Multimodal Parcel Routing Gets Complicated: Why a Global TMS Lowers Freight Spend

Multimodal Parcel Routing - Men Moving Boxes Out Of A Van

Managing small package freight optimization or parcel routing optimization can seem overwhelming. That is until your company looks at how a global TMS lowers freight spend by improving parcel routing efficiency.

Misconceptions of Multimodal Parcel Routing

Many people see multimodal parcel routing as the same thing as intermodal parcel routing, but there are key differences. In intermodal parcel routing, there are multiple carriers and multiple modes. But with multimodal routing, there’s always one master bill of lading. The parcel may switch between modes (air, truck, rail, etc.), but the bill of lading stays the same and follows the parcel from one location to the next. This can be an excellent way to optimize parcel routing. But first, consider a few misconceptions:
  • Parcels are too small to optimize effectively. Not true. With proper multimodal parcel routing options, land, air, and rail can be used to ensure that these parcels make their way to their destinations faster and more efficiently. Not only does that free up some shipping options with convenience and creativity, but it also helps to ensure that parcels are in the hands of the people who need them in ways that are more efficient and effective than ever before.
  • Parcel carriers generally cannot offer better rates. Parcel carriers can offer better rates if the packages go through consolidation into LTL or FT and are moved as a group and not as the individual parcels themselves. This essentially provides a “bulk discount,” even if the parcel routing didn’t start as one combined group of shipments from a specific company.
  • Prior reports have suggested customers are often willing to pay premium rates for higher-cost parcels if those parcels are delivered more quickly. However, that is the exception and not the rule. As reported by DC Velocity, “NRF study found that 75 percent of consumers surveyed expect delivery to be free even on orders under $50, up from 68% a year ago.” So, better parcel management is the only thing to consider going forward.

Global TMS Capabilities Enable Similar International Freight Management

With global TMS capabilities, your company has the option to strengthen your parcel routing and international freight management on a worldwide scale. According to a recent Parcel Industry article, “…not getting the goods to their destinations in the time required by the customer can mean losing a customer or losing a contract.” The value of parcel routing is higher than ever before — and so are the stakes.

Because so many clients want their parcels faster, it’s essential that your company understands and embraces TMS functionality, including robotic process automation and how that can enable strong parcel routing management. You can lower your freight spend with this system, because parcels that travel together can command better rates — especially when clients spend more to get these parcels faster.

How Parcel Routing in a Global TMS Keeps Freight Spend in Check

There are many ways that parcel routing in a global TMS can reduce freight spend for your company, such as:
  • Proper routing of shipments from the beginning, to minimize errors.
  • Meeting regulations for the carrier to avoid rejected shipments.
  • Lower costs of training, with a unified system for employees.
  • More on-time deliveries for stronger client relationships.
  • Robust parcel movement for on-time efficiency.

Explore the Virtues of Global Executability in Freight With a Worldwide TMS System

You can have genuine, global executability in freight when you choose to handle your parcel routing through a worldwide TMS system. Help take your company to the next level of global freight shipping.

Check Out a Demo of What MercuryGate’s TMS Offers Today

John Martin
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