Parcel Analysis: Hidden Data and its Benefits
As businesses begin to grow and scale, collecting and analyzing every piece of data becomes more and more critical.
While the collection of ‘big data’ is nothing new, believe it or not, most logistics managers are not utilizing it to its fullest potential… if at all.
Most of them are actually aware of the need to tap into their data and mine it for important information. Acquiring this data could drastically decrease their shipping times, reduce shipping costs, and help mitigate existing pain points in their supply chain.
By analyzing your parcel data right down to your invoices, you can quickly gain an upper hand in the shipping world.
To get you started, we have compiled a list of the top three ways to use your parcel data to save you time and money!
Monitor Ordering Data and Service Usage, Then Adjust Accordingly
Service usage is one of the most important factors to consider and one of the key pieces of data that you have at your disposal right now. This is one of the pieces of the shipping puzzle that demands a sharp eye for detail.
Information regarding parcel data can be pulled from your system and then used for determining when it may be time to shift from one shipping service to something more in line with what your customers purchasing decisions reveal about them. Analyzing this data also allows you to determine what is more important to your customer by simply paying attention to what transit times or other delivery options they select when placing an order with you.
Do they prefer faster shipping times at a higher cost or do they prefer to pay less up front and wait a few extra days for delivery?
Identifying the ordering and usage habits of your customers will allow you to give them a better experience. Additionally, it may also reveal hidden ways you could have been saving money this entire time.
Analyze Orders by Zone
Distance is one of the things that have a direct impact on every order that comes through your system. Shipment costs go up or down depending on the distance that your freight travels. Carriers measure this distance in what is called ‘Zones’.
These Zones range from Zone 1 to Zone 8. The smaller the number, the shorter the distance between the origin and the destination. So, while Zone 1 might indicate a delivery within a 100-mile radius of the origin of the package, Zone 8 might be greater than 1,800 miles.
What this means is that the further your customer’s packages travel, the more the shipping costs increase.
By analyzing customer orders for Zone data, you get a good idea of when it might be a good time to open up a new warehouse in another zone. Or it could alert you that you may need to outsource some of your inventory to a fulfillment center closer to the zones with the most activity.
Doing this will allow you to cut shipping costs down a bit for your customers. Furthermore, it is a stellar way to while potentially provide them with much faster delivery speeds.
Identify and Mitigate Pricing Pain Points
Analyzing parcel data on a weekly basis can help you to identify pain points in your current shipping operations. Unfortunately, this is not a one-size-fits-all sort of processes. Due to the complex nature of logistics, there is no single handbook to help you remedy these pain points.
If you pay close attention to all of your invoice data, you will start to uncover several financial pain points. Dig a little deeper and you may find a remedy by negotiating new price models with your carrier(s).
Has there been a new minimum ground service charge initiated? Are there hidden discounts that you can take advantage of to improve the listed rates for your carrier? Do you have wiggle room to negotiate a better minimum charge? Could the costs be split among a different category of goods where the new costs can be better justified?
Not recognizing these gaps failing to utilize your negotiation powers can easily cost you thousands of dollars a week in revenue. Maybe more than that if you are running a large operation!
By monitoring changes in minimum shipping charges and actively seeking discounts, you can save a ton of money.
In a nutshell, by analyzing parcel data, you can identify a few key areas that may need to be modified. And this data isn’t just beneficial to your bottom line, either. It extends much further and as it builds more value into your supply chain. Analyze that data, then sit back as you position yourself as an authority in your industry.
Your customers will thank you for taking the time to truly understand the ins-and-outs of the entire shipping process. It shows that you are actively looking for ways to grow and get better at what you do.
This article should give you a few of the basic stepping stones to get you started. But keep in mind that that is all it is; a stepping stone. There is a lot more that can be said about the impact parcel analysis can have on your business. And even more things that you can implement to build a better data analysis system. Due to the complex nature of every shipping service, outlining all of those points would be nearly impossible.
Having said that, if you are still in the dark and don’t know how to get started, reach out to us and let us show you how our years of expertise and trained staff can help you put together parcel analysis plan that will give you the most benefit for your time!