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Dealing with Parcel Carrier Volatility: A Guide for Businesses

19th June 2024 | by Sam Nardi

Dealing with Parcel Carrier Volatility: A Guide for Businesses
Carrier volatility can be a major challenge for businesses that rely on timely deliveries. Whether it’s due to sudden changes in carrier rates, strikes, weather disruptions, or other unexpected events, fluctuations in carrier reliability can impact your bottom line and customer satisfaction. Here’s a straightforward guide on how businesses can effectively manage carrier volatility, and how Speedy Parcels can help. 


Understanding Carrier Volatility 


Carrier volatility refers to the unpredictable changes in carrier services that can affect delivery times, costs, and reliability. These changes can be caused by various factors such as: 

Capacity Constraints: Carriers often find themselves constrained by limited transportation capacity, particularly during peak seasons or unforeseen circumstances. 

Fluctuating Costs: Increases in fuel prices, escalating labour expenses, and shifting market conditions contribute to unpredictable fluctuations in shipping costs, thereby impacting businesses' financial bottom line. 

Service Disruptions: Weather conditions, natural disasters, pandemic, mechanical breakdowns, mergers, labour strikes, and carrier bankruptcy can all disrupt delivery schedules, resulting in customer dissatisfaction and escalated operational costs for businesses. 


Building a Resilient Carrier Strategy 


To mitigate the impact of carrier volatility, businesses need to build a resilient strategy that includes diversification and robust planning. 

1. Diversify Your Carrier Options

Relying on a single carrier can be risky. By working with multiple carriers, you can reduce dependency on any one provider and have backup options in case of disruptions. Consider the following steps: 

Identify Multiple Carriers: Research and partner with several carriers that offer competitive rates, reliable services, and meet your product delivery needs. Use our parcel carrier checklist to help you find the right carrier for your business needs. 

Evaluate Carrier Performance: Regularly assess the performance of your carriers in terms of delivery times, costs, and customer service. 

Establish Contracts: Negotiate contracts with multiple carriers to ensure you have alternatives ready in case one fails. 

2. Leverage Technology for Better Management

Technology can play a crucial role in managing carrier volatility. Here’s how: 

Shipping Management Software: Use software that integrates with multiple carriers to compare rates, track shipments, and automate the shipping process. 

Data Analytics: Analyse shipping data to identify trends and predict potential disruptions. This can help you make informed decisions about which carriers to use and when. 

Real-Time Tracking: Implement systems that offer real-time tracking of shipments, providing visibility and enabling you to respond quickly to any issues. 

3. Develop Contingency Plans

Having a well-defined contingency plan can help your business respond effectively to carrier disruptions. Consider the following actions: 

Risk Assessment: Conduct a thorough assessment to identify potential risks and their impact on your operations. 

Action Plans: Develop specific action plans for different types of disruptions, such as switching carriers, rerouting shipments, or adjusting delivery schedules. 

Communication Protocols: Establish clear communication protocols to keep customers informed about any delays and the steps you are taking to address them. 


Strengthening Supplier Relationships 


Strong relationships with your carriers and suppliers can help you navigate volatility more effectively. 

1. Foster Strong Partnerships

Build strong, collaborative relationships with your carriers. This involves: 

Regular Communication: Maintain open lines of communication to stay informed about potential disruptions and changes in services. 

Collaborative Problem-Solving: Work together to find solutions to common issues, such as optimising delivery routes or improving packaging to reduce damages. 

2. Negotiate Flexible Contracts

When negotiating contracts with carriers, aim for flexibility to accommodate changes in demand and unforeseen disruptions. This can include: 

Variable Rates: Agree on variable rates that adjust based on market conditions, ensuring you don’t overpay during low-demand periods. 

Service Level Agreements (SLAs): Include SLAs that outline the expected performance standards and penalties for non-compliance. 

Exit Clauses: Ensure there are exit clauses that allow you to switch carriers without significant penalties if service levels are not met. 


Enhancing Customer Communication 


Clear and proactive communication with your customers is essential during periods of carrier volatility. 

1. Set Realistic Expectations 

Set realistic delivery expectations from the outset to avoid disappointment. This includes: 

Accurate Delivery Estimates: Provide accurate delivery estimates based on current carrier performance and potential disruptions. 

Transparent Policies: Clearly communicate your shipping policies, including how you handle delays and disruptions. 

2. Keep Customers Informed 

Regular updates can help manage customer expectations and maintain trust. Implement the following practices: 

Order Tracking: Offer real-time tracking options for customers to monitor their shipments. 

Proactive Notifications: Send proactive notifications about any delays or changes to delivery schedules. 

Responsive Support: Ensure your customer support team is prepared to handle inquiries with adequate training to respond promptly. 

Carrier volatility is an inevitable challenge for businesses, but with the right strategies in place, you can minimise its impact. By diversifying your carrier options, developing contingency plans, strengthening supplier relationships, and enhancing customer communication, your business can navigate disruptions more effectively and maintain high levels of customer satisfaction. 


How Speedy Parcels Can Help 


Speedy Parcels is dedicated to helping businesses navigate the challenges of carrier volatility with our proactive approach to parcel logistics. We work with a network of reliable carriers, ensuring you always have multiple options for your shipping needs. Through our customer portal you can easily track all your parcel shipments in one place.   

Our team will keep you informed of potential disruptions and help you make informed decisions, while our flexible contracts and strong carrier partnerships provide the security and adaptability that your business needs. Additionally, our team is always just a call away, ready to assist with any issues, ensuring smooth and timely deliveries. 

For more information on how Speedy Parcels can support your business and enhance your parcel shipping operations, contact our team today 

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