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Parcel shipping is growing in volume, cost and complexity; faster than end-to-end transportation management systems are evolving capabilities to support a shipper’s needs. Characterized by crushproof boxes, heavy duty tape and detailed labels, parcel shipping is now the fastest-growing shipment segment. 

This is a result of increased activity in omni-channel retail, e-commerce, same-day delivery offerings and B2B parcel activity. Pitney Bowes Parcel Shipping Index estimates that parcel volumes grew 20%, annualized from 2014 to 2016, and forecasts growth of 17% to 28% each year between 2017-2021.

From apparel and accessories to heavyweight home improvement, more brands, manufacturers and wholesalers are offering direct to consumer service, bypassing middlemen distributors and retail stores. In turn, this is driving demand for next generation solutions across the entire supply chain process. Industrial and manufacturing companies find themselves at the heart of these transactions, particularly in the middle market where companies are both shippers and consignees of goods.

These trends are affecting every industry in every corner of the globe. From discrete manufacturers delivering spare parts, to retailers shipping products from store and receiving returns from end consumers, to clinics sending samples across their laboratory networks.

Legacy multimodal domestic supply chain management systems (SCM), transportation management systems (TMS) and warehouse management systems (WMS) do not have strong parcel capabilities and often rely heavily on partnerships with multicarrier parcel management solutions to provide their customers with the different pieces of the full parcel capability stack that they need.

End-to-end multicarrier parcel management systems, then, are becoming more important as a standalone solution or in combination with a TMS.

Functional capabilities that shippers will need to assess when looking for a suitable parcel management system include the following:   

1) Procurement and contract management to parcel consolidation, optimization and freight payment with reporting and analytics solutions to close the loop.

2) Carrier availability across every regional, national and global coverage area.

3) Industry specific functions which are necessary to meet customer demands.

Shippers, who are not proactively investing or searching for the combination of people, process, and technology to track and optimize their parcel spend and operations, will face an increase in the cost of transportation, experience a decrease in customer or buyer satisfaction and lose revenue-making opportunities. Finding a parcel shipping solution will only become more critical as this fast growing segment of the shipping industry continues to take gain ground.