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It’s a huge understatement to say that shipping and logistics management is complex. From budgeting for surcharges, understanding pricing bands and variable pricing schedules, to assessing performance, there’s a lot to consider.
Posted rates from carrier pricing tables are only the beginning. There are expected and unexpected surcharges, negotiated discounts, volume-based discounts, and countless other ways to spend and save money.
So how do you determine if you’re getting the best possible carrier agreement for your business? And, an even more complex task, how do you track improvement over time?
Some Measurements that Don’t Work
Assessing shipping success is difficult for many reasons. Simply parsing FedEx and UPS invoices and extracting usable information is a task in itself. It takes data manipulation and organization that requires hours of work before forming anything coherent.
Once you’ve extracted the data, how are you tracking performance over time? Here are some ineffective methods we’ve seen in the industry:
- Total shipping costs: A flat fee may work for some operational expenses, but not with a sales-sensitive cost like shipping. When sales go up, shipping costs follow.
- Shipping costs as a percentage of revenue: While this metric may get you closer to an accurate gauge, there are still many factors that it doesn’t consider. Shipping costs go up every year, and often more than the 4.7% advertised. And the pandemic boosted online sales, which disproportionately increased shipping costs. Even though businesses are reopening, this shift to e-commerce will likely continue.
There are many holes in these methods, but the biggest we see is that neither considers how your peers perform. What’s the industry average and best in class? Where’s the context?
Why Context Is Everything
I do triathlons, and a lot of people consider time as the ultimate metric. That’s certainly a place to start, but it leaves a lot of stuff out. What if there was a crazy headwind during the biking portion? That would impact my time. Or what if it was a particularly difficult course? Or 100 degrees? How I finish relative to the other triathletes is a much better gauge of my performance than my absolute time.
The same goes for shipping. Without context, you’re using flawed information.
Providing Context with the Reveel Peer Index™
Reveel’s Shipping Intelligence® Platform™ ensures you have understandable and usable data at your fingertips. To thoroughly analyze the health of your shipping you would need a team of advanced data scientists and access to expanded data sets, which is obviously not practical. That’s why Reveel has done exactly that, and made it available to you in an easy-to-use platform.
Within this platform, there’s a single number that you can use to judge your overall shipping success: the Reveel Peer Index (RPI).
The RPI is a number from 0 to 100 that compares your shipping health to your peers with a similar shipping profile to yours. Our advanced data science uses machine learning to mine millions of shipping data points for best practices and rates and highlights where you can improve.
We’re not giving you a score or grade. The Reveel Peer Index is calculated just for you. It’s a way to steer your shipping performance and gauge it against your peers—and see what’s possible.
To learn more about the Reveel Peer Index and the Shipping Intelligence Platform, download the e-book How Do You Measure Shipping Success.
The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items.
