A common challenge in managing parcel operations and spend is retaining and analyzing the detailed parcel data available from FedEx, UPS, the USPS or any of a host of regional carriers. The old management adage of “You can’t manage what you don’t measure” is certainly true in this case, and the shippers with the best negotiated agreements, best operations, and the best customer service will embrace parcel data management and analysis.
The Basics: There are many types of data to collect, but the most basic are 1) Invoice and 2) On-Time Service. The data format and availability is carrier dependent, but is often available as a comma delimited file sent to you via an email link or downloadable from the carrier’s website. Larger more advanced shippers may have data sent to them via EDI and uploaded into a number of reporting databases. If you have multiple carriers, you will be able to compare spend and performance and give business to the carrier that is best in either.
Invoice: Billing data from any carrier should support the weekly invoice that you receive. When imported into Excel, Access, or other analytical tools, the net spend represented in the data should sum up to the amount invoiced. One quick beginning report would be your spend and number of packages of each service category that you use. Even this most basic report provides valuable insight. As an example, is one of your top spend items a premium next day service (examples: Next Day Air, Priority Overnight)? If so, do these packages truly need to travel this quickly? This could be a quick operational change that results in cost savings.
Service: Your carrier will typically review On-Time service during business reviews or monthly meetings. These service numbers will likely be adjusted for weather, operational causes, or other carrier-decided factors. Getting the detail for your On-Time service is important in understanding where these failures are occurring, and the unadjusted percent of packages delivered to your customers and facilities. A simple report of failures by origin or destination can give you areas to focus on with your carrier. Sometimes, there is a simple misunderstanding of your pick-up operations at the local level, and this can be quickly resolved.
Carrier Negotiations: Knowing what you’re spending, your most used services, and what your parcel distribution looks like help to prioritize what you ask for in your negotiations. After all, a 1-2% savings in your most used service could have a far bigger impact than a 25-50% savings in seldom used services. This also applies to the surcharges and fees that are the heaviest hitting to your program. Use your data to sort out what is important to you.
Retention: Storage space is cheap in today’s market. Although storing all your data in a database may prove to be expensive, the native flat files for your program can be compressed and are worth far more to your improvement efforts than they will ever cost you to store. Keep as much data as possible! Often pricing agreements with the national carriers are 3-year agreements. Retaining your data means that you can analyze your change in spend compared to the General Rate Increases for each year. You can also check to see if rate caps have been consistently applied. Overall, the most powerful reporting that you can generate is based on trends. What is your spend doing over the course of the year? Have you seen a recent spike in on-time service failures?
Training: Regardless of your title within your organization, if you are managing a parcel program, learn how to analyze data. UPS and FedEx have a wealth of information on their websites. Data dictionaries may be available…keep asking questions from your rep, help line, or other industry experts. The best teacher, however, is blocking off some time and looking at data. Get familiar with the fields, what they contain. What is the highest value in the field, what is the lowest? Compare what you analyze to your invoice. Do your summary queries add up to the same amount as the check that your Accounts Payable department sent to the carrier last week? If you manage a team of analysts, see that they are becoming adept at parcel data analysis. Give them every opportunity to learn more and make real, actionable reports from your data.
Conclusion: Data management analysis is now, and will continue to be crucial to managing parcel operations and spend. Learning the basics and seeking help to understand what you are spending becomes increasingly important. Carrier agreements continue to become more complex, adding additional surcharges, complex calculations and business rules. The more you personally understand, the better decisions you can make for your program and company.
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