Role of Big data analytics in transformation of shipping industry2 min read

Big Data promises to bring in some major and welcome changes in the shipping industry.  The shipping industry has several players who are interlinked to move packages from one place to another. Unless there is absolute coordination with these players, there will be confusion and inefficiency. Human intervention is abundant in logistics. So, errors are unavoidable and they can become costly at times. Big Data can greatly improve efficiency and transform the shipping industry.

Keeping track of packages

Big data analytics can provide proactive warnings if a package looks like it is going to be lost via transit. It can raise red flags based on patterns from the past. If there is a delay foreseen, Data can warn you. You can proactively reach the customer, reroute or send another package to handle the situation. The system works similar to real-time shipment tracking softwares like LateShipment’s Pulse.

Shipping Insurance

There are several packages that are insured before being checked in with the UPS/FedEx pick up employees. Big Data Analytics can help decide when to insure and when it’s least risky to let go of insurance costs.

Price Optimization

Shipping carriers do not have fixed prices. They operate on floating prices based on real-time parameters. Data analytics can help organizations maintain their shipping budgets within limits based on these fluctuations. For example, seasonal surges and dips are very pronounced in shipping carrier rates. Holiday seasons are expensive shipping periods since people tend to shop and get packages to every nook and corner of the world. So, if you run an online store that ships products to customers, Big Data can help you strategize for the rush hour and lean periods alike. Big Data factors everything that has something to do with shipping prices: fuel prices, traffic patterns, weather predictions etc. Sifting through previous year’s data, Big Data can point to when shipping carriers have better price offers. So, you can market your free shipping deals around that time and work with that idea.  And if you want to study what works where: fixed shipping rates, free shipping and actual shipping rates, you can learn patterns and predictions from Big Data Analytics.

Price negotiations with shipping carriers

Small organizations can use Big Data to have an objective discussion with shipping carriers. Shippers and carriers can negotiate on a fair price based on data and hard numbers.  Data on the freight cost can be matched with order data. Decisions driven in this manner are based on accurate numbers, not just ballpark figures.

Hence, ecommerce companies who often liaise with shipping carriers will experience full transparency in shipping prices, which will help them negotiate better rates and handle overall shipping technicalities in a more efficient manner.


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