Virtually no aspect of business management has been left untouched by data analysis, and nowhere is that more apparent than in the shipping department. Shipping represents a major cost center for most companies, and by analyzing seemingly disparate factors, it’s possible to find connections and answers to questions that can improve efficiency while reducing costs.

Big data within the realm of shipping addresses a wide range of factors. While some you might expect, like transit times, fuel costs, and the like, other factors that influence shipping may not be so obvious. For example, weather conditions along shipping routes, traffic patterns, and even the strength of shipping packaging all influence how well a company manages the expenses of shipping. Without analyzing the data from all sources, your company may not make a connection between packaging and the percentage of delayed shipments, and this miss out on the potential to save money while improving customer satisfaction.

Therefore, it’s important for anyone involved in logistics, supply chain, and shipping to understand how big data can be used, and the insights that can be gained from it. Capturing the data from a shock sensor, GPS relay or other tools is one thing. Putting it to work is something else entirely.

Using Big Data to Your Advantage

The first step to making effective use of Big Data to improve your shipping program is to understand what Big Data actually means. Traditionally, data has referred to the information you gain by looking back; for instance, how much has the company spent on packaging and fuel, how long a package takes to reach its destination, etc. This data is undoubtedly useful, but it only tells you what has already happened, and allows you to determine how profitable (or not) your program has been.

Big Data, on the other hand, includes real time information gathered from sensors, tags, traffic information, weather reports. It’s time sensitive data that can be used for predictions, allowing your company to be nimbler and make necessary changes to both preserve and increase profitability. For instance, data analysis of traffic patterns over a short period may indicate unexpected bottlenecks along a particular route, allowing your logistics planners to device more efficient routes that avoid traffic and preserve delivery estimates.

Using Big Data is much more than simply collecting disparate pieces of data and attempting to extract insights. Effectively using this information means identifying the questions you want answered – why shipments to a particular region have a higher rate of damage than any other, for instance – and leveraging the data you have to paint a cohesive picture of the answer and predict the impact of potential solutions.

How Big Data is Being Used

With the understanding that Big Data is best applied to answering key questions about your shipping program, what are some of the most important questions to answer? Consider some of the most common applications within shipping logistics.

Carrier Performance Monitoring. The carriers you use to transport your products makes a significant difference in your company’s costs, efficiency, and customer satisfaction. By analyzing their performance in terms of costs, on-time deliveries, damage, and other factors, you can make better selections. For instance, if shock sensors indicate rough handling of your packages, you can explore in greater depth to determine whether the problem stems from inadequate packaging, the routes traveled, or something else entirely.

Weight Analysis. The weight of your packages influences everything from the rates you’re charged to shipping time, so applying weight analysis provides insights into how you can more effectively manage your shipments to maximize shipping times without increasing costs.

Shipping Costs. Understanding your costs per pound and costs per shipment need to be measured together to give you an accurate measure of where you’re actually spending money and what can be done to improve logistical decision making and keeps both costs in check.

These are just of the ways that big data analysis is changing the way companies are handling shipping. It all goes back to the adage that in order for something to be managed, it needs to be measured, and by implementing new data gathering tools and methods of analysis, it’s possible to measure more aspects of your shipping program and make better decisions.