We knew this was going to be an abnormally busy holiday season, but no one could predict the true extent. Some experts predicted as much as three times the normal level of e-commerce sales. However, the reality has been more dramatic than anyone could’ve guessed. According to the Associated Press, e-commerce will bring in over 189 billion dollars this season, the equivalent of combining two full holiday buying seasons together. Shipping companies like FedEx and UPS are doing their best to keep up with surging demand. With a projected 79 million parcels passing through daily, major shippers are adding nearly 200,000 seasonal positions to stay afloat.
It is a challenging and unprecedented shipping season, but the current trend shows no signs of stopping once 2020 is over. Logistics professionals all over the industry will have to develop new workflows in order to meet the business world’s changing needs head-on. Today we’re going to discuss strategies to help you avoid being swallowed whole by the holiday shipping crunch.
An Unprecedented Shipping Season
What’s made this season such a record-breaking year? First, the elephant in the room: COVID-19.
The Coronavirus pandemic has had a profound effect on every aspect of our society, from the way we work to the way we socialize. With so many people stuck at home due to mandatory social distancing measures, online shopping has risen dramatically. According to TechCrunch, e-commerce is up almost 45% from the past year, driven in great part by the online grocery market.
Over the past eight months, we’ve also seen a more widespread level of e-commerce adoption. Online shopping has historically been anchored to the shopping habits of Millennials and Generation Z. However, now Baby Boomers are starting to rely on e-commerce for their necessary purchases. Factors including the ongoing pandemic, a surging stock market, and humanity’s need to celebrate some part of 2020 have all converged to form what’s being called a “Shippageddon.” As a result of all these factors converging, major retailers and fulfillment services experience horrendously long shipping delays.
The fact that a record number of Americans are opting to take the $300 a week federal supplement has only exacerbated the problem. Employers all over —including the big-name shipping companies— are having trouble finding and retaining talent in the age of COVID. Even after COVID finally dissipates, and the world gets back to something resembling “normal,” world politics like Brexit, which adds a whole new set of complexities to the supply chain going forward.
Strategies for Easing Future Shipping Crunches
It may be too late to do anything more this year; the clock is already running out. But how do we anticipate and plan for a future Shippageddon?
“A stitch in time saves nine!” goes the old adage. Never has that saying been more relevant. The single best strategy for dealing with a busy shopping season filled with backlogged shipping is also the simplest: plan ahead. It may be too late to do that for the 2020 holiday season, given that we are t-minus two weeks until Christmas, but for future shipping crises, doing your shopping early and figuring out shipping methods in advance is crucial.
Planning ahead involves having a firm grasp on your holiday shopping needs well in advance of major dates. This year, many online retailers extended Black Friday deals on their websites for an entire week so that consumers would have more time to get what they needed without cramming together inside a store. The most critical part of planning ahead is shipping early.
This year, the USPS and UPS advise customers to ship ground packages no later than December 15th. Through FedEx and UPS, December 21st is the last day for their three-day shipping options, but with a caveat: they won’t guarantee delivery. The truth is that consumers shipping that late in the season should expect orders to be backdated significantly.
Keep tabs on your inventory
There’s a saying, “He who has the inventory closes the sale.” Unfortunately, many retailers are learning that the hard way this holiday season. By treating their stocking procedures like business a usual, they’ve found themselves caught off guard and losing revenue. It might cost more upfront, but clients who invest in extra stock will reap the benefits.
Know Carrier Policies
Shipping methods and schedules are important, but it’s also helpful to understand each carrier’s pricing scheme and customer interface. It can make the entire process go much more smoothly.
UPS offers My Choice® which allows customers to track their packages, reroute package delivery, and change delivery dates
FedEx offers Delivery Manager® which helps customers track and manage deliveries and hold packages for a specific pickup date
Shippers and customers should also be aware of some key rates that are involved with each of the three main shipping companies.
UPS charges a $0.24 increase for peak season shipping
USPS rates increase by $0.25 for 1st class shipping and $0.40 for priority mail
FedEx SmartPost service charges a $1.00 surcharge
Companies who use a third party logistics provider such as Symbia Logistics may be able to avoid costly surcharges which can add up on bulk orders.
In-store fulfillment when possible
One of the best ways for customers and e-commerce merchants to avoid facing a Shippageddon is through BOPIS, which means “Buy Online, Pickup in Store.” This method allows customers to shop from the merchant’s e-commerce site, but instead of the item being shipped directly to them, a brick and mortar retail location will handle fulfillment duties. This cuts out a huge portion of the logistical considerations that go into online shopping, getting products into consumers’ hands more quickly.
Remember —be kind to your courier
There’s another adage that comes to mind: you catch more flies with honey. Everyone is feeling the crunch this year. Although supply chains are complex constructs with many intermediate parties involved, most people only have contact with the delivery person. With the breakneck pace this holiday season, kindness is crucial. Remember, it costs nothing to be kind, and meeting your courier with a positive attitude keeps the process running smoothly.
An Eye Toward the Future
The 2020 holiday season is like no other holiday season in history. An unprecedented confluence of factors has created shipping delays and long lead times, but it’s also helped e-commerce mature and gain universal adoption among all consumer demographics. The increased proliferation of online shopping means a busy future for the fulfillment ecosystem. Shippageddons may very well become commonplace going forward. Awareness and preparation are the keys to preventing future shipping disasters.
For more information about third party logistics and more great content about shipping, logistics, and fulfillment, please visit Symbia online.