater burden. Rates are climbing and service deteriorates.

Larger shippers face their own challenges. New expectations pressure profit margins for manufacturers and distributors racing to provide drop-shipping service and on-time delivery to the world’s largest retailers. Managing your transportation between multiple carriers is a must, but so is maintaining an up-to-date understanding of the evolving cost to serve at the item-level.

More than ever before, rate changes, new fees and increasing layers of pricing complexity impede your ability to protect profit.

At the same time, capacity challenges across the small package environment amplify pressure on other modes. Increasingly,

shippers navigate between carriers and lanes to achieve service levels that protect customer experience and facilitate improved transportation cost control.

To maintain performance, you must understand transportation network trends, as well as your own shipping characteristics.

That requires analytics heavy lifting that is often outside many shippers’ capabilities. You also need a level of industry expertise you may not possess on staff, especially if you are a smaller shipper.

Can You Afford to Wait?

Now is the time to build a better strategy to keep product moving and safeguard top-line revenue essential to your organization’s sustainability. Do you have the technology, the tools and the team required to evolve your parcel program performance even in the face of global disruption?

We are here to help.

Transportation Insight works as a specialized extension of your team offering personalized solutions that respond to your specific challenges. Relying on technology-enabled data collection and analysis influenced by expert insight, we design parcel shipping strategies based on your cost and service goals.  Customized network design based on strategic assessment of your needs  Contract optimization that accounts for rates, terms and profitability and improves alignment with carrier networks  “Identify and repair” audit methodology that eliminates the refund paper chase  Ongoing nimble analytics and engineering that mitigates costs and carrier change impacts Whether you need a complete parcel plan that scales with demand fluctuations, or you need an expert’s viewpoint on emerging cost drivers that require out-of-the-box solutions, our team of parcel experts puts performance evolution at your fingertips.

To master your supply chain, contact Transportation Insight today for a parcel consultation focused on giving you competitive advantage.

www.transportationinsight.com info@t-insight.com 877.226.9950

HOLIDAY PURCHASE RETURNS: ARE YOU UP TO THE CHALLENGE?

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By Josh Duane

he holiday season of 2020 is going to be different than any that have come before it. The pandemic has changed the way that customers shop. E-commerce sales have increased significantly, with some companies seeing triple-digit growth. As businesses are starting to adjust to the change in the buying habits of their customers, a new challenge is starting to arise â&#x20AC;&#x201D; an increase in returns.

Returns have always been a pain point for fulfillment centers, but this holiday season will test even the most seasoned reverse logistician. A 2019 study by UPS reported that 39% of online shoppers in the US often return their online purchases to brick and mortar stores. With the current global environment, a large portion of returns that were once handled in store are now going to be shipped back to the fulfillment center. Being prepared for

36 PARCELindustry.com ď&#x20AC;ł SEPTEMBER-OCTOBER 2020

the coming influx of returns is going to be vital in minimizing the loss in profit margins that comes with handling returns.

Clearly Defined Returns Policy Customers expect easy. From the ease of shopping on their phones to the process in which they return items, all aspects of the shopping experience are expected to be easy to navigate.

According to BigCommerce, 49% of online shoppers review the returns policy before purchasing online. Having an easy to locate, clearly defined, and simple returns process not only makes the decision for a customer to make the initial purchase easier, it also increases the chances of repeat business from that customer. While returns, in general, may be seen as a profit-losing business segment, clearly defining the process and making it easy on the customer can help recoup some of the losses by generating future sales with the customer.

Returns Handling Fulfillment centers, by nature, are great at fulfillment but are frequently not as efficient when it comes to handling returns.

Often, reverse logistics are an afterthought and are seen as a pain point for the operation. This holiday season is going to serve as an eye-opening experience for many companies who are not prepared for the increase in returns. This perceived pain point will quickly turn into a serious issue for those who are not prepared. So, what can be done to help ease the burden of handling returns?

Categorization of items is key. Do not have your employees waste time researching or trying to decide what to do with a return as it comes in. Have well-defined rules for product type and condition so that associates have clearly defined procedures for handling the item as it is received.

Be organized. Clutter slows the returns process down.

Anticipating how to receive, store, work, and get items back into inventory will limit the clutter, speed up the process, and help prevent loss or additional damages to items. Pre-plan and allocate enough space to support the peak surge, which is often much greater than the standard flow.

