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Managed Parcel Solutions vs Transportation Management: The Divergence Explained

Managed Parcel Solutions vs Transportation Management: The Divergence Explained

Managed Parcel Solutions vs Transportation Management: The Divergence Explained

In the intricate realm of logistics, two terms often create confusion: Managed Parcel Solutions (MPS) and Transportation Management (TM). Though they might sound similar, their roles, functions, and impacts on a business vary significantly. This article dives deep into MPS and TM, highlighting their differences and explaining how to leverage them to streamline your shipping operations.

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Unraveling Managed Parcel Solutions (MPS)

Managed Parcel Solutions (MPS) is a service where businesses delegate their parcel shipping operations to an industry expert or a third-party logistics provider (3PL). These experts leverage their comprehensive knowledge about the industry, carrier networks, and shipping regulations to provide efficient, cost-effective parcel shipping solutions.

Key Functions of MPS

MPS encompasses a host of services that collectively aim to optimize your parcel shipping operations. 

Here’s an overview of some primary functions:

  1. Carrier Procurement: MPS providers possess extensive connections with numerous reliable carriers. This enables them to broker the best rates and pin them down on your behalf for your shipments.
  2. Parcel Shipping Management: An MPS provider takes over your parcel shipping operations, managing everything from packaging and labeling to scheduling pickups and tracking deliveries.
  3. Compliance Management: The provider ensures all your shipments comply with the carrier’s rules and regulations, mitigating risks related to non-compliance.
  4. Claims Management: If a shipment gets lost, delayed, or damaged, the MPS provider will handle the claim process on your behalf.
  5. Data Analysis and Reporting: MPS providers generate detailed reports about your shipping operations, which can provide valuable insights for strategic decision-making.

Decoding Transportation Management (TM)

Transportation Management (TM), or 4PL, on the other hand, is a broader concept that encompasses the management of all transportation operations within a supply chain. It includes everything from planning and executing shipments to monitoring and controlling transportation activities.

Key Functions of TM

Depending on the intricacy of your supply chain, the role of a TM can be vast for your ecommerce business. 

Let’s take a look at some of the roles they can play in your logistic needs:

  1. Transportation Planning: TM involves devising optimal transportation strategies, considering factors like transportation modes, routes, and carrier selection.
  2. Shipment Execution: Once the planning is complete, TM ensures seamless execution of shipments, including scheduling pickups, handling documentation, and tracking deliveries.
  3. Carrier Management: TM solutions help businesses manage their relationships with carriers, including contract negotiation, performance evaluation, and compliance monitoring.
  4. Freight Audit and Payment: TM includes auditing freight bills for accuracy, resolving discrepancies, and ensuring timely payments to carriers.
  5. Analysis and Reports: Through the collection of data, TM has the ability to provide insight that can help identify any weak areas that can be improved within your shipping and transportation operations. 

MPS vs TM: Spotting the Differences

Now that we’ve unraveled MPS and TM, let’s dive into their differences:

  1. Scope: While MPS focuses exclusively on managing parcel shipments, TM offers a more comprehensive approach, managing all types of shipments – parcels, LTL, FTL, air, ocean, and more.
  2. Control: In an MPS arrangement, the provider takes complete control of your parcel shipping operations. With TM, you can choose to retain control over certain aspects of your transportation operations.
  3. Integration: TM systems can be integrated with other business systems like ERP or WMS, enabling seamless data flow and better decision-making. MPS providers may offer similar integrations, but their scope is generally limited to parcel shipping operations.
  4. Cost: TM tends to be a more pricey option due to its significant upfront investment and recurring costs for continued maintenance and updates. MPS, being a service, generally involves a fee based on the volume of shipments or the savings achieved.
Get connected to the best shipping solutions, rates and software for your business. Schedule your consultation today! We’re experts at cost reduction and logistics!

MPS and TM: Complementary, not Contradictory

Despite their differences, MPS and TM are not mutually exclusive. The implementation of both can be quite complementary to each other. Businesses can leverage MPS to optimize their parcel shipping operations and TM for managing other types of shipments.

Moreover, many TM solutions now offer parcel shipping capabilities, essentially combining the benefits of MPS and TM in a single solution. This blended approach can provide businesses with the best of both worlds – the efficiency and cost savings of MPS and the comprehensive control and visibility of TM.

Making the Right Choice: MPS vs TM

Choosing between MPS and TM largely depends on your business needs and the complexities of your supply chain. If your business primarily involves parcel shipments and you prefer to outsource your shipping operations, MPS could be a good fit.

On the other hand, if you manage a variety of shipment types, are shipping globally, and prefer to maintain control over your transportation operations, a TM solution might be a better choice.

Remember, regardless of whether you choose a managed parcel solution, a transportation management model, or a combination of both, the goal is to simplify your shipping operations, make them more cost-efficient, and improve service levels.  

The Role of Parcel Consulting

As you navigate the complexities of MPS and TM, a parcel consultant can be an invaluable resource. Parcel Consulting connects product-based businesses with the best shipping rates and technology. Their shipping experts have worked with nearly every local, regional, national, and international carrier, giving them unmatched industry expertise, knowledge, and connections.

Parcel Consulting offers free advice and shipping rate reviews with no obligation. They believe in showing what they can do and letting you decide if it works for your company. Whether you’re considering MPS or TM, a parcel consultant can guide you in the right direction, ensuring you get the best possible solution for your shipping needs.

Wrapping Up

Managed Parcel Solutions and Transportation Management both play pivotal roles in streamlining logistics and enhancing operational efficiencies. Understanding the nuances of each can help businesses make informed decisions, ultimately leading to significant cost savings and improved customer satisfaction. Whether you choose MPS, TM, or a blend of both, always remember that the ultimate goal is to optimize your shipping operations, reduce costs, and deliver unparalleled service to your customers.

In addition, don’t forget the value that a service like Parcel Consulting can bring to your logistics operations. They can provide you with the insights, recommendations, and connections you need to make the most of your shipping operations. With their support, you can navigate the complexities of MPS and TM with confidence and ease.

Get connected to the best shipping solutions, rates and software for your business. Schedule your consultation today! We’re experts at cost reduction and logistics!

Parcel Consulting Can Help!

At Parcel Consulting, we help any business see how their rates and parcel strategy stacks up against their competition and the largest retailers in the world. 

Our shipping experts and innovative analysis process allow your business to know they have the best shipping rates possible and they are utilizing the most effective strategies to get their packages delivered to each and every customer. 

Contact us today at 833-727-2351 or schedule a shipping consultation online here.

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