Many companies are seeing an increase in shipping volumes and looking to scale their operations, a new report says. However, they continue to face pressure to control costs and invest cautiously.

As the economy recovers and parcel and freight volumes increase, companies will have an opportunity to make strategic choices about how to move forward. According to a new study by Kewill Logistics, organizations that were holding steady or contracting last year may now be in a position to consider growing their operations and investing in the future.

For its 2011 Best Practices Survey for Parcel Shipping and LTL/Freight Management, the trade and logistics solutions provider surveyed more than 820 of its customers. Respondents came from a number of professional disciplines, including logistics, supply chain planning and execution, IT and trade compliance. The manufacturing, distribution and service industries were all represented.

When comparing this year’s results with last year’s, Kewill Logistics uncovered modest signs of economic improvement and increased optimism over 2010.

For instance, in last year’s survey almost half the respondents were reducing staffing levels. This year, a noticeable number are either holding steady (31 percent) or adding headcount (29 percent). Moreover, 19 percent of respondents this year report opening new locations and nearly a quarter (24 percent) are considering purchasing or upgrading supply chain software.

In light of these developments, the report offers the following recommendations for shipping best practices:

1. Shippers should take steps to automate basic shipping processing as a means of leveraging existing shipping resources as volumes increase.
2. Shippers that still use manual intervention should assess the trade-off between investing in additional headcount versus automated systems as economic conditions improve.
3. The 44 percent of companies that have data in an automated system that is inaccessible to shipping should immediately calculate the return on investment (ROI) for enabling such access. The ROI for this could potentially be six months or less.
4. Shippers that currently use only one or two carriers should explore the potential savings available through more choices.
5. All shippers should consider the use of optimization software to make intelligent carrier choices for each shipment, considering cost, delivery time and daily shipment volume and mix to yield the lowest overall cost.
6. Shippers with high volumes and/or long shipping distances should explore the use of zone-skipping strategies.
7. With today’s technology, it is becoming increasingly affordable to configure algorithms to determine when it is beneficial to employ zone skipping as a means of reducing shipping costs.
8. Shippers should take steps to automate less-than-truckload (LTL) shipment processing in conjunction with automated carrier selection/optimization.
9. Shippers should consider the benefits to the organization of a best practices and automation strategy that encompasses parcel and LTL/freight shipments.
10. Companies relying on homegrown shipping automation systems should benchmark them against commercially available software to validate their effectiveness, considering both initial investments and ongoing total cost of ownership.

“We recommend that supply chain organizations experiencing increased volumes take the time to carefully consider all of their options…including increased staffing, process improvements and automation,” the report states. “Companies that use this juncture to plan and act strategically may find they can emerge even stronger than they were before the economic slowdown.”

Earlier: Recession Spurs Lower-Cost Shipping Options

Resources

2011 Best Practices Survey for Parcel Shipping and LTL/Freight Management (free registration required)
Kewill Logistics, Sept. 14, 2011

Kewill Releases Study on Parcel and LTL/Freight Best Practices
Kewill Logistics, Sept. 14, 2011

Study Shows Potential Improvement for Parcel Shippers
Material Handling & Logistics, Sept. 16, 2011