2

Return items to stock quickly. The faster you can get an item returned to inventory, the better chance you have for selling the item. No matter if the item will be resold as new or discounted, getting it back into your inventory will help minimize the loss experienced through the return.

3

Be prepared for handling waste. Returns generate waste. One of the (often overlooked) side effects of returns is the amount of waste material and product that does not go back into inventory. Having easy to use and clearly defined systems for recycling, trash removal, and for the handling of non-inventory product will speed up the process.

4

Social Distancing and Returns The days of setting up rows of temporary tables and having associates elbow to elbow to work through returns are over.

Social distancing in the workplace is here. Keeping employees distanced and implementing increased employee safety plans during peak season is a new challenge that all companies are going to have to address. Putting plans into place prior to peak will be paramount to a company’s ability to be successful during their busiest time of year.

Plan for Now While Planning for the Future With customers not only continuing to increase the amount of online shopping they do but also the type of items they are buying online, many retailers are in a position where they must adapt to survive. With peak season rapidly approaching, many are going to be left scrambling to update their processes to help with the continued change in consumer buying behavior.

Regardless if the change is in the associates’ SOPs, the equipment used to process returns, the software used, or a combination of all of the above, it is important to keep in mind that while reacting to the immediate need of preparing for this holiday season, you still need to plan for the future.

Repurposing existing systems and equipment or installing flexible equipment is often possible to handle immediate needs. When making changes for future growth, it is important to incorporate systems that are modular, flexible, and scalable.

Who knows what the next major event will bring? Building an infrastructure to handle the increased returns that will come with the 2020 holiday season while preparing your business to be able to adapt to any future challenges will be essential to ongoing success.

Josh Duane is the Director of Sales for Hy-Tek Integrated Systems Southern Operations Division. Hy-Tek designs and implements material handling and automation systems across a multitude of industries. Josh can be reached at josh.duane@hy-tek.com.

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 37

BY ED ROMAINE

TIPS TO OPTIMIZE YOUR WAREHOUSE… TODAY AND TOMORROW

O

ptimizing your warehouse to meet your business requirements has certainly taken a twist since COVID and social distancing have become a daily reality. Many of the existing issues are relevant; however, the way organizations execute and measure their successes have changed due to positive COVID testing. This certainly alters the return on investment calculation, which ultimately dictates what will be prioritized, funded, and implemented.

In today’s world, social distancing translates into spacing your warehouse operators far enough apart so not to transmit COVID. This is a direct contradiction to the previous “solution” of throwing labor at the problem.

Operators picking from rack, elbow to elbow, and maneuvering carts through aisles like an amusement park’s bumper car game is rampant. Flooding a zone(s) with people to offset peak periods, flash sales, and bad processes was very often the fix.

Today, utilizing the right type of automation, planning zones, and cells correctly can not only allow proper social distancing, but it will reduce labor requirements, lower the cost per pick, increase accuracy and customer satisfaction levels, all while reducing the risk of a COVID shutdown.

A Look at the Offerings Keeping that in mind, it is wise to remember that not all automation is equal. The pre-COVID trend of utilizing automation that is flexible, lean, easy to use and allows a rapid deployment makes even more sense today. Very often these benefits translate into using robotics and autonomous mobile robots (AMRs).

Equipment is not bolted to the floor. Paths and workflows can therefore be changed dynamically to meet evolving business requirements with its ever-changing environment.

38 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

Goods-to-Person AMRs can use existing shelving and store and retrieve totes to a workstation. These systems start incredibly simple with very few robots and handle hundreds of SKUs. They can also be scaled up to a much larger system, storing and retrieving million(s) of SKUs. Likewise, AMRs can deliver pallets or shelves with inventory to a workstation utilizing an integrated pick-to-light or augmented vision system and provide incredible batch picking efficiencies. These robotic systems are very scalable and can be deployed rapidly. Most important, they provide the much-needed social distancing.

Utilizing document inserters and automated bagging and boxing systems allows organizations to take control of their pack-out areas and reduce labor while increasing efficiencies.

