Tie Up With a Courier Company for eCommerce Shipping
Tying up with viable courier partners forms the foundation of any good e-commerce retail and wholesale business. Without a good shipping company that provides some kind of assurance of quality services, there are numerous areas of your business that can be impacted negatively. These are the factors to consider when selecting a courier service company. However, the process of tying up with a good shipping partner encompasses numerous different factors that go well beyond onboarding, from the selection of a logistics partner to monitoring their performance over a period to scope out possible areas of improvement.
List of Top 8 Key Things To Keep In Mind When Tie-Up with a Courier Company in India for eCommerce Shipping
In this article, we’ll take you through the major steps of creating a relationship with a shipping or courier company in India that allows you to maintain a profitable business.
1. Choosing a Courier Company and Negotiating Terms of Service
Selecting a courier partner is only the first step in a much longer process but it is by no means an easy one. We’ve created an exhaustive list of 15 different criteria to consider when choosing a logistics company. The first thing would be overall shipping costs but beyond that, there are also other specializations different online businesses may require. Like a jewelry company, dealing with expensive and fragile high-value items would likely require a shipping company like Sequel that is familiar with shipping that category of products.
Narrowing down those criteria is highly dependent on the industry each e-commerce business belongs to and the target audience they cater to. A company selling discount retail clothing would likely require less security than a company dealing with high-end jewelry. Where a jewelry store may require insurance, a clothing retailer would likely maintain fast delivery as a priority need. A cosmetics company, on the other hand, may require temperature-sensitive courier services for a large portion of their products.
After selecting your ideal shipping company based on a wide variety of criteria, negotiations are the next step. This process comes with its own challenges related to structuring an agreement with the concerned logistics partners that encompasses all required services from pickup and storage to delivery completion and receiving customer feedback. Alongside standard terms like specified time frame for delivery (at most 3-5 days), the specialized needs identified for your business are an important part of the framework of any SLA between you and your many courier partners.
2. Optimum Utilisation of Resources
How resources are being used is a huge element to consider during the process of negotiating, as well as after the terms have been agreed upon and while the service is being provided. It’s important to remember that tying up with any logistics company, even if it's one among many, is an ongoing and continuing process.
The base resources any courier company will have are a fleet of vehicles, equipment for loading and unloading shipments, and staff of anywhere between 5,000 to 500,000. However, a good company is one that continues to develop its existing resources and utilize new ones over time, especially state-of-the-art technologies.
Having a well-trained staff can often be more effective than having a large staff, and vehicles will require regular inspection. The establishment of Hubs & Dispatch centers in either remote or popular areas is also extremely useful. However, they can only effectively help if the network of centres is well-connected. Miscommunication can occur in any of the stages of shipment, i.e., first mile, middle mile, or last mile leading to delays in delivery and customers left unaware of the status of their order.
This can result in a higher percentage of RTO’s. The platform a shipping services provider uses for tracking can also impact customer experience, as delayed updates to the customer during the shipping process can severely increase their anxiety and the chances of them developing buyer’s remorse. A technologically advanced delivery mechanism can also aid in discovering the optimal routes for regular deliveries.
Another important aspect of resource utilization is ensuring that you have fully explored all the possible services a courier company can provide. There may be features offered on their tracking system that may not be the most obvious but could potentially boost delivery speed, inventory management, and customer satisfaction. These could include NDR management, return management, and vehicular upgrades, among many other things depending on the logistics company in question.
3. Defining the Regular Process for Each Order
To avoid any miscommunications, misunderstandings, and mix-ups that could lead to potential losses, it’s helpful to create a blueprint of the delivery system and day-to-day operations. This map would keep track of how a shipping agent is assigned to a particular order who signs for it and has the item released into their custody and when the item has to be picked up after an order has been placed.
It would also specify how the warehouse personnel would need to be trained to work with a new eCommerce shipping company. A common challenge faced by most e-commerce businesses is handling delivery exceptions. A delivery can fail for any number of reasons, for example, when the delivery address or contact information of the customer seems to be incorrect.
