It’s no secret that costs have drastically increased since COVID-19. Most brands have seen significant increases in their supply chain costs and have watched their margins decrease. Unfortunately, it looks like 2024 is shaping up to be no different as carriers and logistic companies are signaling rate increases for the new year. So how can brands mitigate these rising costs? By optimizing your network and being strategic in your planning, you can help keep costs manageable and save your profit margins.
How do you know your network is optimized?
Both FedEx and UPS have raised their rates for peak season and 2024. Both have almost doubled their peak season surcharge and have increased their postal rates to an average of 6%. These increases in prices will affect both brands and their customers. Shipping for e-commerce brands is going to be more expensive and could mean brands have to raise prices to accommodate rising costs.
One way to mitigate these rate increases is to optimize your network. Putting your product closest to your customers can help cut down on your shipping rates. The less your product travels to its end destination, the less you have to pay. Having a 3PL that has locations across the country can help you disperse your product across their warehouses to make sure it’s as close as possible.
Optimizing your network also allows you to keep products stocked where it’s needed most. For instance, at Smart Warehousing we can analyze your historical data and help you decide how much inventory should be at which warehouses. We can see order history and customer location to help make sure you have the right amount of inventory at the right location. You won’t have to worry about urgent orders being shipped from across the country or paying high postage fees to overnight a package to maintain delivery expectations.
Do you have the best parcel rates?
FedEx and UPS have already stated they will be raising their rates for 2024. That means next year it will be more expensive and harder for brands to get their products delivered to their customers. It can be difficult to negotiate rates with carriers, especially if you’re a smaller brand or have a lower order volume. So, what can brands do to help get the best parcel rates for their business?
Some 3PLs have relationships with carriers and postal companies and can help you lower your shipping costs by leveraging their rates with these partners. If the 3PL has a strong partnership with FedEx or UPS, they can usually get you a lower rate through their relationship than if you did it yourself. They can also help you plan ahead for boxes and certain weights if you have irregular products or special items.
Smart Warehousing has several relationships with carriers and can get you a discounted rate through their partnerships. A lot of brands will ship through their own FedEx or UPS number but end up paying higher rates and more fees since as a whole they don’t ship enough packages themselves. For 3PLs, they can utilize all their customers' shipments to help negotiate a better rate. With hundreds of orders shipped every day, Smart Warehousing has the ability to negotiate competitive rates for our customers. We can also help get our customers faster shipping and capacity with our partnerships.
How can a 3PL Can Help You Optimize?
Trying to optimize your network can be challenging, especially if you work with a 3PL that isn’t working with you. That’s why it’s important that you have a 3PL that wants to be your partner and help you grow. A 3PL can utilize their network of warehouses and their tech stack to help you optimize your supply chain and make sure it’s as efficient as possible. They can also leverage their relationships with partners to help get you the best rates out there and help you keep your operating costs low.
At Smart Warehousing, we want to be your back-of-the-house partner that helps you not only optimize your network but help you grow and scale your business as well. We can utilize our warehouse locations across the country to put your product near your customers, helping reduce travel time along with lowering your parcel costs. Using our WMS system, SWIMS, we can help you keep track of your orders and your inventory, so you never have to worry about whether your product is in the right location. Smart Warehousing also has relationships with national and international carriers, which allows us to help you get better freight and parcel costs. Your brand's success is as important to Smart Warehousing as it is to you. Partner up with the smart choice and contact us today to find out how Smart Warehousing can be your 3PL partner.