Proper slotting can also be utilized to promote social distancing. In the old days (pre-COVID), proper slotting practices made sure you had the right SKUs located at the most optimum picking locations. Today that is true, but it can also be used to control where operators make their picks (helping to keep distance between them). For example, you can take your top SKUs and create multiple rapid-pick locations. So instead of having very few pick locations for the most popular SKUs, you can spread them out and control the number of pickers going to those locations. This type of slotting logic can increase pick speeds while keeping employees distanced. Likewise, moving to a pick and pass operation and consolidating downstream can make sense. But you ask, how do I convey the orders efficiently to the next zones? This historically has been done with conveyors but can also be done utilizing autonomous mobile robots.

Order and inventory accuracy is as critical as it has always been. Pick-to-light and voice have been key technologies for

this, but the new augmented vision provides these benefits and more and at a lower cost. Augmented reality (AR), artificial intelligence (AI), and computer vision are integrated into a single device to provide visual instructions to the worker, enhancing productivity and reducing errors. It is also sometimes referred to as augmented vision order picking.

Implementing augmented vision allows an operator to wear AI glasses that will not only direct them to their next pick by displaying arrows but will then display a green box on the correct location. The operator touches the side of their glasses to verify the position, the quantity to pick, the SKU number.

An image of the SKU can be instantly displayed to confirm the correct item has been picked.

WES, SKU, and More; Oh My! Another pro tip to consider is re-evaluating your WMS process “wish list” using a Warehouse Execution Software (WES) lens. Virtually every operation has a list of applications, processes, reports, and more they wish their WMS would provide. Many organizations have reviewed these wish lists with their WMS provider and simply cannot find the budget for such large expenditures. This is always the case in tier one and most tier two providers.

Organizations are now realizing that by layering a WES software into their operations, they can not only get this wish list at a much lower cost but can also create additional operational efficiencies that drive the return on investment.

Simply put, WES providers often work at far lower rates than the WMS providers.

When investigating the WES path, evaluate your business utilizing wave, waveless, or overlapping waves methodologies.

The hype behind waveless picking is sometimes warranted, but many times its benefits are greater for the first 85% of the wave and taper off. Overlapping waves picking encompasses the benefits of both wave and waveless to increase efficiencies for 100% of the wave. This can be easily demonstrated by utilizing the WES emulator to prove the efficiencies.

SKU rationalization is another tip that is ageless, but more relevant today. Many operations have changed with the current COVID situation. Understanding your business and how it relates to your SKU population needs to be evaluated. SKU rationalization is the process of analyzing the impact to an organization that will come from adding, discontinuing, or maintaining a specific product or total product line(s).

The goal is to understand your inventory impact, and to use it to rationalize, or justify, the course of action that is required to add a product, discontinue it, or continue as is. At the center of SKU rationalization is the ability of an operation to understand the performance of its existing SKUs (a process also known as SKU profiling). By understanding how your existing SKUs are performing and what percentage of revenue they contribute, it is possible to determine which, if any, products can be discontinued without impacting your overall profitability, while also offering insights into how new (similar) SKUs may perform. With today’s events, this exercise can be more vital to profitability than ever before.

A truly comprehensive capacity analysis will evaluate the physical capacity of your infrastructure and facilities, your

production or throughput capacity, and your mechanical capacity. With all the changes today, this exercise may be eye-opening. A capacity analysis is determining the capacity of your operation Physical capacity of infrastructure and facilities shows how much space is available for work processes and storage of inventory. Production/throughput capacity is determining the peak throughput of all the systems in an operation (i.e., how many orders can be processed/fulfilled compared to demand). Mechanical capacity measures what the peak throughput of your specific equipment and technology is; for example, sorters, conveyors, palletization equipment, etc.

By better understanding how these various capacities compare to demand, you can identify inefficiencies, pinpoint areas for improvement, and implement technologies, processes, workflows, and systems to help achieve your requirements.

Looking at today’s new reality as well as your projections for mid- and long-term requirements, it is vital to review and design systems, workflows, and procedures that are synchronous to your business requirements and provide the needed return on investment.

Ed Romaine is VP of Marketing and Business Development for Conveyco. He can be reached at eromaine@conveyco.com or 860.589.8215 x129.

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 39

SPONSORED CONTENT

WHAT YOU WOULD HAVE SEEN IN THE EXHIBIT HALL This year’s PARCEL Forum was all set with a full exhibit hall of the companies you needed to talk to about specific equipment, software, services, and supplies for improving your small-package supply chain and logistics.