In such situations, it’s vital for your eCommerce courier services provider company in India to have a clear system in place for dealing with such exceptions, ideally in the form of a customer support team that can be reached by call, text, or email address. API-driven systems like ClickPost work efficiently to enable e-commerce businesses to handle exceptions within a short time frame of 4 hours.
This team would be responsible for receiving the correct information from customers and rescheduling the delivery for a later date. Ideally, the delivery should be completed within 36 hours from the originally scheduled delivery date as the chances of the order being canceled increase exponentially past that timeframe. An efficient system in place is the only way to ensure this process is carried out smoothly.
4. Cash-On-Delivery (COD) Reconciliation
The e-commerce sector has experienced a major boom over the past few years, which was pushed into overdrive by the need for remote services during the onset of the COVID-19 pandemic. Many consumers opt to pay for their purchases online, which adds to the speed and efficiency of delivery. However, numerous customers still have a preference for COD orders, which allow them to make the payment in cash after delivery has been completed.
While offering Cash-On-Delivery is a great way to reach a larger customer base, it can come with numerous challenges. One of the most frequent issues that occur when COD orders are placed is a delay in updating the amount of the completed payment with the bank of the e-commerce business. These delays can lead to mismatched accounts that need to be explained and corrected. How a courier company deals with this aspect of COD reconciliation and makes use of available technology to address the same can contribute to efficient maintenance of records and finances for an e-commerce enterprise.
Another important element of COD reconciliation is dealing with failed COD deliveries. These can occur for a variety of reasons, be it the status of the product at the time of delivery or cash constraints on the part of the consumer. In such cases, the reason for delivery failure needs to be noted and then a process must be in place to return the item in question.
These features can be included in the delivery mechanism. Additionally, terms should also be in place to hold the logistics or shipping company responsible for a failed Cash on delivery (COD) that occurred due to a product being damaged in transit.
Once you’ve finished all the above steps and found clarity with regards to all your determined priority considerations, the next step is confirming the shipping partner and submitting all necessary documentation to ensure you can integrate with that partner's platform smoothly and that all financial and corporate formalities are taken care of. The documentation in question can vary from partner to partner but there are a few common elements for all partners.
The standard documents that an e-commerce business must typically provide to a logistics company start with a business identification proof. This will be the form of a PAN card number for your business and a copy of the document in the question itself. Most courier partners will also require a copy of your GST certificate to understand what GST bracket your company falls under and the category of products dealt in.
The most important document to be maintained with any courier company is the SLA (Service Level Agreement). This document will encompass all the terms upon which the shipping partner must provide their service, the overall fee they can charge for the same, and where penalties must be imposed in case of low-quality performance or any breach of the SLA terms.
Following submission of identification and finance-related documents, and after signing the SLA, further paperwork is required to map out the delivery mechanisms that will be followed in certain locations. The format of these documents can differ from company to company.
6. Making Use of An Integration System
Tying up with a single shipping company is only one step in the background of an eCommerce business’s functionality. Medium and large e-tailers usually require multiple courier partners to ensure the complete fulfillment of daily orders. Once terms are agreed upon with a new shipping partner, onboarding with that company is a separate process that requires you to integrate with the delivery & tracking platform.
Each logistics company maintains its own system for e-commerce companies to track and fulfill orders. So for every set of orders of a given type or catering to a specified location, like companies that offer Same-Day-Delivery or hyperlocal deliveries, handled by a different courier partner, independent platforms will be used to fulfill those orders.
Not only does that result in varied communications to customers, it also requires a greater expenditure of resources by e-tailer to monitor orders on each of these platforms, follow-up with failed or delayed deliveries, and track performance and customer preference trends.
This is where courier integration systems can ease the burden on business owners. An efficient API-driven platform for eCommerce shipping or courier or logistics aggregation can give you a single reference point to view all of the logistics partners and the orders being handled by them, instead of having to visit each company’s respective website individually.
