Up until about eight years ago, most of Harvey Software’s customers were manufacturers, freight forwarders, or other large shippers. Today, the shipping processing system vendor, which makes the Computerized Parcel System (CPS), is finding that 90% of its customers are direct retailers, according to president/CEO Bert Hamilton.
Why the increased interest among retailers in shipping processing systems? In a word, cost: It’s more important to manage shipping costs these days, Hamilton notes.
One reason is that catalog or Web buyers were expected to pay shipping costs years ago. As the Internet has evolved — and as buyers have gotten smarter — according to Hamilton, shippers began working to gain competitive advantage by offering free shipping or flat-rate shipping.
“There are no shipping charges when customers visit brick-and-mortar retailers,” he points out.
What’s more, merchants have found that free shipping or flat-rate shipping encourages customers to buy more. With many multichannel retailers paying shipping costs, it’s crucial for them to manage these costs as carefully and wisely as possible.
Robert Silberman, president of system vendor Process Shipper, agrees. “Shipping is the last area where the company still has control,” he explains. “It is the last chance for them to control costs.” Some companies are finding that they can turn shipping into a profit center by streamlining their processes, and greatly improve customer service at the same time, he says.
Dydacomp, which makes the Mail Order Manager (MOM) shipping processing system, is seeing a demand for seamless, end-to-end integration with shipping processing systems. That means the tracking number and shipping label content are available throughout the whole order process, says president Robert Coon.
“Customers are also looking for flexibility with carriers,” Coon says. In terms of efficiency, shippers are finding that it makes sense to send some packages out via FedEx, others via USPS, and so on. MOM is designed to take an order straight through from entry to inventory management and warehouse processing, and then to shipping; a standard system starts at $1,795.
Jeff Platt, director of product marketing, U.S. Mailing, for Pitney Bowes, which makes the SendSuite shipping processing system, also sees more shippers seeking flexibility. “Before, a carrier would come in and provide a free system to make things easy for the customer,” he states. But as customers tighten their belts, “they are becoming more interested in leveraging a number of carriers.”
More organizations want to know what’s coming in and going out of their facilities, according to Joe Downer, marketing manager, distribution solutions, U.S. Mailing, for Pitney Bowes. “As a result, more customers are moving toward a [software as a service] model and a hosted environment,” he states.
Customers are also becoming interested in being able to access service from regional carriers on their shipping processing systems, says Brian Hodgson, vice president, marketing and business development, for Kewill, which markets the Clippership and Flagship shipping processing systems. “Because regional carriers focus on a smaller geographic area, they can provide extended services, such as later pickup at night and still get it delivered the next day,” he explains.
International shipping services
And then there’s the interest in going global. “We are seeing a lot of growth in international shipping,” says Hodgson. The opportunity for retailers to ship to consumers overseas is a huge growth area, he says.
But there are challenges. One relates to the validity of the consumers and their credit cards. Another challenge is shipping the goods — especially as it applies to compliance. You have to be sure you can ship the items to the given country.
A third hurdle relates to the overall complexity of international shipping. But the big carriers, such as DHL, UPS and FedEx, are looking to provide better service and support for customers here, “because their profit margins are higher for international shipping,” Hodgson points out.
Process Shipper’s Silberman is also seeing the growth in international service demand. “We are in a global economy, with advancements in supply chain management and execution,” he says.
Still, he notes, many companies are archaic in the way they process their shiments: “Some are still even hand-writing their bills of lading.” Shipping processing systems could help some of the companies that are behind the times open themselves up to more international opportunities, he says.
Jack Myers, vice president, sales and marketing, for Aivea Corp., which has the E-Ship Shipping Manager and E-Ship Web Service shipping processing systems, adds: “A lot of organizations outside of the U.S. are starting to look at this technology and adding international carriers.”
William Atkinson, a freelance writer based in Carterville, IL, has written for Apparel and Risk Management magazines.