Exposed: The Truth Behind On-time Delivery

July 23rd, 2023 Matt Murdock Leave a comment

How is the world adapting to the use of technology to get its order delivered? The use of online platforms to get orders delivered has seen a drastic rise. As per reports from McKinsey, the global market has doubled its share following the pandemic. Showcasing a growth of over 8%; user-friendly apps, and enhanced tracking experience, coupled with consumer expectations have made the online buying experience much smoother.

In an interview with Wall Street Journal, DoorDash COO explained, “The last mile delivery is a cost-intensive business that is low-margin and scale driven.” Businesses should give proper thought to investing in a delivery management system to ensure seamless operations. So whether customers place orders from an eCommerce platform or their favorite food ordering app, faster delivery is what all customers want.

How are businesses ensuring orders get delivered on time?

Major players have turned towards technology to handle their deliveries. By automating their delivery management system, businesses have ensured to meet customer demands. One of the key aspects that help with on-time delivery is Auto Allocation. This helps businesses meet customer expectations of 10-minute, 30-minute, same-day, and next-day delivery.

How is Auto Allocation helping enterprises with faster delivery?

Auto Allocation or Auto Assignment is the process of handing orders directly to a delivery associate (it can be its own fleet of 3PR Carriers). If the business uses its own fleet as well as carriers, the delivery management system allows it to set a priority to whom the orders are to be assigned.

Time Window

This is the main pillar for consideration when auto-assignment is used for order assignment. Different types of the time window to be considered during order assignment includes-

Order Pick-Up Time Window: This functionality gets the order assigned to the driver only if the driver can pick up the delivery within the set period. Else, the order will be assigned to another driver.

Order Delivery Time Window: This functionality calculates if the delivery associate can get the order delivered within the set time frame, or else it will look for other drivers.

Order Preparation Time: Want to enhance the ETA calculations of your orders? Order preparation time can be added to ensure drivers can be assigned only after a set period to ensure the order is delivered hot and fresh.

Future Service Time Window: This functionality is ideal for the quick commerce industry wherein it allows the assignment of drivers in a future service time window. For example, if an order is created at 10:00 AM, drivers can be assigned for a later delivery duration window of 1:00 PM- 2:00 PM.

Minimize Time and Distance: This allows the delivery management system to assign drivers to fulfill orders at the earliest (within the service time window) to be assigned first.

Fleet Sharing During Peak Hours: To enhance fleet efficiency, the parent branch can allow fleet sharing with its child branches. What this ensures is that if one of the branches faces higher order requests, carriers from other branches can help meet on-time delivery requirements.

Defining Service Radius: A service territory radius can be set up (in Kms) to assign drivers for specific deliveries. This allows the delivery management system to assign drivers mapped to the defined service area.

Empowering Drivers To Accept/ Reject Orders

When using a delivery management system, giving the drivers the ability to accept and reject orders is a must. This will not enforce drivers to carry out deliveries which they are not keen to carry out.

Accept/ Reject Order Timeout: This enables the time in seconds the delivery associate gets to accept or reject the order. Businesses can set the value of 15 seconds, 30 seconds, 45 seconds, and 60 seconds to accept or reject the order.

Maximum Attempts Allowed: This helps define the maximum number of times a delivery associate can reject or take no action on an order. Once the number of attempts is exhausted, the orders must then be manually assigned to get the item delivered.

Broadcasting orders: If orders are not assigned to delivery associates on the first attempt, the orders can be broadcasted to multiple delivery associates. The delivery associates targeted will be the ones that can get the order delivered within the set timeframe.

Intransit Delivery Associates: This allows the delivery management system to assign orders to delivery associates who have already been assigned orders. The orders would be assigned to drivers following the same delivery route. This additionally ensures efficient fleet management.

Skill sets: One of the most overlooked concepts during the auto-assignment is the ability of the driver to fulfill the delivery with maximum customer experience. For example, when you order an ice cream, on delivery, it should still be in the solid state. No one wants melted ice cream delivered. To avoid this, skill sets come into play. Drivers that have specialized carrier bags/ specialized compartments in the vehicle for delivery must be considered.