Integration platforms like ClickPost also provide options to purchase prepared shipping labels for each order, standardized messaging to keep customers update, a unified page for views orders and another for tracking them, opportunities to promote major events or sales, built-in processes for returns and NDR management, and an automated system to monitor performance and trends over specified time periods.
7. Performance Monitoring
It’s been mentioned a few times in this article that tying up with a courier company is an ongoing and continued process. While it may begin with selection, it doesn’t end when the partner is chosen and the agreements are signed. Each shipping company in India is providing you with a service that can have a major impact on your overall business performance.
It takes a well-oiled machine to ensure the immediate pickup after an order is placed, frequent updates on location, speedy delivery, safe transportation of the product, and finally placement of the product in the hands of a customer to their satisfaction.
Performance monitoring is an important function in the process of selecting a courier partner to work. Within 6 months, enough orders have been placed and delivered to determine what are the areas in which the concerned shipping company has aided you and helped to enhance business growth, and what are the areas that require improvement. You can also determine more clearly whether is company is a viable partner for your business.
For example, a courier company states that they are equipped to deliver to even the most remote locations. As the month's pass, you observe that one particular group of pin codes in a remote area seem to be placing a high volume of orders frequently. However, these orders begin reducing as the shipping company has frequently been responsible for delayed deliveries to that particular area due to a lack of resources or other obstacles, though other areas have no such problems.
Given that the highest number of orders originate from that location, due to which delivery to remote locations became a priority consideration for you, you may need to reevaluate this courier partner’s performance. It can help to determine if the carrier in question maintains his own fleet for delivery of shipments, which narrows down the scope of where the challenge arises. In case a carrier uses a channel of partners and agencies for transportation, the chances of inefficient delivery are higher.
Monitoring the performance of an eCommerce logistics services provider company also requires you to carefully monitor your business transactions, from the number of orders placed in any given location to customer feedback on every part of the logistics process. If a repeated complaint from customers is that the tracking system does not appear to be updated.
And they are unable to determine the status of their order due to which they are reducing their purchases. In such a case, more advanced tracking system must be implemented by the courier company. Keeping track of your own business model helps as well, especially in the case of SDD, NDD, and hyperlocal delivery.
Courier or Shipping API Integration and logistics platforms can aid immensely in the process of performance monitoring as all orders placed by all your eCommerce logistics companies are maintained, tracked, and analyzed comparatively over specified periods of time on a single platform. This information and other reports can then be made to help you determine what the areas that require improvement are.
8. Renegotiating SLA Terms Based on Areas of Improvement
The goal of monitoring any courier company performance as well as in specific target areas is to determine what are the challenges your business is facing in providing efficient and speedy deliveries. Once the challenges and pain points relating to the various logistics-related Key Performance Indicators are established, with the help of an integrated viewing platform and data analytics. The next thing that needs to be done is clearly understand how the shipping company can improve its performance.
Most SLAs are limited-period contracts that remain in effect for one year (12 months) after which the contract may be automatically renewed, or terminated. An alternate option is to amend the existing contract or draft a new one with the same partner. At the end of the contract period, you can approach the logistics services provider with areas of improvement and revise the contract to address the same.
In case there have been numerous failed deliveries due to product damage while in transit, you can reduce your losses by specifying an insurance clause for any failed deliveries due to damage caused during transportation.
Similarly, if there are certain aspects of the courier company performance that are improving KPIs, they can be zeroed in on to determine how to maintain that same level of efficiency and even promote the same. If a particular shipping or logistics partner has been especially good at (Next-Day-Delivery), you can also look into offering SDD (Same-Day-Delivery) and add the same as a necessitated service in the SLA, to be included in shipping rates and not as a hidden cost.
As said before, the process of tying up with a logistics firm is ongoing, so monitoring the performance of a courier company, noting the areas of improvement (both good and bad), and translating that into viable terms for SLA are tasks that need to be carried out over regular intervals. These can help you to optimize the main essence of service, which is sales & delivery. It keeps customers happy and your business growing and thriving in a competitive market.