Why Courier Management Systems Are the Answer To Growing E-commerce Order Volumes

For most e-commerce brands and sellers, including logistics and courier services, in-house would mean heavy investment in manpower, technology, and time

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Global e-commerce sales, standing at $4.9 trillion in 2021 are expected to grow by almost 50 per cent over the next four years and reach $7.4 trillion by 2025. According to Boston Consulting Group, the number of packages delivered globally is projected to reach 200 billion by 2025. Be it offline retailing or e-commerce, logistics service providers have become a lifeline for shipping needs.

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However, certain challenges plague the logistics service provider (LSP) sector. For instance, evolving consumer demand patterns, lack of digitization, inadequate address accuracy, and the heavy reliance on manual resources for planning, streamlining, and monitoring day-to-day operations make it hard for the LSPs to operate on big margins.

So what can LSPs do to optimize costs, eliminate redundancies, and build a robust and efficient ecosystem?

Courier management systems as a response

A smart courier management system can assist logistics service providers and retailers to analyze, monitor, track, and manage end-to-end logistics processes. For most e-commerce brands and sellers, including logistics and courier services in-house would mean heavy investment in manpower, technology, and time.

A courier management system, at the same time, helps pick the most cost-efficient logistics provider, manage invoicing, and digitize and optimize the end-to-end process from field logistics management to doorstep delivery. It improves customer experience through better engagement, real-time order tracking, communication and much more.

With AI-enabled algorithms and integrated dashboards that can be customized, courier management software minimizes the time, effort, and resources required to ensure efficient deliveries. This enables the LSPs to grow alongside e-commerce, making for efficient, hassle-free experiences for all relevant stakeholders such as hub managers, and drivers. Here's how end-to-end courier management platforms can help:

Ensuring real-time visibility and tracking: Real-time visibility is crucial to facilitate the demand for quick, and frictionless deliveries. However, visibility becomes a challenge if handled manually or through legacy systems. An AI- and ML-driven courier management platform allows LSP, retailer (consignor), and consumer (consignee) to track the shipments in real time. They offer GPS tracking, real-time updates, and route optimization and deploy algorithms to mitigate the risk of fake delivery attempts and inaccurate customer addresses. Cloud-based courier management platforms extend highly agile and customizable modules. Since these modules can be easily integrated with enterprise systems such as ERPs, TMS, etc., they can directly fetch data from these systems to get actionable insights. Hence, it helps build proactive logistics strategies and ensure delightful customer experiences. Complete real-time visibility over delivery progress helps reduce customer complaints by 28 per cent.

Seamless delivery orchestration: Poor delivery orchestration, especially in the last mile—which is also infamous for being the costliest leg of the entire logistics operations—can wreak havoc on profitability and customer experience. Hence, to ensure a smooth logistical run, immaculate last-mile delivery orchestration is vital.

Smart courier management platform helps LSPs to gain a real-time view of deliveries to facilitate cost-effective operations, leverage geocoding to improve delivery accuracy, and optimize routes to reduce last mile costs by 23 per cent and mid mile costs by 12 per cent. They also allow easy on-boarding of multiple third-party logistics partners to aggregate last-mile operations, garner actionable data, communicate with customers, and verify non-delivery reasons.

Improving scalability and expansion: Traditional systems fall short in effectively scaling first-mile pickups, mid-mile operations, and last-mile deliveries. They are unable to perform certain tasks at scale like customer on-boarding, invoicing, data management, etc. In fact, 54 per cent of 3PLs take three or more days to deliver invoices to customers.

Courier management systems automate multiple processes to expedite operations such as shrinking customer on-boarding time by 45 per cent. Tasks that are automated include, scan-based pickups, label generation, hub and rider allocation, trip creation, alerts for delivery milestones such as completion, missed deliveries, and electronic PoD (proof of deliveries), etc. Such tools can seamlessly collaborate with multiple 3PLs on the same platform to facilitate real-time visibility over operations, manage hub-to-hub movement, ensure efficient communication, and effective management of cash reconciliation and payment integrations.

Enabling smooth cross-border logistics operations: Cross-border e-commerce is on the rise. Today, over 2.1 billion people buy goods and services online, and 68 per cent of customers shop from foreign websites. Managing cross-border-specific processes such as documentation, customs, shipment tracking, etc., manually or zeroing in the right 3PL for the same can be challenging for businesses. It is not only time-consuming but it also results in massive cost leakages.

Courier management systems leverage automation to on-board the right 3PL based on cost, performance, specialty, and other parameters. Such intelligent systems can be extremely helpful in ensuring smooth cross-border customs clearance, real-time tracking of multiple shipments via a single dashboard, and driving analytics efficiently.

Although outsourcing logistics processes can be a tricky part to navigate, with an end-to-end courier management platform, delivering a stellar customer experience while optimizing costs and scalability becomes easier.