Carrier Integration

For those not having their own fleet or using a hybrid fleet, carrier integration can be the best solution to meet faster and more efficient delivery. The carriers too can be assigned based on service time window, and ability to get the delivery done in the fastest and most cost-effective way. Multiple carriers can be integrated and the best carrier based on priority, cost-efficiency, travel distance, and skill sets can be assigned to ensure faster delivery.

Driver Assignment Based on Behavior Patterns

This functionality helps the delivery associate to define parameters to reward or penalize delivery associates based on their driving patterns. For example, if a delivery associate or carrier is assigned orders multiple times. If they keep rejecting, the delivery associate or carrier can be deprioritized. Additionally, the delivery associate/ carrier can also be removed from the auto-assignment list to enhance fleet efficiency. Additionally, if drivers get orders delivered on-time and handle multiple deliveries, they can be incentivized accordingly. The whole experience can be gamified and displayed in the leaderboard on the driver app.

Enhancing Customer Experience

A delivery management system additionally helps with real-time tracking URLs, alerts and notifications, and payments (cash on delivery, payment gateways on delivery). This keeps the customer updated on the order status. Branding profiles can also be sent out via tracking links that showcase discounts or offers. So along with faster delivery, you can be assured to enhance customer experience with an emotional recall/connection.

All these factors are considered when a delivery management system undertakes order auto allocation. This complex operation can be easily handled by technology, reducing manual intervention and errors, and leading to faster deliveries. The last-mile delivery can be daunting and the only way to avoid discrepancies is by automating and digitizing the delivery operations. Empower your deliveries by switching to LogiNext’s delivery management system. Enjoy the benefits of Auto Allocation, Route Planning and Optimization, Carrier Integration, etc., to ensure faster deliveries.

Summary

This article focuses on the importance of investing in a delivery management system for faster delivery. It breaks down the auto order allocation working in logistics operations and how it eventually helps enhance customer experience.

Author Bio

Matt Murdock works for a leading SAAS-based platform called LogiNext Solutions. Where he helps businesses optimize their logistics operations and improve their delivery performance. With a passion for innovation and technology, Matt is always looking for new ways to streamline logistics processes and enhance customer experiences. In his free time, he enjoys writing blogs based on his experience in the logistics industry. Happy reading!

Archives, Education, Global Logistics, Global Trade Daily

SMALL IS BEAUTIFUL: How Micro-Fulfillment is Solving a Macro Delivery Problem

January 4th, 2023 Bill Catania Leave a comment

For retailers trying to attract and retain customers in an increasingly crowded environment, order fulfillment and delivery is now a key differentiator. Just a few years ago, two-day shipping was a nice customer perk. Now, it’s table stakes in many sectors.

According to Maergo’s “The State of Shipping Report 2022: Why Faster Shipping Matters,” most online customers (62%) expect their orders’ delivery window to be three days or fewer. Even more telling: 56% of abandoned carts can be attributed to delivery concerns.

While retail giants such as Amazon and Walmart can meet these shrinking delivery windows with the help of extensive investments in shipping infrastructure, smaller competitors must get a little more creative.

Many of these smaller companies have turned to micro-fulfillment to solve some of their biggest delivery challenges. Micro fulfillment provides a much more cost-effective way to achieve blazing-fast delivery times by using space in existing retail locations or small-footprint, last-mile distribution centers. Because these options use less space, businesses can avoid the huge real estate costs associated with traditional warehouses.

These micro fulfillment centers (MFCs) also use automation—either manual (like robotic pickers) or digital (robust warehouse management software)—to improve efficiency and speed.

Here’s how micro-fulfillment can solve last-mile delivery challenges, and how to make the most of a micro-fulfillment operation.

THE PARCEL DELIVERY PROBLEM

The Pitney Bowes Parcel Shipping Index from 2021 revealed that global parcel volume hit more than 131 billion in 2020—that’s 4,160 parcels shipped every second! It also predicted that shipping volume could reach as high as 303 billion by 2026. In today’s challenged supply chain environment, that big an increase could cause a lot more strain if shippers and retailers don’t optimize their operations now.