As you by now, PARCEL Forum ’20 Nashville is officially cancelled due to COVID-19. However, that doesn’t mean you have to miss out on reaching out to the exhibitors!

The following pages will give you a glimpse into some the exhibitors and the solutions you would have seen and talked about at this year’s forum. Read through all these options and follow up by email or with a phone call to these solution providers to get all the specific information you need for your plans.

Looking ahead to next year, mark your calendar now for PARCEL Forum ’21, September 14-16, at the Gaylord National Resort & Convention Center just outside of Washington DC.

Had we been just able to pull off PARCEL Forum, on the heels of a return to face-to-face business after COVID-19, it would have been a glorious event.

We would have been happy to see you like never before. We have so many close relationships in the industry — clients, colleagues, partners — and we are always looking to expand our circle. We would have talked about our wins and losses during COVID-19, shared our care for one another, and really, really enjoyed each other’s company!

We would have talked about the surge of e-commerce packages and the impact of unprecedented volume of the integrated carriers, the regionals, Amazon, and the USPS, and how to approach the market right now, from a timing and pricing perspective, and how to set expectations and strategy.

The peak season surcharges announced by FedEx and UPS and

the qualifying tiers, FedEx’s peaking factors, who they effect, and the financial impact would have been a hot topic.

And the impact on the USPS from the elections, COVID-19 and the e-commerce surge would have been huge discussion point as well.

All kinds of analytics projects would have been discussed: reduced business, surging business, divested business. How we would provide analytics to quantify the impacts and determine a strategy.

And while we would have loved to have discussed it all in person, the great news is we are just a virtual click/visit away. Give us a call and we can discuss it all. www.alexandrettaconsulting.com info@alexandrettaconsulting.com 714.777.3377

40 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

Audintel is the leader in multi-mode Freight Invoice Audit, and has developed the next generation of analytics platforms to provide actionable intelligence and visibility of your transportation supply chain.

Audintel has disrupted this space with the most advanced Business Intelligence platform available today, maximizing client value, as well as holding carriers to the highest degree of accountability.

Audintel’s real-time analytics drive smarter business decisions while effectively supporting complex global networks across all modes of transportation, including: Small Parcel, LTL, FTL, Air/Ocean Freight and Courier.

The Audintel technology platform is state-of-the-art, highly robust and stable, delivering a “best-of-breed” solution for all transportation analytics challenges.  Audintel performs a comprehensive, multi-point weekly audit.  Audintel identifies all invalid and inaccurate charges invoiced, which we contest and file claims for.  Audintel has a call center which calls claims into the carriers, resulting in the greatest return per freight spend dollar possible.  Audintel provides data visibility to highly detailed and beneficial transportation KPIs, along with carrier performance monitoring.  Audintel provides a dynamic SaaS BI Portal, Management Reporting, Online Invoice Visibility and Data Warehousing, running on a secure SSL encrypted database.  Audintel also provides carrier contract analysis, optimization, negotiation consulting services. “aud” - “intel” – meaning that our value proposition provides the most thorough and comprehensive audit in the industry, as well as all the intelligence; analytics, KPIs and carrier performance monitoring possible. www.audintel.com info@audintel.com 408.675.2750 Ext. 106

CT Logistics is celebrating 97 years of supply chain management services in 2020. Since 1923, companies have leveraged CT for freight audit, payment, TMS solutions worldwide. CT customizes all solutions for our clients to support all modes, including parcel. CT's services will reduce your costs and save your company money.

CT audits every shipment to recover money from your total parcel, package, and freight expenditures.  All rates and cost items are calculated, including bundled pricing, hundred weight, and dimensional pricing.  All shipments are reviewed for address, account number, COD, dangerous or restricted goods, declared value, and oversize.  All shipments. including third-party, are reviewed for inside, residential, dimensional, Saturday pickup or

Engineering Innovation, Inc. (Eii) has expertise in workflow automation design to help you take the lead with solutions that work for any size fulfillment, returns, mailing, and shipping operation. Although we have missed the excitement of meeting everyone at the PARCEL Forum, we still look forward to the opportunity to share EII’s growing set of solutions for the parcel industry.

From our LightSortTM Sort-to-Light System that enables high-speed, high-accuracy parcel sorting with very little operator training to our ChameleonTM Automated Parcel Processing Solution for mid-to-high volume parcel processors, Engineering Innovation’s highly configurable parcel solutions are specifically designed to adapt to our customers’ environment to get compatible solutions in operation as quickly as possible.

delivery, as well as GSRs (Guaranteed Service Recoveries).

