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March 30 2009 04:26 PM

Even under the best business conditions, it is a good idea to seek ways to control costs and improve customer satisfaction. In challenging economic environments, achieving these objectives is essential for survival. One operational area where many companies can reduce costs while also enhancing customer service levels is fulfillment.

The traditional approach to lowering fulfillment costs is negotiating transportation discounts with shippers. Continually evaluating carrier rates is certainly important, but carriers can only lower rates so far — and the approach doesn’t really do anything to help customers. On the other hand, leveraging shipping software provided by carriers puts you in the driver’s seat, adding the unprecedented ability to manage fulfillment operations internally in a way that controls costs and improves customer satisfaction.

Until recently, integrating parcel-shipping software with accounting, ERP or Warehouse Management systems required implementation of a multi-carrier shipping system that complied with UPS, FedEx, DHL and USPS requirements. These systems certainly work very well, but their overall cost is high. Still, when no other options were available, the hefty price tag was justified in order to improve warehouse efficiency and shipping accuracy.

As carriers have started to increase the frequency of their mandatory compliance updates, software maintenance costs have risen significantly and justification has become more problematic. In the past, compliance updates mandated by the carriers typically happened once a year. In turn, multi-carrier shipping systems typically updated four times per year. Today, carriers update their services, rates, accessorial charges, and routing guidelines so frequently that it forces multi-carrier shipping system providers to perform continuous software updates in order to stay compliant. This inevitably drives ongoing maintenance costs dramatically higher and increases the chances for costly errors.

Fully Functional Carrier Software
Now available in the shipping solution marketplace are free, user-friendly, fully functional carrier software (UPS WorldShip, FedEx Ship Manager, DHL EasyShip and USPS). Making this software even more attractive is the fact that software updates and support — for both the software and shipping — are free as well. This means that if you need to ship an order to Guam and are not certain how to do so, you can simply call carrier support and they will tell you exactly what you need to do. 

The free software offers shippers access to most, if not all, of the services that a carrier has to offer. In addition, there is built-in address verification, automatic fuel surcharge updates and email/fax notification of shipment information to your customers as well as many other features. So not only does the software cut costs, but it enhances customer service as well because you can now notify a customer that an order has shipped and also apprise them of delays in package processing.

By now you should be thinking that this sounds too good to be true. After all, more functionality, extensive support services — all for free! Where’s the catch? The missing link has always been the ability to integrate these free systems with your accounting, ERP or WMS system. Fortunately, even that capability is now available with carrier-provided tools that deliver basic integration and import/export functionality. 

Although certainly helpful, many companies find they need a more robust integration and turn to a system integrator who can deliver the needed enhancements with a cost-effective, tailored solution. These solutions can automate the retrieval of customer and order information, update shipment information and enable business rule automation. Essentially, what these solutions offer is deep integration similar in nature to the multi-carrier shipping systems, without the high costs. 

Some of these integrated solutions also offer enhancements for the free carrier software with add-on features such as branded email notification, combination packing slip/carrier labels and pack verification. Some even enable UPS, FedEx and USPS to coexist on a single shipping platform to provide a true multi-carrier solution — again, without the high costs that historically have accompanied such robust functionality.

Case in Point
Hunter Douglas integrated its SAP ERP system with the free carrier shipping technology at locations across the country. “By using a solution provider to implement the integration of the carrier provided shipping systems, we were able to manage our specific business rules automatically without the end user making decisions on a case by case basis. The end result with this approach is that Hunter Douglas was able to significantly reduce our fulfillment costs by eliminating an expensive multi-carrier shipping system,” said Leo Gabrillo, a Senior Project Manager of IT for Hunter Douglas. “The ability to use the carrier provided shipping solutions also reduced the effort required within our IT department to support our shipping operations.” 

What it comes down to is this: By fully leveraging the carrier’s technology and infrastructure with an integration solution, you can have all of the functionality needed to meet your customer’s shipping requirements, reduce the number of shipping mistakes and ultimately drive down fulfillment costs. So ask yourself this: “Am I leveraging all of the technology and resources that are available to me from the carriers?” Most likely you are not. So look inside your warehouse for what could be a simple solution to a complex problem.

Troy Graham is Director of Sales at Oz Development, Inc. Oz is a nationally recognized leader in software development, with particular emphasis in shipping integration solutions. He can be reached at 508-366-1969 or at