February 2022 Coaches Corner: eCommerce and the Growing Complexity of Carrier Selection
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There are two competing forces when we look at rate simplification for e-commerce. The first is rate retrieval itself. Depending on your e-commerce process and the technology deployed, some parcel carriers may not be a fit for your operation due to technology adaptation within the carrier rating. Parcel rating capability is defined by speed, simplicity and automation. As a result, the carrier “fit” may come down to identifying the carrier most able to rate within your process. On the other side of the equation, visibility is paramount to a successful e-commerce solution. Smaller regional parcel carriers that may offer a lower rate but not meet your in-transit visibility requirements are not included in your parcel solution. As a result, potential freight savings in the ultra-competitive e-commerce channel are lost.
What solves the challenge? A robust rating engine that provides more than the standard API to include rate table contracts and base EDI connections. Though not a fit for every e-commerce solution, regional parcel carriers are growing and can become a viable option for zone-skipping optimization and final-mile deliveries. The more complex challenge within any optimization is shipment rating. Complex routing algorithms that account for multi-leg and multi-modal ratings become the norm when optimizing e-commerce challenges. The shippers that do this today, and those that will make it part of their supply chain processes, will continue to lead the transformation as e-commerce gains more traction.
The traction in e-commerce is headed straight to LTL, as non-standard parcel shipments move toward lower-cost LTL routings. The ability to connect to parcel and LTL carriers alike with a rating engine that illustrates optimized routing options will be the norm. In the end, we may see more of the complete TMS experience achieved…which is a complete lack of user experience in the rating and routing processes through workflow automation.
Work With the Experts
For more information on TMS automation and securing the best e-commerce solution for your business please reach out to our Supply
Chain Coach team.
FOR MORE INFORMATION, PLEASE REACH OUT TO INFO@ROCKFARM.COM.
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By Brad Stewart
Co-Founder, CCO
Brad’s journey into logistics began as a Marine Officer and transitioned from the LTL docks to the non-asset side within the logistics service provider arena. As a co-founder of Rockfarm, Brad drives our business development efforts and delivery of our promise. An Arizona native, Brad enjoys spending time outdoors in his home state with his wife and family.
“Our approach to the market allowed us an opportunity to push forward in 2008 and enable our mission, “lower the cost to serve” to stand as a cornerstone to our company today.”
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References
Wolf, C. (2022 February) Maersk to Buy Pilot Freight Services
https://www.ttnews.com/articles/maersk-buy-pilot-freight-services
Tobben, Sheela. (2022 February). US Sees Record Oil Production Next Year Moving Even Higher
https://www.ttnews.com/articles/us-sees-record-oil-production-next-year-moving-even-higher
The Maritime Executive. (2022 February). Maersk Reports Record-Setting $24 Billion Profit for 2021
https://www.maritime-executive.com/article/maersk-reports-record-24b-profit-while-expecting- markets-to-normalize
Hellenic Shipping News. (2022 February). Oil steadies near seven-year high on Ukraine-Russia tensions
https://www.hellenicshippingnews.com/oil-steadies-near-seven-year-high-on-ukraine-russia- tensions/
Hellenic Shipping News. (2022 February). IEA warns of ‘small cushion’ in oil markets, expects supply
shortfall to deepen
https://www.hellenicshippingnews.com/iea-warns-of-small-cushion-in-oil-markets-expects-supply-
shortfall-to-deepen/
Supply Chain Digest. (2022 February). Supply Chain Graphic of the Week: The top 100 US Truck
Bottlenecks in 2022
https://www.scdigest.com/ontarget/22-02-10_Top_100_US_Trucking_Bottlenecks_2022.php? cid=19565
Ronan, D. (2022 January). Yellow Reports Mixed Q4 2021 Results
https://www.ttnews.com/articles/yellow-reports-mixed-q4-2021-results
