SupplyChainBrain is the most comprehensive resource for supply chain management information today. The wide range of multi-media formats addresses everything from the fundamental principles of supply-chain management and emerging trends to the latest technologies and cutting-edge solutions and features pieces written by the world’s most influential supply chain executives. Recently, our founder, Josh Dunham, sat down with SupplyChainBrain to discuss the digital transformation of logistics management and the growing popularity of business intelligence tools in the parcel shipping industry.
Business Intelligence in Logistics Management
By leveraging Reveel’s data analytics, we had the ability to run a study using info we gathered via our customer profiles and prospects. The key finding that came from this study is that businesses are having a difficult time with decision-making support, specifically in regards to using data to make or change their decisions. With this data in hand, we found key two business intelligence items that warrant integration into any business’s shipping logistics.
Product Level Analysis
Recently, one of our current customers reached out to request our assistance with saving on their shipping expenses. Upon review, we found this customer was evenly allocating the cost of their shipping across all their product lines, regardless of how much the shipping actually cost. Once the Reveel team started conducting a product level analysis, we found one item consistently getting hit with FedEx’s over max-limit fee, costing the company thousands of dollars, resulting in the product not being profitable after shipping was factored in.
Forecasting & Budgeting
Without business intelligence tools, companies are forced to rely on unreliable manual processes to forecast and budget for their shipping that uses each parcel shippers’ announced rate increases as their benchmark. While 2022 saw a 5.9% increase from both FedEx and UPS, Reveel dug a little bit deeper to find that once you assess the new base rates, using two actual shipping profiles from our own customer base, the increases were significantly more than the 5.9% both companies discussed.
The Reality of the 2022 FedEx & UPS GRI
At the end of 2021, both of the major parcel carriers announced a GRI of 5.9%, exceeding the 4.9% both companies had traditionally increased their rates in previous years. When the Reveel team learned of this increase, we looked into related increases in both rates and surcharges, as well as the introduction of new surcharges. In doing so, we found that shippers actually paid an additional 12.86% with FedEx and 10.25% with UPS, year over year.
Digital Innovation: Bringing Transparency to Shipping
Business intelligence is not a new term in the logistics management field, but the new digital applications that have come into the market have fostered this growing popularity in this sector. In past years, taking data and uncovering the findings we regularly see now required manual processes, but today, Reveel leverages machine learning to assign algorithms to massive data sets to produce invaluable insights into the true costs of shipping logistics.
Today, the two major parcel carriers, UPS & FedEx, control 94% of the market share if Amazon and the USPS are removed from the equation. This results in the two carriers practicing a general lack of transparency when it comes to their rates, surcharges, and available reporting; the easiest place to see this is 2022’s peak season surcharges.
Business Intelligence Tools Sheds Light on Peak Season Surcharges
In 2022, FedEx announced they would begin charging shippers for peak season beginning on September 5th. Typically, peak season runs from October through mid-January to account for the increase of online shopping for the holiday season, with September not traditionally included in that timeline. With this in mind, the Reveel team grew curious and decided to run a shipping volume analysis on the month of September. What we found was that the month was actually 1% below the annual mean average shipping volume for our customer base, excluding October through January. Moreover, shippers can expect to pay between 7-22% more this peak season over last year due to rate increases.
Empowering Businesses with Business Intelligence Tools
When Reveel first started 17 years ago, it was initially a professional consulting firm working in the shipping logistics industry. Four years ago, we had the opportunity to acquire a software development company, and since then, our focus has been on transitioning into the software business. By taking the intellectual property we have as consultants in the industry and pairing it with the machine learning of our platform, we’re able to empower businesses to find their own shipping savings. This way, you have an alternative to paying the high yearly costs associated with bringing in a consultant.
If you’re ready to start saving on your shipping logistics and modernize how you make decisions around your shipping costs, contact the Reveel team to schedule a demo today.