The biggest challenge to overcome? Visibility.

Shippers and retailers both often struggle to pinpoint a delivery’s location along its journey to the consumer. They also have trouble spotting issues and potential exceptions (delivery delays) to proactively prevent them from affecting customers.

This challenge comes into sharp focus if you’re shipping from a couple of centralized warehouses. This fulfillment model places your inventory farther from your end customers—warehouses need lots of space, and that space is usually not in the center of your delivery radius.

With farther to travel, each order must go through a series of stops, and even vehicle and facility changes along the route (depending on the distance to the customer). Longer distances also introduce many more opportunities for errors to crop up. If weather, traffic or even a flat tire delay a delivery vehicle, you may miss the delivery window and lose that customer. Zendesk’s CX Trends 2022 report showed that 61% of customers will switch to a competitor after just one bad customer service experience.

MFCs can help solve these challenges on a variety of fronts.

IMPROVE SPEED AND INVENTORY MANAGEMENT WITH MICRO FULFILLMENT

Visibility doesn’t just apply to tracking an order from warehouse to customer. It’s also an important consideration in an MFC, providing valuable sales volume and inventory data over time to allow more informed business decisions.

For example, having better control of order data can show demand trends to help keep faster-selling items in stock. This also helps with the workflow in the fulfillment center, as these higher-demand items can get priority placement so workers can grab them quickly.

Better visibility makes it easier to keep in-store shelves stocked, too—and replenishing stock from an MFC is faster than waiting for it to come from a central warehouse.

But the benefits of micro fulfillment don’t end with visibility. Because of the automation usually included in this model, picking and packing takes much less time and frees up your workforce to focus on other customer service tasks.

And with their smaller footprint (often fitting in the back of an existing retail location), MFCs keep inventory close to end customers. This significantly cuts down on delivery times, and means orders can often arrive in hours, rather than days.

BETTER SUPPLY CHAIN FLEXIBILITY, SCALABILITY AND COSTS

CB Insights reports that micro fulfillment can reduce costs associated with an order by 75%, compared to manual picking in a traditional warehouse. That adds up to huge savings over a year’s worth of orders and is due to several unique aspects of this model.

First, keeping in mind that the compact nature of micro fulfillment requires much less investment in real estate—often filling otherwise wasted space in retail stores that already exist—this tiny footprint also makes scaling up as you grow (or meeting seasonal demand) much easier and cheaper. But it doesn’t leave you with a lot of unused space when volumes drop again.

That small footprint also comes in handy for speeding up last mile delivery in urban areas. Instead of placing one huge distribution center on the outskirts of a city, a retailer can operate out of several MFCs placed strategically close to where customers live. This cuts transit time and overhead costs for each delivery.

Micro fulfillment helps keep items in stock on store shelves, too. Instead of waiting for a big delivery from a centralized warehouse, inventory can come from a nearby micro fulfillment location.

HOW TO GET THE MOST OUT OF MICRO FULFILLMENT

As with any other warehouse management process, the success of micro fulfillment depends on organization and efficiency. Follow these tips to take full advantage of everything a micro fulfillment model has to offer:

Optimize your inventory. This is especially crucial when you’re working in a small space. Keep your most popular, fastest-selling items in the most convenient locations to make picking more efficient.
Take advantage of automation. This doesn’t mean you have to invest in an expensive robotic picker system—digital automation in the form of a robust warehouse/order management platform can make manual picking just as quick as mechanical picking.
Choose the right WMS. Speaking of warehouse management platforms, the best software with the most bells and whistles won’t be cost effective if it doesn’t integrate well with your existing processes/scanners/tech environment. Make sure the one you choose is compatible with the way you work.
Choose the right location. Micro fulfillment’s biggest benefits are its ability to work in a small space and its improved speed of delivery. But those benefits evaporate if you don’t place your fulfillment centers in the right places. Whether using open space in retail locations or adding standalone tiny warehouses, be strategic in placing them near the highest concentration of customers.

