Shipium by the numbers: 2023 recap
Shipium had an incredible year because our customers had an incredible year. We measure our success based on the achievements and happiness of our customers, first and foremost.
By that measure, the platform performed better than anyone could have hoped. Now that it’s January 2024, here is a breakdown of some interesting numbers, factoids, and stories about Shipium in 2023.
Cost Savings: 10%-12% Avg Spend Reduction
Customers conduct joint QBRs (quarterly business reviews) with our customer success team to get a sense of our performance, both from a technical perspective but also a business outcomes perspective.
Reducing costs is always a priority, so we regularly review that metric with customers. The three key capabilities that Shipium uniquely offers that help drive down costs are:
- Intelligent downgrades — pick a cheaper shipping method that will still hit a desired delivery date based on our unique dynamic time-in-transit modeling.
- Rapid ability to add (and remove) carriers — most customers were stuck with their carrier mix pre-Shipium, but we helped them expand to 4-6 carriers on average, typically within a single quarter.
- Maximum configurability — our features allow customers to quickly adjust when operational changes need to happen, like carrier volume limits for example, that typically would take months to change with legacy tech, resulting in poor optimization.
Our methodology to measure cost reduction is simple: Take total spend for a given period, then re-run all those selections through our simulated selection process using the customer’s operational conditions pre-Shipium, such as only pre-Shipium carriers, no desired delivery date constraints, or any business rules that previously couldn’t be set.
When we do that process, the average parcel spend reduction per customer per QBR has been a little over 12%.
That’s an insanely high number that many people don’t think is real. But it’s real. To help lend credibility, late last year Nucleus Research commissioned an objective ROI analysis on behalf of their customers who were inquiring about the validity. We provided Nucleus our methodology and anonymized data, then Nucleus researchers interviewed several of our customers to do their own analysis and verify results. Their conclusion was around 10%. You can read that report here.
CPP: Increased competition
Back around Black Friday / Cyber Monday we published some insights around how much volume Nationals (USPS, FedEx, UPS, DHL) seemed to have taken back from Regional carriers in 2023. Our hypothesis was because of increased pricing competition in the shipping market as a whole due to supply and demand dynamics coming out of the pandemic, leading to carriers across the board being more competitive on pricing, which is a good thing for shippers.
When we look at average CPP across all customers and shipments in 2023, we see a big gap closed by Nationals around Q2, which held steady throughout summer with Nationals beginning to drive down prices even further in Q3 before coming back to even during peak season.
While price is always a motivating factor for shippers to pick carriers, our sense for 2024 is that price will continue to be competitive and potentially non-differentiating between carriers, and a big part of 2024 will be a focus on performance, such as delivery speed and on-time-delivery (OTD). We consider this a good thing because it will push innovation in the space while making the experience for consumers better.
OTD: 99.1% during BFCM, strong performance leading up to Christmas
Speaking of on-time-delivery, our influence on OTD was nothing short of incredible. A reminder of how to think about OTD through a Shipium lens:
- For a particular shipment, customers have the option to pass a Desired Delivery Date where they ask Shipium to pick a carrier that will deliver on-or-before that date. Customers can pass a specific date or an SLA/BDOT range.
- The platform then looks at carrier probabilities, not their published SLAs, to understand who will hit that date. Our machine learning algorithms know that an economy service method will deliver from Reno to San Francisco in 2 days 96% of the time, for example.
- Calculating our influence on OTD is taking all shipments where the customer passed in a Desired Delivery Date, and then we measure if the delivery was made on-or-before.
OTD across all of 2023 was 95.9%, which is above our 95% target.
Meanwhile for shipments originating during Black Friday week through Christmas (what we are considering “peak”), our OTD was 99.1%. We are really proud of that result.
Online purchases leading up to the Christmas holiday of December 25th is also an important period during peak season. In the weeks leading up to the holiday, for shipments with a Desired Delivery Date of December 25th, we maintained a 97% OTD up through the 20th, and allowed us to continue to optimize with our intelligent downgrade capability.
Technical Performance: Zero Unplanned Downtime
The platform is built with enterprise-grade performance in mind with regards to availability, reliability, and speed. There is no way we could service the size and scale of our customers without this being the central design principle of the platform.
We are thrilled with how the platform performed in 2023. There was zero unplanned downtime, meaning no negative impact on customer operations. We generally avoid any customer-facing planned downtimes (migrations, integrations, etc.) and this of course continues during the holidays!
API response time being enterprise-grade is essential, too. For this metric, we saw zero variation among our API performance during peak season. Performance continues to be in line with the technical expectations and SLAs required of some of the largest retailers in the world.
“Sure those are great results, but it takes years to integrate, we’ll talk to you in 2026.”
This is a typical response by operators who have earned their scar tissue in a past life. Every experienced operator has had a failed integration and tends to be justifiably skeptical of Shipium.
The proof of our ability to work fast and meet customer demands is mounting, however.
We are now up to 288 installations of Shipium across every origin type imaginable—warehouses, physical stores for ship-from-store, ecommerce stores for EDDs, drop shippers, 3PLs, 4PLs, you name it. We scaled those integrations this year.
Meanwhile, our pace of integrating carriers has been rapid. We are now at domestic parity with any shipping tech out there, as shown by over 99.5% of all shipments in the country are delivered by carriers we support. Our pre-integrated carrier network, which is the network carriers wish you used, is up to 31 carriers and 104 service methods. The pace will continue in 2024 with our dedicated team.
Lastly, geographies are starting to scale out, too. We have bigger geographical expansion announcements planned for 2024, but in 2023 we expanded operations to support shipping in Canada and Mexico.
We added a lot of new customers in 2023, basically doubling our customer base and our shipping volume.
Three customers published case studies about their happiness, which you can view here. More stories of customer success are on the way for 2024.
In an industry with little innovation for several decades, our customers are supremely happy with our partnership. So far zero customers have left, and most have expanded their usage. It’s a testament to our core principle, which is focusing on the success of our customers first and foremost.
You could be added to that list in 2024, too.
Technical integrations take 2 months on average when the process jointly begins through to go-live, with payback periods averaging 1 month. ROI is always at least 10x annually. In a risky environment, evidence is mounting that it’s risky not to take a look at Shipium before your next peak season.
One example is Duluth Trading Co. They met us at NRF last January 2023, and were live in September.
If you think this could be you in 2024, reach out to us to start the conversation or meet at NRF. We’d love to hear from you.