Address verification and geocoding improve shipping quotes and increase delivery accuracy

This local location intelligence platform aids in last-mile delivery, with a focus on parcel, LTL ("less than truckload"), and food/grocery freight types.

Location matters in shipping, and this company is revolutionizing the industry by challenging traditional pricing models. Traditional approaches rely solely on postal codes, overlooking essential address attributes that impact delivery times and costs. They’re creating a database of address-level location information that affects delivery accuracy.

This local Location Intelligence Platform provides critical insights into consignee addresses, including valid addresses, residential, commercial, and limited-access locations, as well as over 100 specific location types.

This information helps reduce shipping costs and ensure timely and accurate delivery. With this platform, the customer, shipper, carrier, and driver all win.

Today, nearly anything can be delivered to your home—your weekly groceries, packages from retailers, exercise equipment, home appliances, furniture, and even a pint of ice cream from your favorite creamery to make everything better after a long day.

The convenience factor is fantastic for a recipient, but put yourself in the driver’s shoes. All you have is an address entered into your GPS. Your navigation will guide you to the general location of the address, but then what? If it’s a private residence, it’s probably easy to figure out where exactly to deliver the item. Other locations, however, can spur some head-scratching.

Over 50% of the shipping cost for a product is attributed to the last mile, primarily due to the time required for delivery.

Why? Because you need to have a good address, spelled correctly and with all of its parts. Otherwise, you can’t know the exact location something is shipping to. Unfortunately, not everyone understands all the different parts of an address and why each part is important. The most commonly missed address parts include directional prefixes and suffixes, as well as secondary address data.

For example, an address might say "Peachtree St" but they meant "W Peachtree St." Or an address will be provided without secondary information, such as an apartment unit or office suite.

In these situations, drivers are often expected to just figure it out and magically make the delivery on time on the first try. Anyone who has ordered something online knows that doesn’t always happen.

Because of this, parcel delivery companies, such as FedEx and UPS, now charge an address correction fee of $13.40 to $21.00. However, LTL carriers don’t. Instead, they spend a lot of time correcting addresses or figuring out where to make the delivery at their own expense.

"Our goal is to provide delivery companies with information about each address so they can apply the correct service time for the location and make sure the product arrives on time," said the Founder & CEO. "We also provide the driver with all the information they need to make the delivery as fast as possible."

This starts with a clean address and a location type.

Is the address a private residence, an apartment, a shopping center, an office building, a distribution center, or something else? These location types are essential for shippers to get an accurate quote for their shipment.

For example, parcel shipment carriers charge more for a residential delivery than they do for a commercial one. LTL shipment carriers charge significantly more for deliveries to locations such as private residences, apartments, churches, schools, and self-storage facilities because these deliveries typically take more time.

There are over 50 different location types that incur an accessorial charge. However, these accessorial charges are only indicated on the quote if the shipper checks a certain box. Often, shippers don’t know what the location is or choose not to check the box, so the initial quote is lower. Either way, they end up with an invoice that’s higher than the original quote.

Knowing the location type can prevent a mismatch between quote and invoice, as well as give the driver more information about their destination, allowing them to prepare for any difficulties the location type might cause.

The first thing this last-mile delivery company does is clean and standardize addresses with Smarty’s US Address Verification.

Their CEO and Founder had used Smarty address validation at their previous startup company. He appreciated the speed and accuracy of the API, as well as the customer service, so it was an easy decision to implement Smarty address validation at this company as well.

"Smarty does a great job of correcting misspelled street names or telling us that a secondary is required," said the CEO. "The service will also tell you in the response what information was changed or if an address does not exist. Smarty’s address verification does a great job correcting the shippers’ address entries; we can almost always accept the changes and the geocode provided."

"I would love for all of our customers to use Smarty’s type-ahead address autocomplete," he said.

Until then, this last-mile company will continue relying on Smarty to cleanse and verify those addresses.

Next, they use Smarty’s US Rooftop Geocoding tool to get the latitude and longitude for each address. These coordinates are plotted into their geospatial database, where additional information is added.

Previously, this company had tried other location data providers like Google and MapQuest. When Smarty released its geocoding tool, this last-mile company tested it against Google’s.

"Google will geocode any address, even ones that don’t exist," said the Founder and CEO. "That doesn’t work for us. If the address does not exist, we need to tell the customer that the address does not exist."

Smarty identifies bad addresses so any last-mile company can ask the customer for a correction, and it only geocodes real addresses. In addition to those two advantages, they also recognized significant cost savings when switching from Google to an unlimited plan with Smarty.

“When we get a bad geocode and don’t know the exact location of the address, we return ‘Unknown’ to the customers," said their Founder. "Thanks to Smarty’s precise geocodes and standardized address format, we’ve gone from 25 percent ‘Unknown’ to 2 or 3 percent ‘Unknown.’ Smarty even does a great job geocoding secondary addresses."

"Implementation was very easy, but if we had a question, we were always able to get someone on the phone and get it resolved."

A good example of Smarty’s responsiveness involved an issue they discovered regarding addresses for the five boroughs in New York City.

These street addresses contain street numbers that include dashes.

Smarty was getting the geocodes wrong if the dash was missing in the API request. 'I had a conversation with the product team, and they started correcting these right away,' said the CEO. Smarty prides ourselves on being responsive to the needs of our customers to make our tools and products better for everyone.

In addition to reducing unknown addresses, this local last-mile delivery platform and their customers benefited from the speed of Smarty’s API. Their customers tend to all hit the API at the same time when doing nightly billing. Speed is everything to their customers, and thanks to Smarty’s cloud-based infrastructure and ability to spin up new servers instantly, this customer now has no issues dealing with this load.

Thanks to Smarty's address verification and geocoding, this customer and many more like them have accurate addresses to build the foundation of their location intelligence platform for shippers, carriers, and drivers.