CT's services also include supply chain management, TMS solutions, LTL and Full Truckload shipment execution, bid management, shipment planning and execution software, as well as professional services for consulting and advising. CT's business intelligent platform provides global supply chain visibility for benchmarking and trending, with graphical dashboards for management information. CT is SOCII and ISO 9001:2015 certified. ctlogistics.com sales@ctlogistics.com 216.267.2000 ext 2190

Eii will put you on the right track to match consumer expectations of faster, more affordable shipping. Eii provides solutions that can scale as you do. Our future-proof modularity and configuration options allow for custom automation of your process, even as demands change. Our mission is to develop practical products that work in the real world to ensure our customers’ success, and we include service after the sale from the best “pit crew” in the industry. www.eii-online.com sales@eii-online.com 800.350.6450

Since 1986, LaserShip has continuously innovated to stay ahead of the evolving e-commerce marketplace to provide retailers with shorter transit times, more flexibility, and lower costs than competitors. Today LaserShip is the largest regional last-mile carrier, with over 50 distribution centers and 4 sort centers reaching over 100 million consumers. As a result, LaserShip is trusted by the largest retailers to provide sameday and next-day delivery services in the Eastern and Midwest US. This year, LaserShip will add inbound lanes and automation to its 300,000+ sq. ft. sort center in South Brunswick, NJ, including an automated smalls/poly bag sort system, increasing throughput by 20% up to an estimated 30,000 packages per hour. LaserShip also recently released its upgraded mobile application, ell™, to help LaserShip deliver faster than ever, and expanded its Visual Proof of Delivery (vPOD) to enable consumers to better track delivery of their packages. LaserShip’s investments in automation and technology highlight its ongoing commitment to better serve customers and respond to the increased demands of the e-commerce landscape during the COVID-19 pandemic.

Whether its delivering meal kits to allow families to stay home during the pandemic or delivering essential items, LaserShip’s goal is to be there when consumers need a trusted delivery provider.

In lieu of PARCEL Forum, contact us to learn about our e-commerce residential services. www.lasership.com solutions@lasership.com 703.761.9030

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 41

WHAT YOU WOULD HAVE SEEN AT

NPI @ PARCEL Forum 2020 Extraordinary circumstances require extraordinary measures. We understand and fully support this year’s PARCEL Forum cancellation. Safety first!

Our focus for this year’s PARCEL Forum was threefold: First – with continuous improvement being in NPI’s DNA, we wanted to highlight enhancements to our Gen 3 Parcels Sorter: now fully PLC-based and with an optional bin diverter for sacks (doubling sort capacity for each bin).

Second – remind all our customers of the different services we offer: ranging from 24/7 (phone) tech support, to parts contracts, to training, all the way to on-site personnel to maintain the equipment.

Third – announce to all our customers and visitors the imminent arrival of our single-shoe/ bi-directional Xstream.

We hope everybody is staying healthy and we look forward to seeing you all soon!

OnTrac provides an affordable logistics network that speeds up ground delivery so companies can delight shoppers with world-class service and save money on shipping. They connect hundreds of independent delivery businesses with thousands of drivers through proprietary technologies, centralized customer service, and hub-and-spoke sort and linehaul operations. The OnTrac service area can reach 65 million consumers and includes all of California and the major cities of the Western United States.

E-commerce companies choose OnTrac for their economy pricing, lower fees and surcharges, and faster residential Ground delivery service.

They offer the features and tracking tools you expect from big companies while still focusing on small-company customer service. OnTrac is a SmartWay Transport Partner, a USPS

Workshare Partner, is SOC 2-certified, and integrates with over 30 leading multi-carrier software providers.

Adding the OnTrac logistics network to your cross-channel strategy gives your business a chance to reach more customers with next-day delivery. That means faster service, happy customers, and repeat orders. Plus, OnTrac has fewer fees and lower surcharges than the national companies, which means more profit to your bottom line.

For more information, please visit ontrac.com.

