Every ecommerce business is partnered with at least one courier company, if not more, depending on their monthly volume of orders. These courier companies handle the entirety of supply chain management operations for online businesses.
A courier company holds the responsibility of ensuring that customers receive their orders in a safe and timely manner. They also hold the responsibility for losses caused by an inefficient delivery experience. This is why the courier company you tie up with, and how you do so is of immense importance.
8 Steps for Tying Up With a Courier Company
Your ecommerce business needs to build a relationship with each courier company when choosing to tie up with a courier company in India.
This enables you to use their services long-term in such a manner that both you and your courier partner can grow together. There are numerous steps involved in the process of finding the right carrier to tie up. These steps will help your overall relationship with your courier partner last longer.
1. Choose a courier partner with the right resources
There are numerous different criteria that must be considered when selecting a courier partner. The resources and services they provide make it to the top of that list.
You can narrow down your list of ideal courier companies based on the resources available and at what rates.
These resources may include the methods of transportation they offer, the speed of delivery, and the technology they provide alongside physical distribution.
You’ll find that most customers prefer having express delivery options, like same-day or next-day delivery. To offer that, your carrier may need to offer multi-modal transportation. And no supply chain solutions would be complete without real-time tracking features.
2. Cautiously negotiate terms of service
Once you’ve narrowed down your prospective courier partners to a short list, you can weed out the unwanted ones during SLA (service level agreement) negotiations.
Each courier company typically has a standard agreement they provide. You can alter that agreement in accordance with your shipping strategy to get the widest range of services at the lowest price.
3. Clearly define the delivery mechanism
At the time when negotiations are being carried out, you can also clearly determine what the delivery process used by each courier company is.
Some delivery processes include added mechanisms like AI-driven route optimization and automated e-proof of delivery. These make the delivery experience more smooth. Knowledge of this is also vital to making improvements in the delivery process later.
4. Specify terms for COD Reconciliation
COD reconciliation is one area where many ecommerce businesses face challenges. When cash is collected by the courier company for COD orders, it can take a great deal of time and multiple follow-ups for your ecommerce business to receive that money back.
Specifying a specific time frame for COD reconciliation is necessary to avoid future conflicts and ensure your business always has capital.
5. Determine what documentation is needed
A courier company will typically ask for a set list of identification documents from your ecommerce business as well as other technical information.
This can include everything from your GST certificate to your shipping strategy. The most important document to be maintained by you and the courier company is the service level Agreement (SLA) which designates accountability between you and the courier partner.
6. Make use of a system for integration
Whether you’re tying up with a single courier company or multiple courier partners, connecting with their courier API integrations is absolutely essential. We can tie this up with the resources one can expect from a good carrier partner – the ability to integrate.
This integration is the system by which order tracking information can be passed and delivery mechanisms can be automated.
Especially in the case of multiple courier partners, a logistics intelligence platform or any integration system can help streamline this process. This saves your business time and resources in handling integrations internally.
7. Carefully monitor Courier Performance
Tying up with a logistics company in India is an ongoing process. Even after negotiations, documentation, and integrations are complete, the process further continues in the form of performance monitoring.
This means taking all the order-tracking data collected with a courier company over a specified period of time, i.e., quarterly or half yearly, and then analyzing it.
This enables you to determine which areas need improvements by your courier partner. Think about the long-term benefits that can be gained by tracking the frequency of delivery exceptions, like delayed deliveries, determining the most common causes for these exceptions and then being able to systematically eradicate them.
You would also be able to better position yourself for the next step in the somewhat cyclic process of tying up with a new courier company.
8. Renegotiate terms with improvement initiatives
Every period of performance monitoring must immediately be followed by a re-negotiation of the SLA terms. This allows you to create terms that focus on areas in need of improvement, like reducing stuck shipments, optimizing middle-mile delivery to avoid shipping delays and actively reducing RTO% in eCommerce.
Placing new limitations in the SLA allows you to re-engage with the courier partner and both work together to improve overall performance.
Conclusion
What we should understand most clearly from the above-listed 8 steps is that the process of tying up with a courier company is a complex one. It is a process that can often occur over an extended period of time. It does not end after a partner is selected.
After this terms must be negotiated and agreed upon. Following this the terms need to be followed, monitored, and regularly improved upon. For businesses to properly utilize the resources of a courier company, they must first be aware of those resources and how they can be used.
Over time, both your business and the courier company will together gain a greater understanding of how to improve the delivery process. With each improvement initiative successfully launched together, the bond tied between you and your carrier will grow stronger. Therein lies the secret to efficiently tying up with a courier company.