Parcel delivery plays a critical role in ensuring a positive experience for customers. With rising costs and less forgiving consumers, it’s crucial to find ways to get products in your buyers’ hands in the fastest, most efficient way possible.

Micro fulfillment, with its cost and productivity benefits, can be the answer to your biggest delivery challenges.

Author’s Bio

Bill Catania is the CEO and founder of OneRail, which is headquartered in Orlando, Florida, and combines “a fast, intelligent platform, a scalable national footprint of couriers and a skilled Exceptions Assist team” to take “the friction out of delivery to make sure our customers are informed and happy.”

Air Cargo, Archives, Global Logistics, Global Shippers 101, Global Trade Daily

Is your Ecommerce Caught Between Delivery Delays and Voided Service Guarantees? Strategies to Survive this Situation.

June 11th, 2020 Simon Perkins Leave a comment

The pandemic has disrupted ecommerce businesses in unique ways. While a few ecommerce stores went bust, others doubled their revenue overnight. Regardless the parcel volumes continue to soar. The parcel volumes are so high that even major shipping carriers like FedEx and UPS are overwhelmed. For example, FedEx alone saw a 35%-40% increase in B2C deliveries. An unprecedented rise in shipments has forced both the carriers to resort to undertaking stringent actions.

Carriers Suspend Service Guarantees

FedEx and UPS have suspended money-back guarantee for ground and priority services. Let’s take a minute to understand what this means for merchants. An escalation in order volumes directly impacts the carrier’s on-time delivery performance. It is almost a given that merchants will experience a minimum of 20% increase in delays. An explosion in sales, impatient customers, and shoddy delivery experience. Add to it, COVID uncertainty and unaccountability resulting from voided service guarantees. Sounds like a disaster in the making?

When delays are imminent

With the growing volume of residential deliveries clogging their network, carriers may redirect traffic to relieve congestion. Suspension of guarantees also means that FedEx or UPS can switch your priority shipments to lower-cost ground mode without notice. Expect more delays for overnight and priority shipments. While you pay for a premium service there is no way you can hold carriers accountable.

Watch out for COVID-19 Surcharges

In order to mitigate the strain on their delivery network, UPS followed by FedEx has come up with peak volume surcharges. A $30 surcharge as additional handling charges and $0.40 for services like FedEx SmartPost or UPS surepost. But the surcharge that retailers must be most concerned about is the residential area surcharge. A surcharge of $0.30 will be levied on all orders that are to be delivered to residences.

Strategies to survive

The disastrous combination of delivery delays and rising shipping costs can ruin your sales revenue. It is crucial to take steps to mitigate the impact of COVID on your shipping costs as well as customer experience.

Here are a few strategies to follow:

1. Re-negotiate your shipping contract: UPS or FedEx can’t spring a surprise charge. Especially during these trying times. Work through your shipping profile to figure out the impact of these charges on your costs. Negotiate with your FedEx or UPS rep and draw up a special contract for the COVID situation.

2. Consider charging for order delivery: Free and fast delivery has been your brand’s USP. However, if including a shipping fee helps your business stay afloat, don’t shy away. Don’t let the additional surcharge eat into your profit margin.

3. Delays should not deter you: Factor in for delays while revisiting the estimated date of shipments on your shipping page. Communicate well in advance to your customer support team. Mention the changes to delivery times due to COVID On your home page.

4. Over-communicate with your customers: Let your customers know at all times where their package is. Stay on top of your orders at all times. Act quickly in case of a delivery exception.

5. Audit your invoices: Businesses are slashing all the excess spending. As for ecommerce, you should start by auditing your shipping invoice. It is more critical than ever to examine each and every line item on your invoice. This can help you save 10%-12% of your shipping costs.

The peak volume surcharges and service guarantee suspension are supposedly temporary. When things go back to normal, FedEx and UPS are likely to reinstate these service guarantees. However, with no clear timeline in businesses must prepare to navigate the status-quo as long as it lasts.

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Simon Perkins is a Shipping Cost Management expert at AuditShipment.com, a real-time parcel monitoring and AI-powered audit service that provides businesses with deep shipping intelligence and actionable cost recovery insights.