New Articles

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

delivery

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

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.

________________________________________________________________

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.

ecommerce

In the Push for Faster Ecommerce Deliveries, How Can Logistics Stay Agile?

Today’s consumer isn’t used to waiting. They expect to get whatever product they want, wherever they want it, as soon as possible.  Perhaps nowhere is this more true than in the world of ecommerce. Customers look forward to their online purchases arriving faster than ever – sometimes on the same day that they click “purchase.” And with drone doorstop delivery on the horizon, compressed delivery timelines show no sign of stopping anytime soon.

Faster ecommerce delivery has created revolutionary convenience for consumers, but it’s also generated major transportation hurdles for companies to overcome. As a result, companies that want to deliver ecommerce shipments at the speeds that customers expect need to consider how to adapt all elements of their supply chains.

Managing more intricate logistics

Some companies that raced in to capture an early share of ecommerce market struggled to keep up while also keeping costs down. But that’s to be expected with a more complex distribution model.

Instead of shipping mostly to stores, companies now must determine if their supply chains can quickly move orders to many consumers in many locations. To do this, they must be able to proactively coordinate shipments whether they’re on the ground, on the ocean or in the air. 

Companies can help manage this complexity by taking a more hands-on logistics approach. They should draw on a variety of services and resources, while remaining efficient and visible. 

Many shippers, for example, choose to work with a third-party logistics provider to help facilitate the intricate details of shipments, provide visibility, and help freight arrive in a timely manner. 

Fixed or Flexible?

One of the biggest decisions a company in the ecommerce market will make is how they balance their supply chain. 

For example, a supply chain that’s more focused on fixed infrastructure than the fluid movement of goods can lower a company’s costs in the long run but also make them less agile. While a service-heavy, asset-light supply chain can make a company more flexible but also raise their costs.

Some companies are drawing a line in the sand. Some online businesses, for example, are rejecting ecommerce’s expectation of immediacy. Instead, they’re building supply chains that prioritize volume over speed. 

This has pushed ecommerce sellers to start providing more shipping time options. But it’s still unclear whether having more choices will lead to consumers changing their delivery expectations.

In any case, ecommerce fulfillment encompasses several, often-contradictory considerations of time, cost, and transportation mode. To bring these factors together through informed decision making is a challenging undertaking. But it’s essential for any company that wants to compete as ecommerce continues to grow and its barrier to entry continues to fall. 

Taking the first steps

Data goes hand in hand with ecommerce, so it can be a good area for a company to make its first key investment. 

Specifically, advanced business intelligence and predictive data modeling help companies better understand and forecast consumer demand, and they can then adjust their supply chains accordingly. Through access to this data and integration with service information from their shippers, companies can better identify their priorities and decide where to invest resources. 

Those that don’t know where to start should also know they don’t have to make these big decisions on their own. Industry experts like C.H. Robinson can offer a clear perspective—based on their scale and local experts in offices around the globe—and will understand their specific ecommerce business needs and translate them into productive logistics solutions.