Sincerely, National Presort, LP (“NPI”) www.npisorters.com sales@npisorters.com 888.821.7678 (SORT)

ontrac.com salesweb@ontrac.com 800.334.5000

42 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

Parcel Insights from Pierbridge PARCEL Forum attendees are facing rising shipping costs, increasing supply chain complexity, and higher customer expectations. At our booth this year, you would have learned how to reduce shipping costs, boost delivery performance, and enhance customer experience by powering your entire parcel chain with Pierbridge's enterprise multi-carrier parcel management solution, Transtream.

Go Enterprise to Gain Control of All Your Shipping Customers are demanding more delivery choices than ever. Transtream enables you to cost-effectively control hundreds of parcel, freight, and local delivery rates and services from a single multi-carrier management platform.

Go Omnichannel to Ship from Anywhere to Anywhere E-commerce marketplaces perfected the idea of the “endless aisle”: the ability to sell and ship goods from sources of supplier inventory in closest proximity to the consumer, reducing shipping costs while speeding delivery. Transtream omnichannel shipping solutions enable retailers to ship anywhere, from any inventory location, while reducing the cost of free shipping and realizing faster delivery.

Go Global to Streamline your Cross-border Parcel Chain E-commerce has driven global parcel shipment volumes sky-high. Consumers are more comfortable than ever buying from overseas, boosting the number of packages being shipped cross-border. Extending its suite of enterprise and omnichannel solutions, Transtream offers a wide range of international shipping capabilities, including international outbound customs compliance, consolidated cross-border drop shipping, and support for carriers outside of North America. www.pierbridge.com sales@pierbridge.com 508.630.1220

WHAT YOU WOULD HAVE SEEN AT

QAD Precision (formerly Precision Software) has undergone some significant changes since PARCEL Forum in 2019. Our new release, QAD Precision 18.1, offers major new functionality, including our Import Management and Free Trade Agreement solutions.

QAD Precision Import Management offers specialized tools and controls to assist trade professionals to execute import activities and ensure compliance with complex trade regulations when clearing a foreign-sourced shipment through Customs. Trade personnel gain proactive visibility to critical data and documentation requirements before the shipment’s arrival. This prevents damaging delays, costs, and regulatory exposure.

QAD Precision Free Trade Agreement (FTA) allows enterprises to determine origin under any Free Trade Agreements recognized by the World Trade Organization. FTA origin determination is done in real-time and the

Rules of Origin always use the latest master data to ensure the most up-todate costs and material quantities are included in the analysis.

As well as these exciting new solutions, QAD Precision’s Freight Bill Audit & Pay and Delivery Exception Management solutions are now available as microservices architecture.

Furthermore, QAD Precision continues to grow our multi carrier parcel network. We have added and enhanced integrated carriers across North American, Europe, and Asia Pacific. With this new release, QAD Precision offers a truly end-to-end solution to help enterprises simplify complex supply chain operations.

In a scattered world, TForce Logistics connects you with the customer. We understand the complexity of juggling multiple supply chain partners, which is why we focus on customization instead of standardization. With reach in North America, our distribution network supports your e-commerce, medical, financial, and B2B shipping needs with low-cost solutions by relying on our experienced volume-dense model.

We create a customer experience that cares about each same-day and next-day delivery, because you trust us to deliver on the promises made to your customer. At a time when capacity is changing the market, we offer the stability in the form of network and balance. Our time-tested model

is backed by the strength and experience of TFI International so we can go where other providers stop.

From coast to coast, TForce Logistics offers our customers a truly integrated shipping experience with the highest level of professional customer support. Every mile counts, but the final mile matters most.

www.precisionsoftware.com/ info@precisionsoftware.com 312.239.1630

Tforcelogistics.com opportunities@tforce.com 855.396.2639

Meet Retail Consumers Demand for Delivery Choice The consumer is reconstructing the supply chain and expectations have changed. Customers want to choose how, where, and when they receive orders. They place orders throughout the day and want to know these orders will arrive when promised, at the chosen location. They want choices, too, such as the ability to pick up a package at a lockbox or a storefront curbside or have it delivered to their home instead of office.

Amazon put itself ahead of the curve by recognizing and responding to pivots that put more power in the hands of consumers. It is time for other supply chains to catch up.

Transportation Insight’s multimodal experts help retailers meet new consumer demands and differentiate themselves through delivery choice. We engineer flexible supply chains capable of quickly shifting to maximize customer satisfaction.

