How do I choose the best shipping carrier? How do I ensure my carrier has the best services for my company?
Choosing a shipping carrier is difficult because there is not a one-size-fits-all solution. There are so many factors that your decision will depend on the unique needs of your overall business, your customers, and the type of support you need for your specific products.
There are so many shipping carriers to choose from, here is a breakdown of how to evaluate a shipping carrier to ensure that you choose the best shipping service for your brand.
If you’re worried about transportation fees going up, read how to get the most out of your shipping carrier’s service.
Check Their On-time Delivery Performance
Not to be confused with delivery times, on-time delivery performance is a percentage calculated by each carrier. It averages the rate of deliveries a carrier makes within the guaranteed window of estimated delivery dates.
Let’s break that down. Each carrier service comes with an estimated delivery date (EDD). For example, UPS 3-day select guarantees shipments will arrive within one, to three days. DHL eCommerce Expedited service guarantees shipments will arrive between two, and five days.
While many packages will meet these guaranteed delivery dates, not all will. On-time delivery performance is a calculation of the average percentage of shipments that make it to their destination on-time. Remember carriers deal in thousands of shipments per day, so the difference between 95% and 99% on-time deliveries is huge.
Make sure you check in on your carrier’s performance often. In the past few years, with historical ecommerce growth, carriers have struggled to meet their delivery guarantees. Tracking your carrier and service over time can tell you a lot about their ability to remain consistent when demand surges. This will come in handy during peak season.
How High are Their Claims Ratios?
If your carrier loses or damages packages (which happens sometimes!) they will alert you to the issue and you’ll have to file a claim with the carrier for any reimbursement.
While a few lost packages here and there may not seem like a lot, factor in the time it takes you to file, issues and receive the claim—plus the time your customers are waiting for their products.
If your shipping carrier’s claims ratio is above 1%, that’s a red flag and you should look elsewhere for shipping service. This is something LTL shippers need to be more vigilant about as claims come into play more often with LTL than other types of freight shipping.
What Service Regions do They Cover?
Knowing where most of your products will be shipped is an important first step to choosing and vetting a shipping carrier. Not all carriers ship everywhere, and some may charge extra for specific regions that another carrier doesn’t charge extra for.
Regional Carriers
If you have very regional customers, you may not need to spend the extra money on a national carrier. Not all national carriers are more expensive, but some of the major ones are.
Finding a regional carrier to serve the specific area you need to ship will help in the following ways:
- Better understanding of local weather conditions
- Greater speed to customer doorsteps
- Lower overall average transit times
- More flexibility due to less complex networks
- Fewer and lower accessorial charges due to less overhead
- Higher on-time delivery rates
Delivery Area Surcharge (and Extended Delivery Area Surcharge)
One of the most common surcharges is delivery area surcharge (DAS). It is applied to deliveries and pickups that occur outside a carrier’s standard area of shipping. These surcharges offset the carrier’s costs—more fuel, longer hours (cost of labor) and it’s more miles on a truck—to get packages to higher cost-to-serve areas or remote areas.
Carriers all determine their regional surcharges differently. Check if the regions where you ship are included in your carrier’s delivery area surcharge range, or extended delivery area surcharge range.
Measure Their Capacity Against Your Scalability
No matter how big your operation is now, the hope is that you’ll grow your business and have a carrier who can meet your needs throughout your growth.
For smaller businesses, with a tighter budget and low volume shipping, you might be interested in a carrier who specializes in LTL, or less-than-truckload. LTL is like carpooling for freight cargo. When the amount of a company’s shipment won’t fill an entire truck, the shipping carrier will share cargo space with other company’s products to maximize the freight capacity on their trucks.
If you are a medium sized business, you might need LTL services during the year, but FTL (full truck-load) services during the peak or holiday season. Full truck load is exactly what it sounds like: your company’s freight will take up the entirety of a truck’s capacity.
Whatever size your business is, make sure your carrier’s capacity matches your company’s needs.
Read more about the differences between FTL and LTL.
Can You Integrate Into Their TMS?
A carrier with robust technology capabilities will make your shipping more efficient, which ultimately maximizes customer satisfaction.
The main technology system your carrier needs is a transportation management system, often called TMS. This will communicate shipping and order information between you, the carrier, and any other partners who need to know shipment status (fulfillment provider, distribution center, returns manager, etc.).
A great TMS can integrate with your current systems to improve the following:
- Sync with inventory for more accurate orders
- Give you real-time information throughout the shipping process
- Communicate with the warehouse for greater accuracy
- Give customers proactive shipping information
A carrier also needs to be able to integrate with your systems. For example, if you outsource fulfillment to a 3PL, the carrier needs to be able to communicate with your 3PL’s warehouse management system to ensure pickups and drop-offs are handled on time.
If you are an ecommerce brand looking for transportation management support, or help switching to a new carrier, DCL Logistics can help. Reach out for a free freight quote, or to chat about how we help high-growth brands scale.
Tags: KPIs & Metrics
