Andy Meeson is VP of Logistics at Reveni. In this video he goes through the mistakes that come up most often in ecommerce logistics: why the cheapest rate doesn't always pay off, how many carriers are worth managing, and what needs to be settled before Black Friday.

Quality, speed and price. You only get to pick two

There's a line I hear constantly when I talk to brands.

"My rates are the cheapest on the market and, on top of that, they're the best."

Three variables compete against each other in logistics, quality, speed and price, and the reality is that you only get two. Improving one almost always means giving something up on another.

There's nothing wrong with choosing on price, and for plenty of brands it's the right call. The problem appears when the only thing anyone works out is how much comes off the rate, and not everything being left out in exchange.

Start with what the customer expects. They may be assuming their order arrives the next day, and if you use a service that takes four or five to save on transport, that saving can come back as negative reviews and more tickets for your support team.

That expectation is fairly well measured. According to Eurostat, the most common problem among European online shoppers is delivery running later than expected, ahead of orders that never arrive at all.

Before you compare rates, be clear on what matters to the business and on what the consumer expects from your brand.

The discount that looks like a saving

There's a mistake I see fairly often. The carrier offers a small reduction on the rate, the brand reads it as a saving, and meanwhile two or three years have gone by without anyone reviewing the market or putting the logistics out to tender.

The market changes in that time. New services appear, along with local operators, improvements to distribution networks and prices that didn't exist when the contract was signed.

If you're not reviewing the market every two years and sitting down with suppliers you don't know yet, you can fall behind without noticing. And that reduction you've just been offered is probably still above what you'd pay starting from scratch today.

Renegotiating goes beyond getting a cut on your current rate. It also means checking what alternatives exist and what the market is paying.

The cost that never makes it onto the spreadsheet

What you pay per shipment is only part of the real cost. The work that carrier generates every day costs money too.

Software can tell you whether the invoice matches the agreed rate, but that doesn't cover the time that goes into the daily management. Checking where each order is, handling returns, answering customers who get in touch because they've had no update or because the tracking isn't right.

All of that can end up taking several people dedicated to managing carriers and resolving issues.

So I'd suggest changing the question. Instead of looking at what it costs to send a parcel, look at what that carrier is solving for you. Whether they make your life easier, whether they improve your service, whether the invoices arrive correctly.

All of it has a cost, and almost nobody measures it. Part of it isn't even internal: according to Bringg, 62% of consumers blame the shop when a delivery goes wrong, not the carrier.

Some of that manual work is what Global Returns can automate, centralising the status of every return, setting the rules once and giving you visibility of where each unit is without logging into a different portal for every carrier.

More carriers doesn't mean more control

Working with several carriers looks like a way to spread risk, and it only works if you have the capacity to manage them properly. If you don't, control slips away very quickly.

Think of a brand operating in 150 countries with six or seven regional carriers. One of them may take most of the volume, and the rest end up getting little attention because nobody has time to run seven accounts at once.

That's where the problems start. You spend the day resolving incidents without a clear view of what is failing, or where.

My recommendation runs against the intuition. Fewer carriers and more focus.

• Separate domestic from international: one partner for the home market and a main provider for everything else.
• Separate your growth areas: if Germany is your big target for the year, manage that relationship on its own and use a different carrier for the rest of Europe.

The point is having enough providers to give a good service and still be able to manage them properly.

The four pillars before Black Friday

When a demand peak arrives, every small problem multiplies. And the peak is big: PwC forecast UK spending at £6.4bn last Black Friday, with 80% of it going online.

To keep everything under control ahead of a moment as big as Black Friday, there are four things you should have closed off beforehand:

An agreed volume forecast

Tell your carrier what volume you're expecting, with last year's data in hand. On a normal day they send you a van, and on Black Friday you'll have more parcels than fit in it. Give them enough notice and they send a truck or several vans, and you clear the warehouse every day instead of building a backlog.

An escalation process

Something always fails in a demand peak, so be clear on who to call inside and outside your company. If the warehouse manager sees the van hasn't come for collection, that isn't the moment to start working out who resolves it.

A backup plan

Your main carrier can fail on you and tell you from one day to the next that it isn't collecting that week. In a demand peak there's no improvising your way out of that, so you need a plan B ready to switch on.

