Health systems across America are working toward total transportation management, where all freight spend is managed via a single, centralized system and data analytics drive new efficiencies and cost savings.
Traditional freight management programs seek to optimize spend across inbound, outbound and large freight—but that’s only part of the picture. To gain full visibility and centralized control over their entire freight spend, health systems should also include courier services, regional parcel carriers and mail consolidation. Here’s a closer look at each.
1. Courier services
Arguably the most complex transportation challenge that health systems have; courier services often go unmanaged. Even a well-designed courier structure can quickly become littered with new couriers that create duplication and waste. Also, many of their activities aren’t formally tracked or recorded, so there’s no way to manage them. That’s a problem, because courier services typically have one of the highest average costs per shipment. So how can you optimize the use of couriers and help ensure compliance?
Create a courier strategy that drives toward five efficiency and cost containment goals:
- Use data and analytics to gain new insights into your courier costs.
- Gain better visibility into the utilization and cost of your courier routes.
- Improve the efficiency of courier services and processes.
- Reduce costs through scale and optimization.
- Seek dedicated support from industry experts to identify, implement, and sustain opportunities for For example, can you convert STAT runs into less costly scheduled routes? Also, by improving route efficiency how many courier runs could you potentially eliminate? Root cause analysis may provide both answers.
2. Regional parcel carriers (RPCs)
A potentially cost-effective alternative to national carriers in some cases, RPCs typically deliver next day on a metro, single-state or multi-state level. They are best suited for high volume outbound shipments that are not time critical. A prime example is the growing need for home delivery, as the healthcare industry continues to shift from acute to alternate points of care.
Health system departments that regionally ship to residential addresses for next day delivery can potentially leverage RPCs to gain the service level required, but at a lower cost than national carriers. One example of the cost savings is that RPCs typically have low (if any) residential and delivery area surcharges. The savings can be significant, as accessorial surcharges continue to grow in size and complexity with national carriers.[1]
Seek out a freight management company that can help identify opportunities, manage multiple RPC relationships on your behalf, and provide a single point of contact for billing and any service-related issues.
3. Mail consolidation
This can be the lowest cost option for shipping to residential addresses. Deliveries are made via a collaboration between carriers that specialize in mail consolidation and the U.S. Postal Service. The mail consolidation carrier coordinates package pick-up, sorting and delivery to the local post office—which then makes the final delivery to the recipient.
Mail consolidation is best suited for non-time critical packages that weigh less than nine pounds and are shipped to residential addresses. Examples include maintenance medications and other pharmaceuticals, home health supplies and employee service gifts and awards.
As health systems continue to seek new ways to save by maximizing economies of scale, centralizing freight spend is a proven strategy. On your way to total transportation management, be sure to include the three modes of transportation often overlooked: courier services, regional parcel carriers and mail consolidation.
To learn more about total transportation management, visit cardinalhealth.com/optifreight.
[1]PARCELindustry.com. “Could Your Shipping Mix Be Improved by Adding Regional Carriers?” May-June 2019.