Carrier Rate Shopping Explained: How Building Backwards Helps Your Shipping Move Forward

Posted on Feb 5, 2019 By kbormann Share:

 

In a time where shipping convenience expectations are high, Advanced Date Shopping can reduce errors and raise customer service success

Modern generations have pushed for retail innovation that supports their need for ultimate convenience; fast shipping, and the ability to shop anytime, anywhere, anyhow. Supply chain is the last fortress to be conquered to complete the experience for new consumers, and shipping, fulfillment and delivery are areas requiring modernization in this evolving economy. According to the KPMG Retail Trends 2018 report, global e-commerce is expected to reach $4.13 trillion dollars by 2020, and customer experience will overtake price and product as key brand distinction.Why ProShip?

Fulfilling promises like delivery times will be key to executing a positive and memorable customer experience and keep them coming back as repeat, loyal buyers. Sometimes it’s difficult to predict external factors that can prohibit deliveries from making it to their destinations on time, but more often than not, these factors simply are not accounted for. Implementing rate shopping into your shipping process saves both time and money for the customer, and the shipper. Utilizing multiple carriers is also smart so you can choose the smartest way to ship. We have found that sometimes it’s best to work backwards from your promise and choose a carrier that fits to build in costs, business time in transit, label creation time and trailer pull time, as well as carrier contracted dates to assist you in being able to consistently deliver on your promises.

Three Rate Shopping Options

Rate Shopping Flow Chart

Basic Rate Shopping

Basic rate shopping is the first, and simplest form. This is a behind-the-scenes service that will automatically provide you with your best shipping options while considering total cost and applicable service selection.

  • Total Cost: The amount that we expect the account holder to pay – this includes item and shipping charges.
  • Applicable Service Selection: Considers several different secondary factors:
    • Rate Shop Groups (previously known as best way groups): A set of carrier services that you want to evaluate.
    • Cost Normalization: You need your shipping system to normalize cost across all carriers, modes and services. It is important not to think about the base rate separate from the assessorial, fuel surcharges and discounted self. In the end, all this rolls up into total cost (the cost the shipper will pay).
    • Service Validation by Destination: There are certain services that do not deliver to all addresses. For example, UPS will never ship to a PO Box, and Next Day Early AM (utilized by UPS and FedEx) will not deliver to all addresses.
    • Service Validation by Package Attributes: Some services are residential-only, such as FedEx Home Delivery. The system needs to weed that service out before presenting you with options. Sometimes depending on the package weight, it may or may not qualify for particular services; for example, a 4.5 oz letter wouldn’t be a good fit for LTL.

With basic rate shopping, a simple sort by total cost should finish the business rule. Too many systems will look at only part of this equation and not the total – they may not have the ability to take the same transaction and hand it to an LTL service that you would then hand to a small parcel service. There needs to be a lot of translation at the get-go. Doesn’t matter if it’s UPS, Deliv, FedEx – our systems come back with a normalized set of information.

Time in Transit Rate Shopping

Time in transit rate shopping takes the sorted rate shopping list and filters by business days that the package would be in transit. When using this type of rate shopping, all the previously listed filters (total cost and applicable service selection) are accounted for, but a third is added:

  • Time in Transit: How many business days it will take a carrier to transit the package from the shipper to the consignee

Advanced Date Shopping

Advanced Date Shopping

The king of rate shopping - Advanced Date Shopping - includes planning for delivery by a target date. This algorithm includes 9 data sets to maximize the ability for your shipment to be delivered on the promised date.

  • Normalization: As mentioned in basic rate shopping above, cost normalization, service validation by destination and parcel attributes, plus best way groups are all accounted for in this step.
  • Basic Rate Shopping: This is where the program sorts by cost.
  • Time in Transit Rate Shopping: The time it actually takes for the carrier to move a shipment from point A to point B.
  • Customer Day/Hour of Choice: What expectation have you sold the customer? Do they expect it on Friday, or today by 5:00pm?
  • Label Creation Time: When are we physically creating the label, and when is it actually being stamped and put on the trailer?
  • Trailer Pull Times: This factors in when the trailer physically leaves the hub. For example, if you are shipping something at noon, all the trucks/carriers are still available. If you put a label on a box at 4:15pm, the USPS trailer may have already taken off for the day.
  • Contracted Pick Up, Transit, and Delivery Days: Each business will have a contract with carriers for which days they will pick up, drop off, and deliver packages for them.

Importantly, with criterion including customer day/hour of choice, label creation time, trailer pull time and carrier contracted days, you can prevent external factors from getting in the way of you fulfilling your shipment promises. This results in money saved through close deliveries by using lower-cost carrier services or couriers with the peace of mind that the system will use express services in the event of a longer fulfillment time or longer distance. This then allows you to fulfill your customers’ expectations automatically.

 

What’s Right for Your Business?

What Rate Shopping business rule should you use? Start with examining what you promised your customer. Do they have an expectation of a day, or a by a specific hour? In order to get the package to the customer by your promised time factors, such as contracted pickup, transit and delivery dates need to be considered. Dependent on the label creation time and the pull time, the software will run in the background to do the math and determine which carrier service will help you to deliver on your promise. It takes into account holidays, weekends and non-contracted dates all in the same algorithm.

Modern consumers are completely changing the way shopping and shipping is executed and what expectations and standards they are held to. Today’s shoppers are demanding fulfilled shipping promises, complete tracking capabilities and continuous positive customer service. Advanced Date Shopping, a tool only available through ProShip, is a great way to be sure that both the customer and the shipper have a positive and memorable shipping experience.

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