Courier Allocation Challenges & How to Solve Them?

Courier allocation is one of the most common challenges faced by ecommerce companies. It’s one of those issues in supply chain operations that everyone’s aware of, but do not cover widely. Common as it may be, even logistics companies cannot deny the fact that without efficient carrier allocation, shipping delays become inevitable. 

Today, we’re here to help you understand some of the greatest logistical challenges in courier allocation and provide viable solutions to overcome them.  

What is Courier Allocation?

In the simplest terms, courier (or carrier) allocation is the process of categorizing and selecting carriers to perform shipping services for orders. When it comes to global supply chain issues and potential challenges in the logistics industry, optimizing carrier allocation is solution that most businesses can easily utilize.

Automated shipping systems can provide valuable insights on the performance of various carriers across multiple locations, charting and predicting varying service quality, shipping prices, and potential labor shortages.

These systems ensure the right couriers are allocated for the right consignments, which can be determined based on location, route planning, delivery times, percentage of accurate deliveries, and overall supply chain challenges experienced by that third party logistics company.

Courier allocation is a key element to foster collaboration between businesses and carriers. Automated systems can enhance collaborations by reducing transportation costs and human errors through carefully determined practices.

Importance of Courier Allocation in Modern Logistics

There aren’t a lot of processes involved in courier allocation. All you’re doing is choosing a specific delivery partner for an order. Sounds easy, right? You’re half-right. It only sounds easy, but it is actually quite difficult, especially if your order volume is high.

However, without proper allocation, you’re shipping at random and risking potential delays. You’re not sure whether a carrier can even pick up products from distribution centers on time, let alone fulfill a last-mile delivery. 

That’s when courier allocation comes into play. It helps supply chain managers ensure they’re choosing the best option for every order, maintain accurate inventory levels, and in turn, meet all customer expectations. 

Top 5 Challenges in Courier Allocation

Let’s now visit five major challenges in courier allocation that can cause supply chain disruptions: 

1. Time-consuming Task

If you’re manually allocating carriers by going to their website and placing an order, you’re going to end up spending more time in order manifestation than other processes. Even if you let your internal team handle it, you’ll simply pile extra tasks on their table and potentially cause manual errors.

Worst case scenario, the official site of your carrier is down and you’re left in the dust with no other options. This causes store owners to wait until the site is back up. While using shipping software can help with API integrations, your team is still spending time categorizing orders and endlessly clicking their mouse to pick the right courier. 

2. Specific delivery requests

Not all carriers can guarantee you the type of service your customers want. Most ecommerce global supply chains depend on providing cheaper or faster shipping. If you can’t offer both, consumers will prefer other brands, giving them a competitive advantage. 

If you have orders that need to be fulfilled within 24 hours or the next hour (for hyperlocal shipping), you’ll have to make sure your carrier can actually deliver it on time. If you don’t have specific carriers available at the right time, you won’t be able to meet customer demand. 

Some customers may also ask for weekend deliveries and if your carriers don’t ship on Saturdays or Sundays, you’re missing out on potential revenue. 

3. Trusting carriers with high-value orders

In-transit damage to goods happens every once in a while and may not matter much if you’ve got excess inventory. However, poor communication can cause carriers to not pay attention to any of your given instructions for high-value orders and won’t be extra careful to protect your products. 

Once you choose a courier and they pick up your order, you’ll always have a concern on the back of your mind regarding such orders. The last thing you want is a consumer spending a good amount of money on your brand asking for a refund or return. 

4. High costs during peak seasons

One of the biggest challenges in carrier allocation is high transportation costs. This generally happens during holidays when delivery routes are packed. Increased costs can hamper your profit margins and make you hardly break even, especially if your delivery partners don’t use route optimization. 

This is also part of the reason why brands leverage multiple suppliers for delivering raw materials (or carriers with electrical vehicles that reduce carbon footprint) and ensure they’re saving time and fuel costs. 

5. Fluctuating pin code serviceability

As a business owner, you want to ideally ship to as many locations as possible in your region. Hence, being on the same page as your carrier is important. However, they may not always be able to serve every pin code 24/7. 

Relying on a carrier and hearing that don’t send delivery vehicles in an area can result in sudden supply chain disruptions. When they’re unavailable to serve a specific pin code, you’ll end up causing supply chain issues and spend more time in reaching out to alternative and facing rising fuel costs.

How to Overcome Common Challenges in Courier Allocation?

While we’ve primarily covered common challenges above, the next section will deal with practical solutions to optimze carrier allocation. 

1. Introduce automation to allocate carriers

While automation has become common among shipping software, it may not be so common for carrier allocation. Imagine setting up rules that enable you to automatically choose a carrier and create orders for the right scenario. Automation ensures that you meet consumer expectations on time and avoid international conflicts for overseas buyers.

2. Prioritize carriers as per performance

Always check a carrier’s historical data (with your brand) before choosing them for a specific delivery. For instance, if a customer asks for next-day delivery, look at carriers who’ve maintained the best on-time delivery rate for next-day delivery over the past month. 

The better courier partner you choose, the higher your chances of having orders fulfilled on time and gaining competitive edge over competitors.

3. Pick trusted carriers for luxury items

To elucidate on the point above, when you’re shipping luxury items, remember to choose carriers with a good track record. You can consider tracking a metric like rate of in-transit good damage or carrier capacity to know which ones are trustworthy of delivering high-value items. 

This is a practical example of using shipping data to your advantage. Picking trusted carriers also ensure you maintain customer loyalty and promote repeat business. 

4. Invest in a smart logistics tool that enables multi-carrier shipping

When you’re dealing with unreasonable transportation prices, consider investing in a smart logistics platform that offers multi-carrier delivery to sustain a resilient supply chain. Better yet, try shipping software containing add-on features, such as branded real time tracking or using artificial intelligence for choosing carriers.

In fact, if you’ve got experience in resource allocation on project management software, you won’t take long the master the art of leveraging technology to pick carriers.

5. Use software with real-time data on pin code serviceability

We know, having someone from a distant region where no carrier is willing to ship at the last minute can hurt your brand’s reputation. Here’s when a shipping tool with real-time pin-code serviceability data sharing becomes handy. 

It lets you know all carriers who can or cannot ship to a specific pin code in real time, ensuring you don’t have to dial up several courier partners to ask their current availability and easily meet customer demand.

ClickPost: A Comprehensive Solution for Efficient Courier Allocations that Always Delivers

Wondering if there’s a platform that can solve the problems we’ve mentioned above? ClickPost is your answer. A holistic shipping solution that specializes in allocating each order to the best available carrier automatically. 

Its ML-based carrier allocation system ensures you ship each order with appropriate delivery partners. Additionally, you have the option of setting up pre-built parameters or leveraging fixed automation rules to assign multiple order types to a specific carrier and practice optimal utilization of delivery partners.

Our platform is simple and transparent, it looks through historical shipping and your provided automation configurations to pick the ideal carrier every time while having real time visibility on all orders. 

If needed, you can always increase/decrease the amount of shipments every carrier is allowed to ship monthly, gain valuable insights on their performance, and reduce risks of picking the same courier every time.

The Bottom Line

When done right, carrier allocation is one of the best ways to increase operational efficiency and maximize customer satisfaction. As long as you make informed decisions with careful planning for problems like high delivery costs using a solution like ClickPost, you’ll make sure every order is shipped as per future demands