7 Common Mistakes in Parcel Carrier Selections with Timur Eligulashvili

Mistakes happen. They are a part of life, learning, and growing. But costly mistakes can make or break success and maybe even your job. We sat down for a conversation with Timur Eligulashvili, Founder and President of Logistics Remix, to chat about 7 common (avoidable) mistakes during the parcel carrier selection process.

CONNECT WITH TIMUR:

Data is key. Quality data is critical to ensure you are making the right decisions for your shipping operation. Some say, easier said than done. We say, when done the right way, your job will be made easier. Having multiple systems across your logistics tech stack and a variety of processes in place can create a data nightmare, but by aggregating disparate data and systems, and normalizing that data to create a single source of truth, you can get a complete picture of parcel cost and performance. 

“Neglecting data-driven insights when selecting a small parcel carrier can result in poor decision-making,” stated Timur. “Not relying on data can result in choosing carriers that don’t align with customer expectations, a higher shipping cost, missed deliveries, and reduced customer satisfaction.”

Using FedEx and UPS for shipments isn’t necessarily a bad choice, but it isn’t your only choice. Often, regional carriers are overlooked for a variety of reasons during the parcel carrier selection process. However, the truth is that regional parcel carriers can be more efficient and cost-effective when used correctly in your strategy. 

“Relying only on a limited group of familiar carriers can result in what Warren Buffet refers to as ‘mistakes of omission.’ By not exploring and considering other options in the market, shippers may miss out on opportunities for improved service, lower rates, and more efficient delivery options,” said Timur. 

Carrier diversification allows you to be agile in the face of supply chain disruptions, decrease delivery times, scale quickly and efficiently, and produce cost savings.

“Overlooking regional carriers due to unfamiliarity is a common mistake shippers make at first. The initial concerns are with reliability and driver or vehicle image of the regional carriers compared to the large national carriers,” Timur continues. “This, however, prevents shippers from adding capacity and benefiting from lower rates through regional’s lower cost operating model.”

Before adding new carriers into your mix or shifting parcel volume to a new carrier, it’s vital to understand how this change will impact your processes, performance, and, ultimately, your customer experience.  

“Failing to test a carrier’s services prior to ramping up volume can lead to unforeseen issues and poor customer experiences,” he continues. “Things like inconsistent on-time performance, unexpected charges, issues with system’s integration that don’t provide the latest status of the shipment can all magnify if they’re not caught early on in the onboarding process.”

Often, the lowest cost carrier option can have longer transit times and lack the level of service you seek. It’s important that shippers fully understand the service level of each carrier for each product to ensure expectations are met for both shippers and end consumers.

Timur stated it well when he said, “A negative customer experience in the shipping process has a lot of weight on damaging a retailer’s brand reputation. Opting for the cheapest carrier without considering other factors can lead to sacrificing service quality, reliability, and customer satisfaction as a result of delayed deliveries or lost packages.” 

In a recent survey of shoppers, more than 80% Millennials and Zoomers will abandon brands after a poor delivery experience. Today’s shopper wants delivery choice options and clear communication throughout the order process from purchase to delivery.

The customer experience begins before the shopping and continues until delivery and beyond. Delivery experience management has become essential to overall customer satisfaction as shoppers demand more visibility and consistent communication across the journey of their packages.

“A carrier’s ability to provide a smooth and efficient delivery experience for customers is crucial. Inadequate tracking, poor communication, and slow deliveries can negatively impact customer satisfaction,” Timur added. “This is especially true for deliveries requiring someone to be home for a signature or perishable items that need to be received and refrigerated within a specified time.”

Mid-August to mid-December is when demand surges and supply lowers, and securing capacity with carriers gets harder. The planning and preparation for peak volume starts months in advance. Securing capacity during this time can often be stressful and expensive when unprepared. 

“Selecting a carrier that can’t flex with your business may result in difficulties securing capacity during times when demand increases during peak seasons. Not having enough carrier capacity secured to get orders out the door in a timely manner will lead to delays and reduced customer satisfaction,” Timur stated.

Measuring and monitoring carrier performance is a critical piece of any carrier strategy. A variety of KPIs can be valuable in determining success of your parcel carrier selections. Metrics could include: 

“Failing to assess your carrier’s performance periodically can lead to ongoing service issues,” Timur shared. 

Regularly reviewing a variety of KPIs can help you better understand carrier performance, areas of improvement, and opportunities.

We asked Timur how shippers can avoid these common parcel carrier selection mistakes, and here is what he had to say:

Parcel shipping mistakes happen, but with the right people, processes, and systems, these mistakes can be minimized or eliminated. Start by partnering with trusted technology and teams.