How to Turn Shipping from a Cost Center to a Revenue Contributor by Vince DeAngelis
Vince DeAngelis is 34-year veteran of the shipping and mailing industry who joined Shippo in January 2021 as its Vice President of Global Carrier Partnerships.
Before that, he spent 10 years at Quadient where he managed all aspects of their carrier partnerships, as well as shipping product and program management and U.S. based R&D.
DeAngelis spent the first 20 years of his career working for the United States Postal Service. His roles at the USPS included Manager of Ad Mail Sales Development in Windsor, Connecticut, and Regional Director of the New York Sales Center before being named National Director of Sales and Business Development and Director of Brand Management, Value Added and Special Services, in Washington D.C.
Responding to Big Changes
DeAngelis used to offer advice like, “Don’t use overnight shipping on a Friday,” “Use USPS for their free boxes,” and, “Make sure your addresses are correct.” The last one still applies, by the way. But your shipping center is already a profit center, so his advice now will speak to how to keep it that way.
The world is changing. Every day brings something new to the way we travel and act. For someone who’s traveled 75,000 miles per year for the last 20 years, not traveling at all in the past 16 months has been a huge change.
Until the pandemic, he had never experienced a shipper being unable to pick up all of his packages at an agreed-to time. What you need to do is:
Educate yourself on how your shipping characteristics line up and what your patterns are:
- Do you ship six days a week?
- Do you mostly ship at the start of the week?
- Are most of your orders shipped in the holiday season?
Understand your ordering needs and your customers’ ordering habits. Then make sure you pick your carriers and also have alternatives on standby.
Harness the tools. Technology is your friend. Companies like Shippo offer advanced tools to help you with your shipping, costs, and carrier library. The shipping industry has become fragmented, so it’s increasingly important to integrate them together as much as possible.
Monitor relentlessly. You’re going to look at things you’ve never looked at before. Watch indicators around the ecosystem of shipping, such as commodity prices, to see the state of the industry. They can tell you if there are bottlenecks or if things are loosening up.
Use Both National and Regional Carriers
The four big national carriers cover the entire United States, and you probably use one or more of them. But it’s a good idea to also use regional carriers. Peak season will be here before you know it, so it’s important to know your options ahead of time if your usual carriers are unable to meet your needs when demand reaches its apex.
Talk to your main carriers about your needs in the coming months. And talk to secondary and tertiary carriers about providing backup if overcapacity becomes an issue again.
Pay attention to your contracts so you won’t accidentally divert too many shipments to other carriers and miss out on volume discounts from your main carriers. No matter the cost, the most important thing is to get products to your customers in a timely manner.
Stay Informed of Market Changes
Distribution networks are evolving. Freighters got held up for a long time, causing commodity prices to rise dramatically. Keep informed about what’s happening around the world that can affect your costs and shipping times.
Value-added tax (VAT) is changing in many countries. If you use international shipping, pay attention to VAT. You don’t want to have a shipment held up because you didn’t pay exact taxes.
All carriers offer customer events to educate you on the latest developments in the shipping industry. It’s a good idea to attend as many as you can.
Apply what you learned last year about your carriers’ capacity and apply those lessons to this year. Hope for the best, but plan for as many contingencies as possible going into peak season.
Use the Latest Technology
Advanced technology will help you measure service levels and stay on top of your shipping. With actionable measurements, you’ll be able to address concerns with carriers and ensure you’re getting what you paid for. Ease of shipping creates a memorable customer experience. Returns are also important to customers.
Online customers are increasingly doing bracket purchasing. They purchase a few different sizes of shoes or clothes to try them on. Then they return the ones that don’t fit perfectly. Returns are an important part of the customer’s buying experience. You need to make the return process as easy as possible for customers.
- Negotiate shipping terms to balance costs with customers’ needs in mind.
- Proactively communicate with sales reps at your carriers to get ahead of capacity issues.
- Make sure your shipping technology is scalable to delivery. You don’t want to be surprised by delivery failures or other negative customer experiences.