Our clients leverage omni-channel fulfillment processes that offer shorter delivery windows, location choice, progress updates, and feasible deliveries at an optimal cost.  Drop ship e-commerce orders direct to customers.  Optimize delivery network alignment through parcel, LTL, and TL  Audit order and product profitability  Uncover process gaps and manage risks with a holistic supply chain view Transportation Insight helps you master your supply chain by determining the delivery choices that are best for your business and optimizing a transportation plan that protects profit and customer experience. www.transportationinsight.com info@t-insight.com 877.226.9950

SEPTEMBER-OCTOBER 2020  PARCELindustry.com 43

WHAT YOU WOULD HAVE SEEN AT

United Delivery Service, a regional parcel carrier with over 45 years of delivery experience, has been a leader in providing final-mile delivery solutions for some of the largest pharmaceutical, payroll, retail, and e-commerce companies throughout the Midwest.

UDS offers a same-day, next-day, and routed distribution service that has provided its customers incredible cost savings, improved transit times, and a better customer experience by utilizing our innovative technology and software. UDS provides VPOD (Visual Proof of Delivery) on every

shipment. This technology, along with providing GPS/geocode on each order, allows us to be more successful when making a delivery to your customer’s home or business. For more information about our services and coverage area, feel free to visit us at www.uniteddeliveryservice.com sales@uniteddeliveryservice.com 630.930.5201

Featured PARCEL Forum Exhibitors Alexandretta www.alexandrettaconsulting.com info@alexandrettaconsulting.com 714.777.3377 Audintel www.audintel.com info@audintel.com 408.675.2750 Ext. 106 CT Logistics ctlogistics.com sales@ctlogistics.com 216.267.2000 ext 2190 Engineering Innovation www.eii-online.com sales@eii-online.com 800.350.6450 LaserShip www.lasership.com solutions@lasership.com 703.761.9030 NPI www.npisorters.com sales@npisorters.com 888.821.7678 (SORT)

The increasingly complex nature of small parcel shipments makes it difficult to get a timely, accurate picture of true cost and service fulfillment.

High volumes, multiple surcharges, contracted delivery guarantees, limited access to information — it all adds up to a complicated invoice process prone to inaccuracies and unnecessary costs. U.S. Bank Freight Payment can help you address these challenges with robust solutions that integrate small parcel and freight data for an accurate view of true transportation spend. Transaction-level detail on more than 200 audit points provides visibility into performance and automated cost recovery eliminates laborious efforts to contest charges, file claims and obtain refunds. Our small parcel experts work with you to

provide customized recommendations that can help proactively identify areas to reduce expenses. Plus, you can depend on the reliability and security of a bank that’s gone beyond regulatory, audit, and compliance requirements to earn the highest data certification to keep your competitive information safe. Visit freight.usbank. com/smallparcel to learn how you can get the reliability and visibility you need to make your supply chain a strategic advantage from the first mile through the last mile. freight.usbank.com/smallparcel CPSTransportation@usbank.com 866.274.5898

OnTrac ontrac.com salesweb@ontrac.com 800.334.5000 Pierbridge www.pierbridge.com sales@pierbridge.com 508.630.1220 QAD Precision www.precisionsoftware.com/ info@precisionsoftware.com 312.239.1630 TForce Logistics Tforcelogistics.com opportunities@tforce.com 855.396.2639 Transportation Insight www.transportationinsight.com info@t-insight.com 877.226.9950 United Delivery Service www.uniteddeliveryservice.com sales@uniteddeliveryservice.com 630.930.5201 U.S. Bank freight.usbank.com/smallparcel CPSTransportation@usbank.com 866.274.5898

44 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

APPLICATION ARTICLE

Are You Sitting on a Mountain of Savings?

By Chris Giles

Mail and shipping may not seem like the most obvious place to find savings. But more efficient methods of sending packages and mail, and greater transparency and scrutiny over shipping and mailing expenses, can save tens to hundreds of thousands of dollars for enterprises.

There are many areas where mailing and shipping may unnecessarily drive up costs:  Selecting particular carriers or services (e.g. USPS First-Class Mail® vs. Priority Mail®).  Time spent on handling inbound receivables.  Lack of uniform standards for shipping and mailing processes within the same organization.  Lack of package carrier diversification.

