Why the Traditional Way of Managing Multiple Logistics Service Providers is Dead


Why the Traditional Way of Managing Multiple Logistics Service Providers is Dead

Imagine managing courier operations just a decade back. A hub manager in a bleak warehouse poring over printout sheets with hand-written notes, marks, and manual assignments to transport and agents. Warehouse employees loading/unloading trucks and placing parcels at the nearest available space, and taking them away for bulk sorting later. Every courier tracking request consuming hours, if not days, with multiple calls, emails, and chats among multiple service providers for getting a shipment movement status update that got stale before reaching a customer, sometimes arriving later than the shipment itself!

When we sit back and ponder about the absolute delight of getting parcels delivered to our doorsteps, and the ability to track parcel movements in real-time, we can’t help but be thankful for technology.  

As the world moves towards a global parcel-shipped volume of 256 billion by 2027, we cannot agree more about the importance of having multiple courier partners. Hence, legacy courier management solutions relying on manual elements become outright irrelevant. The confusion stemming from multiple management interfaces, the inability to gain a centralized view of operations, and poor efficiency owing to manual order allocation and process management – the traditional ways of courier management are obsolete. Here are five powerful management cases that support the statement and highlight the importance of intelligent technology in multiple courier management.

#1 – Efficient Order Allocation

Traditional order allocation flows rely on manual elements that are vulnerable to planning inefficiencies and highly subjective owing to human limits. This prohibits optimal resource utilization in multiple courier ecosystems and leads to inefficient or biased order allocation, especially if the business is large-scale. Further, keeping track of which orders should be allocated to which partner based on cost, shipment, and delivery considerations becomes highly complex. 

On the other hand, intelligent multiple courier management solutions offer in-built features such as AI-powered order allocation engines that automatically map carriers and shipments based on multiple parameters. These solutions allow users to set custom allocation and optimization rules, such as physical consignment characteristics, delivery type, delivery location, vehicle make, capacity, etc. Thus, businesses can automate order allocation among multiple partners while ensuring equitable distribution of load and strategic vendor selection based on serviceability and delivery requirements.

#2 – NDR and RTO Management 

Managing returns and non-delivery in a multiple courier ecosystem is a complex task that involves multiple key considerations, such as the location of return pickups, return consolidation centers/hubs, scheduling these pickups, and planning for operational efficiency. Ensuring all this manually is a tough task, especially when it comes to processes such as collecting reasons for shipment returns, customer feedback, etc. 

Advanced multiple courier management platforms offer intelligent management of RTOs and NDRs via smart in-built workflows for multiple tasks, such as return pickups, transit, and consolidation at the preferred locations. Further, these platforms offer in-built routines to proactively collect reasons for returns, analyze them and improve business processes to keep the NDR rate in check. Another excellent advantage is the ability to set specific performance measurement KPIs to check which particular carrier is registering the highest number of returns and take strategic actions to combat them. 

#3 – Unified View of Operations

Intelligent platforms for managing multiple logistics service providers offer a unified view of operations, assets, and people via highly intuitive and integrated dashboards. Thus, the managers can have a SPOC interface for all kinds of insights, such as returns, pickups, in-transit orders, asset locations, asset performance, and shipment status updates. They can have centralized communication and collaboration with multiple stakeholders and share standardized information in the form of updates and alerts with the end customers. 

This enables them to manage complex pain points, such as parcel damage, delivery failure, thefts, etc. Businesses can also restrict the routing for damaged shipments to reduce the logistics costs and convey the shipment status proactively to the right stakeholder for quick remedial actions. AI-powered platforms for managing multiple logistics service providers also help to track and tackle fake delivery attempts, offer flexible delivery scheduling, and record the incidents such as thefts, damage, loss, etc.

#4 – Vendor Cost Calculation 

Vendor cost calculation in a multi-courier ecosystem is a complex task when done manually owing to multiple individual interactions with multiple service providers and manual comparison for rates, serviceability, etc. Solutions for managing multiple logistics service providers, like Shipsy, offer in-built cost calculators to help businesses create directories for vendor rates, turnaround times (TAT), and serviceability. 

When a shipment needs to be delivered, the system checks these directories to generate a price list for all the courier partners. This way, businesses can easily choose the carrier that works best for them by considering their shipment and delivery requirements.

#5 –  Vendor Prioritization and Selection 

Traditionally, vendor selection and prioritization meant discounted rates or volume commitments. Further, manual vendor selection and prioritization are vulnerable to bias and human limitations and tend to be highly subjective. On the other hand, smart solutions for managing multiple logistics service providers offer rule-based vendor selection and prioritization, where these rules can be defined and configured by businesses as per their requirements. 

Further, they can integrate the cost calculators with partner selection and prioritization modules to automate the selection of a courier partner based on several factors. Thus, the system analyzes multiple logistics functions and business requirements to create highly profitable and optimal vendor-order mappings and helps select the appropriate courier partner. This feature eliminates the need for manual management of partner selection, making the process more efficient and hassle-free.

Smart solutions for managing multiple logistics service providers offer highly integrated carrier and logistics operations management. This helps businesses track real-time shipment movements, digitize invoicing and billing, set KPIs to assess the performance of individual carriers, and collaborate seamlessly with multiple partners.

Such a platform offers complete visibility into all the courier movements across different partners and geographies and empowers businesses to unlock:

  • Up to 18% reduction in RTOs (return to origin) 
  • Shrink last mile delivery costs by 14%
  • Reduce middle mile costs by 12%
  • Provide unified customer experiences
  • Boost customer experience by 28%, and much more


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