8 answers to your questions about shipping management

Shipping management is a tough game. There are so many challenges and variables, and so much to learn – but the best way to learn is to ask! Here are a few of the shipping management questions we receive most often, with answers and advice from our cloud logistics experts.

We love answering your questions and sharing our know-how, so if you’d like to chat more about how to make your freight more efficient, please get in touch!

What carrier should I use?

This is somewhat of a trick question – the best carrier to use is as many as you need! How many do you need? That will differ depending on your situation.

Ideally, you’ll be able to compare carriers for each individual consignment and pick the best one every time based on whatever is important to you. Most of the time that will be cost or speed, but sometimes you’ll need a specialist carrier for bulky or tricky shipments.

Unfortunately, that’s tough to do on your own. It involves logging in to each carrier portal individually and noting down their prices. By the end you’ll have 20 tabs and a spreadsheet to manage. A smart freight management platform (like MachShip) lets you plug in your carriers and your agreed rates, and compares them all in a single click. Then you just pick the best one and generate the job.

How are shipping rates determined?

Shipping rates are a complex soup that can be flavoured by any and all kinds of factors. The ‘meat and vegetables’ are your volume/weight, mode/speed of transport, origin and destination. Basically, how much weight or space are you taking up, and how long are you taking it up for? That forms the bulk of your rate.

Then carriers add the seasonings – surcharges based on complexities of the consignment and the general freight landscape. There will be a fuel surcharge, and they may charge extra for certain geographies or bill you for people hours if loading or unloading is required.

Each carrier has their own complex way of determining these rates, often presented in an ugly spreadsheet (also known as the rate card). MachShip, however, allows you to compare final rates, with everything already accounted for, so you can simply pick the best price knowing that your consignment will get where it needs to go. If you have your own rates or carriers, you can add them to MachShip and they’ll be factored in.

What’s the difference between parcel and freight?

The main difference between parcel and freight is size. The secondary difference, if you’re sending either or both, is that often different companies handle each.

A ‘parcel’ typically refers to an individual package with its own consignment and label – for example, an ecommerce business shipping its products directly to customers.  Parcels are usually small and lightweight, and each carrier will have their own way of dealing with them.  Australia Post’s price guide, for example, allows parcels of up to 22kg to be sent via Parcel Post – any heavier and you’re referred to their courier service.

Freight, on the other hand, is transported in bulk – either by truck, train, ship, or aircraft. Because of the nature of the travel required, the way freight is packaged and sent is a little more standardised – but no less complex. Often, carriers will choose one or the other to specialise in, making it difficult for businesses who ship both kinds. This is where a good freight management system comes in – you can integrate your freight and parcel suppliers in one place so you’re always covered.

What do my customers expect when it comes to shipping?

Your customers’ expectations are influenced by many factors depending on the industry you’re in, and whether you’re a B2C or a B2B business. If you’re providing a convenient online store for something that hasn’t previously been available, your customers may grant you some leniency when it comes to receiving their goods – however if you’re entering a competitive market, you need to stand out (or at least compete) on shipping.

The goal is to hit that ‘sweet spot’ of keeping your freight costs manageable while still upholding those customer expectations. Be careful – today’s digital experiences (think UberEats or Domino’s live tracking) have influenced people’s expectations. Even if they’re a B2B customer, they know what’s possible with technology. Our recommendation: providing a great tracking experience goes a long way, even if your freight isn’t the fastest in the market. People like to know where their stuff is.

Why would I use more than one transport company?

There are many reasons you should have a few carriers on call. The first (and most important) is price. Every carrier will come in at a slightly different rate, so why not compare carriers on every consignment and pick the cheapest one each time?

Other factors are geography (some carriers are better in different parts of the country or the world), or if you send varied shapes, sizes and weights of freight. This article is a good source of further information on the topic.

How can I make my freight more environmentally friendly? 

There are a few ways to come at this – some you can start doing straight away, and others are a ‘watch this space’.

Start by looking at your packaging. Use recycled or recyclable materials where you can, but also consider the size – the more you can fit in a truck or train, the less trips need to be taken. Shipping in bulk where you can will also reduce the amount of trips needed.

Be deliberate about your choice of carriers for each individual consignment. Picking the best carrier each time makes each trip more efficient. And being more efficient isn’t just better for the environment, it also saves you money. Choosing carriers who avoid air travel can go a long way to reducing the carbon footprint of your freight. Some carriers are using hybrid vehicles and biofuels to power their transportation – make sure you shop around to find carriers who align with your objectives.

You can also offset your carbon emissions with carbon neutral shipping, but the space is developing and is still unregulated here in Australia. There’s still work to do to make it effective – not just in shipping, but beyond as well. Keep an eye out for developments!

Should I have freight insurance?

Some shippers swear by freight insurance. Others don’t bother. Whether you should or shouldn’t take up freight insurance will depend on your broader philosophy on shipping management.

You can expect to lose between 1-2% of your freight each year. If you’re shipping makeup to customers, you can probably absorb this – but if you’re sending larger shipments, bespoke products or expensive cargo (especially B2B), you’ll need some kind of risk management in place.

There are many factors to consider, both when deciding whether or not you need insurance, and then picking a potential insurer. Our biggest tip is to make sure you’re effectively tracking all of your consignments and collecting high-quality data at every point. This will help when it’s time to claim.

What data matters when it comes to shipping my freight?

Data is the lifeblood of shipping management. You can use data to monitor the performance of your entire freight task and make changes to boost its efficiency and lower costs. Here’s what you need to be tracking:

• Customer Net Promoter Score (essential in B2C shipping)
• Carrier performance (DIFOT)
• Overall expenditure
• Number of, size of, and reasons for discrepancies on carrier invoices
• Your total freight cost (including freight charges, warehouse and customer service)
• Returns (and reasons why)

How do you get the data? Don’t rely on your suppliers to send data back upstream – it’s not their forte. Track everything through your freight management system. That way you know the data is reliable, and it updates in real time.