Parcel shipping has always been expensive, but this year’s logistics ecosystem has presented a particular challenge to even the most experienced shippers.
Why? Because the true cost of shipping has skyrocketed.
FedEx and UPS raise their base rates annually, but surcharges, new billing rules—such as cubic volume assessments and credit card fees—can add unexpected costs that significantly impact your shipping budget. With multiple carriers, dozens of surcharges, varying service levels, and complex rate structures, many businesses struggle to maintain a clear picture of their parcel shipping expenditures.
Whether you ship 500 parcels a week or 50,000 a day, true visibility lets you see every dollar, every package, and every carrier decision—and act before the next invoice arrives in your inbox.
In this blog, we’ll discuss the importance of parcel spend visibility, why having complete transparency of your shipping costs can elevate your shipping operations, and how to overcome the challenges of today’s logistics environment.
The Current State of Parcel Shipping Complexity
The parcel shipping landscape has run wild over the past few years, creating significant challenges for businesses trying to maintain visibility into their shipping costs.
Since the ecommerce boom in 2020, 33% of the world’s population—or 2.77 billion people—shop online. So, not only are more people shopping online, but customer expectations for delivery speed continue to rise, which puts even more pressure on shippers.
A typical business shipping parcels today may encounter:
- Surcharge increases as high as 29%
- Different rate structures based on account type and volume
- Zone-based pricing that varies by origin and destination
- Dimensional weight calculations that can dramatically increase costs for lightweight but bulky items
- Peak season surcharges that fluctuate based on volume and timing
- Service guarantees with complex eligibility requirements and exception conditions
These challenges are magnified in multi-carrier environments, where each carrier has unique terminology, billing formats, and pricing structures.
What is Parcel Spend Visibility?
Parcel spend visibility refers to having complete transparency into all aspects of your shipping costs, allowing you to track, analyze, and optimize every dollar spent on parcel shipping. This comprehensive view goes far beyond basic package tracking. Parcel spend visibility provides real‑time, end‑to‑end insights to capture, normalize, and analyze every cost driver behind a parcel’s journey.
A complete parcel spend visibility solution includes:
- Comprehensive cost breakdowns – Base rates, surcharges, fees, and special handling charges for every shipment
- Performance metrics – Breakdown of actual delivery times versus promised service levels, exception rates, and carrier compliance with negotiated rates and terms
- Historical analysis – Carrier performance, trends in shipping costs, and volume patterns over time
- Predictive insights – Forecast future expenses based on historical patterns and upcoming carrier rate changes
- Allocation tracking – Attribution of shipping costs to specific products, customers, departments, or business units
True visibility means having this information available in real-time, presented in accessible formats that support decision-making at both operational and strategic levels.
Limited Parcel Spend Visibility Can Cost You
Without the full picture, you can never be totally sure that your shipping operations are performing at their best. Without comprehensive visibility into your parcel spend, your business faces numerous financial and operational risks:
- Hidden costs erode profitability – Surcharges and accessorial fees can account for up to 50% of total shipping costs. Without visibility, these expenses can grow unchecked, quietly (and drastically) diminishing your margins.
- Carrier billing errors go undetected – 75% of parcel credits owed by UPS and FedEx go unclaimed every year. Without proper visibility, these overcharges are paid without question.
- Forecasting becomes guesswork – When you can’t accurately track current shipping costs, budgeting for future expenses becomes speculative at best, leading to cash flow surprises and budget overruns.
- Service failures remain unaddressed – Without visibility into delivery performance metrics, you can’t hold carriers accountable for service level agreements or identify patterns of failure that impact customer satisfaction. You’re stuck in a costly pattern of inefficiency.
- Parcel spend optimization opportunities are missed – The inability to analyze shipping patterns prevents you from identifying more efficient service level selections, packaging improvements, or order fulfillment strategies.
- Customer service suffers – Limited visibility into shipment status and delivery issues leaves your customer service team reactive rather than proactive, damaging the customer experience.
As shipping volume increases, these visibility gaps become even more costly.
4 Benefits of Enhanced Parcel Spend Visibility
Without complete parcel spend visibility, your shipping strategy is a liability. With the right tools and data, your business can reap the rewards of:
- Improved carrier accountability – Hold carriers responsible for their service commitments and receive appropriate credits for service failures.
- Data-driven contract negotiations – Enter contract negotiations confidently with complete cost and usage data to secure better discounts, reduced surcharges, and improved terms.
- Accurate budgeting and forecasting – With a complete understanding of your contract terms, you can confidently forecast your shipping outlook—don’t worry about overextending your shipping budget again.
- Optimized shipping process and routes – Data-driven insights enable more efficient shipping processes, strategic warehouse location decisions, and optimal carrier selection based on destination and service requirements.
Case Study: How A Fashion Marketplace Saved $6 Million With Parcel Spend Visibility
A leading online fashion marketplace faced rapidly increasing shipping costs as its business grew. With limited visibility into their parcel spend across multiple carriers and a complex dual shipping process, they struggled to understand why shipping expenses were growing faster than sales volume.
The company chose Reveel’s Parcel Spend Management 2.0 technology to improve carrier selection, manage shipping costs, and optimize warehouse networks. It was discovered that the company’s new carrier contract would place them in a lower revenue tier, significantly impacting their shipping fees.
The results? $6 million in savings.
The company also identified several optimization opportunities, resulting in annual savings of over $1 million. Thanks to parcel spend visibility, the fashion marketplace was able to enhance shipping efficiency and allocate funds to other areas of the business.
Turn Visibility Into Action With Reveel
Whether you’re a small business or a global organization, parcel spend visibility is a crucial component of financial and operational management.
Reveel’s PSM 2.0 software is equipped with automated auditing, historical analysis tools, predictive modeling, and contract management technology to turn your shipping operations into a competitive advantage. Request a demo with our team here.