Visibility

There's no point shipping orders if there are delays and you can't see them coming. These days your customer wants to know where their order is in real time, directly, without having to ask the carrier or the brand. That's what Smart Tracking does: automatic updates to the customer and alerts when something is delayed or stops moving.

Keeping the customer informed always matters, and it matters most when the order has to arrive before a particular date. If you know a Christmas present is running late, there's still something you can do. Find out once the customer has complained and there isn't.

And on international orders, Atlas calculates duties and taxes from the checkout, which is where you head off rejections over unexpected costs.

What separates the brand that gets through Black Friday from the one that falls behind

Black Friday is one of the most critical moments of the year. It's when you win a lot of new customers and when your regulars buy more. All those new people have to stay with you for the rest of the year.

Which is why logistics doesn't end when the parcel leaves the warehouse. What happens when something is delayed matters too.

If there's a major delay across the network and you're watching it on your dashboard, act before the customer complains. Call the carrier, or email your customers directly to let them know.

Communication can work in your favour, and everyone likes being kept informed. If there's an incident that's going to delay shipments, send an alert. You keep the customer informed and you get a good opportunity to show them something new.

When that communication works, there are fewer reasons for the customer to contact support, return the product or lose confidence in the brand.

What happens when you stop resolving incidents

When you're managing twenty carriers at once, the day goes on resolving incidents and you lose the overall view of the business. Step out of that and you get back the time to look at supplier performance, service level agreements and reporting. Logistics stops being an operational matter and becomes a strategic decision.

That's probably the biggest benefit and the one that gets measured least.

Carry on solving day-to-day problems and the years will go by without you understanding why you aren't growing. It may simply be that you never had the time to think about it.

How I'd organise ecommerce logistics from scratch

Before getting into it, I'd keep three things in mind:

1. I'd start by understanding the product and what the consumer expects, which is the order almost nobody follows. Everything else comes after that.
2. I'd outsource the operation to a logistics provider rather than build an internal structure that then has to be maintained.
3. I'd choose carriers according to the urgency each type of product demands, not according to an average rate that represents none of them.

The one thing I would set up from day one is the metrics. Visibility is what you cannot reconstruct afterwards, because without it from the start you end up piecing the history back together by hand at exactly the moment you need it.

In short

If you asked me what I'd change first, it wouldn't be the carrier. It would be the question you use to judge them.

I've spent years watching brands fight for every penny on the rate while that same supplier eats hours of their team's time every week. And nobody sees those hours, which is where the real value of good logistics sits.

So ask yourself how much time that carrier costs you, how many incidents it generates and how much support work it ends up creating. And above all, how much of that you'll still be paying for in November, when the volume multiplies.

The rate in the contract is only part of what logistics costs. Usually the small part.

Andy Meeson, VP of Logistics at Reveni

Frequently asked questions

How do I choose the right carrier for my ecommerce?

Three variables compete against each other in logistics, quality, speed and price, and you only get two. Before choosing, understand what matters to the business and what the consumer expects. A cheaper service that takes several days longer can end up generating a bigger cost in customer support and shopping experience.

How often should I renegotiate with my carriers?

Every two years at most. The market changes constantly and new providers, services and prices can appear that didn't exist when the contract was signed. A small reduction on your current rate doesn't necessarily mean you're getting the best price available.

How many carriers do I need?

Fewer than you think. Working with a lot of carriers only adds control if you have the capacity to manage them properly. If you don't, one tends to concentrate most of the volume while the rest get less attention. One option is to separate the domestic market from international and manage the regions where you particularly want to grow on their own.

What do I need to have sorted before Black Friday?

Four things: a volume forecast agreed with your carrier, a clear escalation process, a backup plan you can activate quickly, and real-time visibility of your shipments.

Is it worth outsourcing logistics?

It depends on the time and resources it's costing you to manage internally. If several people are dedicated to coordinating carriers and resolving incidents, that work is part of the real cost of logistics too. Outsourcing part of that management can free up time to analyse performance and make strategic decisions.

Where do I start if I'm building logistics from scratch?

Start by understanding the product and consumer expectations. From there you can decide which part of the operation to outsource, choose carriers according to the urgency each type of shipment requires, and set up a global view of your metrics from the beginning.