Things get even more complicated for enterprises managing a fleet of postage meters and shipping software solutions. Consider a bank with thousands of branches. That many locations mean thousands of postage meters and virtual meters — plus other shipping and mailing devices, like intelligent lockers or inbound receiving solutions. With that many devices to keep track of, it’s simply not feasible for enterprise to have a clear, consolidated overview of their shipping and mailing expenditures. The costs are spread out among too many locations and devices for any enterprise of that size to review them efficiently.

Discovering savings with analytics Reaping savings on shipping and mailing starts with solutions that provide a bird’s eye view of total spend across all devices and meters. It’s not just about oversight of outbound shipping costs, either; this transparency also has to take into account the time and associated costs spent on tracking and processing inbound packages and mail.

Analytics tools that provide high-level, detailed views of an enterprise’s shipping and mailing device fleet make it possible to be more time- and cost-efficient. Data on shipping volumes and carrier rates empowers businesses to have more informed conversations to negotiate with carriers for rate and volume discounts.

These solutions also empower enterprises to weed out savings far faster than employees manually searching every individual device, postage meter and cloud software for new cost opportunities. When you consider how much time that would take, the hours racked up could effectively cancel out other savings you may find. An automated analytics solution eliminates this tedious, time-consuming manual work, speeds up the whole process, and yields new time and labor savings.

Weeding out costly shipping and mailing inefficiencies and generating new savings presents an opportunity to reinvest money back into the company and your employees, with new intuitive technologies, worker benefits or continuous education programs. It also frees up employees to take on new work: if workers can trim hours off mail deliveries, that means more time to tackle new opportunities.

You could be sitting on a mountain of potential savings in your shipping, mailing and receiving services — but without the proper analytical tools, you’d never know it. At a time when everyone is working remotely and every employee is a potential business shipper, being able to exercise greater scrutiny and transparency over the costs and time going into your shipping and mailing functions is essential.

Chris Giles, Vice President Strategic Product Sales at Pitney Bowes, has been helping clients for over 25 years maximize savings and efficiencies.

To learn how SendPro® Analytics can identify savings for your company get in touch at 877.727.3887 or visit: pitneybowes.com/us/analytics

WRAPUP

TOGETHER, WE CAN DELIVER Michael J. Ryan

T

he world has been flipped upside down, with the COVID-19 pandemic impacting all parts of the world as well as each of us individually. There are many people suffering and unsure of their future. It is up to each of us to help each other through this crisis. The parcel industry has done well through the pandemic as people have ordered more items online in an effort to avoid in-store shopping. However, global trade has gone through a major disruption, and it could

46 PARCELindustry.com  SEPTEMBER-OCTOBER 2020

take up to 12 months to get re-aligned. In addition to the pandemic, there has been civil unrest and a major economic downturn.

As I have reflected on these changes, there is one theme that keeps coming back to me. We are Americans and we (as one team) will get through this.

Global trade has gone through a major disruption, and it could take up to 12 months to get re-aligned.

I had the pleasure of having my son return from a 13-month deployment in Afghanistan in June (Captain in the Marines). In a joking manner he said, “I have only been gone for one year and the US is different, but we are still the greatest country in the world.” As I have reflected on his return, I keep thinking of the song “God Bless the USA” by Lee Greenwood. He talks about the “pride in every American heart.” You probably are all familiar with one of the main parts of the song: “I’m proud to be an American, where at least I know I’m free. And I won’t

forget the men who died and gave that right to me. And I’d gladly stand up next to you and defend her still today, ‘cause there ain’t no doubt I love this land…God Bless the USA!” I have been in the supply chain business for over 30 years, and our industry has always risen to a challenge. This pandemic, while unprecedented, is no different. I’d like to thank the many people on the front lines that have kept America running through COVID-19.

From grocery store employees to healthcare workers to educators who have quickly adapted their teaching styles to accommodate virtual learning, it’s heartening to see how each industry is tackling this enormous obstacle. And the supply chain industry is no different; I firmly believe it is this pride, commitment, and dedication that will help us get through this trying time. I am proud to be an American, and I know that together, as Americans, we can deliver!

Michael J. Ryan is the Executive Vice President at Preferred Parcel Solutions and has over 25 years of experience in the parcel industry. He can be reached at 708.224.1498 or michael.ryan@preferredship.com.

A closer look at 40 companies with the equipment, software, services, and/or supplies to help you ship more packages, more frequently, and more efficiently

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OF YOUR SUPPLY CHAIN Your Customers.

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