5 Ways to Create Innovation in Shipping

The 21st Century has been marked by incredible paradigm shifts - and no industry has been immune, including logistics. In an era of amazing technological innovations, carriers need to get their operations in line with modern expectations and needs in order to continue to be viable; they need to create greater innovation in shipping.However, there is a lot of work left for them to do.A recent article in the Wall Street Journal highlighted how UPS, a preeminent global carrier, is working with a system that "Thirty years ago... was top notch." In fact, UPS is still using an analog control panel and a system of pulleys and conveyor belts.In order to upgrade their system to be in line with today's needs, UPS has announced it will be investing $20 billion (yes, with a B) over the next 3 years on critical infrastructure. How this implementation will take place and how effective it will be will come down to identifying the real areas of concern and upgrading them in the most efficient way possible.This issue does not only apply to freight carriers - in fact, all companies with a supply chain need to take heed. Today's supply chains must be upgraded to meet the needs of an ever-changing market.Shipping, in particular, is proving itself to be an area in which companies must "innovate or die." As has been widely reported, shipping costs are increasing at a rate that has never been seen before. As a result, businesses need to find cost savings wherever they can.Innovation in shipping is one area in which companies can identify and mitigate these added costs.There are 5 ways in which companies can create innovation in shipping:


When it comes to shipping, many companies have room to improve their overall processes. From the transportation of products to excess man-power and inventory mismanagement, companies can significantly increase operational efficiency with just a few changes.Here are a few ways in which shippers are falling short:

  • Companies often unnecessarily move products around - both within warehouses and between them.
  • The inefficient use of man-power, particularly moving them around needlessly, can create significant inefficiencies within shipping.
  • High waiting times for things like packing or shipping.
  • Counting, moving, and organizing excess inventory - not to mention damaging it.
  • Overuse equipment and supplies.

Organizational Structure

Over time, organizational structures of departments such as logistics and/or supply chain can become stagnant. As trends, expectations, and needs change, businesses need to adapt their organizations to meet new realities. The initial process of this restructure would be to form an integrated team to assess the current status of the organizational structure. This team would interface with various departments outside of logistics and supply chain, such as finance and operations, in order to identify areas in which streamlining can occur. Partnering with an outside consulting firm can often be a helpful tool to optimize this process. Once inefficiencies and opportunities for streamlining are identified, a restructuring process can take place. This does not mean wholesale job cutting - the main goal is to re-organize in order to cut the fat and increase efficiency of shipping.


When it comes to innovation in shipping, as with every other aspect of business, technology remains the most crucial variable. Proper business intelligence and analytics is the holy grail for shipping. By leveraging a technological solution that provides deep insights through powerful business intelligence, shippers can take large volumes of data and interpret it in a meaningful way, translating it into new opportunities and effective business strategies. Some of the biggest benefits of business intelligence and analytics for shipping include:

  • Optimizing shipping network
  • Keeping carriers accountable
  • Managing transportation costs in real-time
  • Optimizing mode selection
  • Optimizing carrier selection
  • Leveraging actionable data

Warehouse Locations

It is clear that, in an environment is which greater pressure is being put on supply chains due, in part, to increased reliance on eCommerce for every-day shopping, a new strategy for optimizing warehouse locations is needed for most shippers. New warehouses should reduce both cost per package and time spent by customers waiting for their packages to arrive; it's necessary to plan, build, and optimize your shipping network and strengthen your competitive advantage.

  • Shipping Network Optimization
  • Most carriers have a list of strategic zip codes within their networks, while others only have a few locations to choose from. Shippers need to overlap these networks to find the perfect fit to meet business needs.
  • Site Selection
  • Optimal site selection for warehouses can be accomplished by leveraging industry benchmarks and modeling to calculate package distribution per warehouse, as well as total savings. Proper best-in-class technological solutions are required.
  • Warehousing Consolidation
  • Competitive pricing and the growing diversification of retail product lines has put supply chains under pressure to reduce cost and move inventory at a faster rate. By leveraging sophisticated auditing capabilities, shippers can quickly calculate costs and transit times based on daily rates - effectively eliminating unnecessary and costly warehouses within your network

Industry-Wide and Cross-Industry Data

In order to ship smarter, shippers across all industries need to leverage data from both within their own industries, as well as across all industries. A centralized dashboard that aggregates data across industries enables shippers to understand where they can best find cost-savings, as well as optimize their operations.

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