It comes as no shock that 2020 has been an unprecedented year when it comes to retail and consumer spending. The Covid-19 virus disrupted the economy, closing many retail stores and forcing consumers to buy more online. This accelerated shift to ecommerce has presented many challenges for online retailers and will only provide more challenges during this holiday season. A shortened holiday shipping window, carriers running at capacity and increasing shipping costs put retailers and consumers in a difficult position this holiday.
Increased Expense:
One of the biggest keys that I stress when discussing parcel shipping with retailers or fulfillment companies is developing a relationship with your carrier reps. This could never be more true now as the shipping landscape is consistently changing and at times it can be hard to keep up.
Earlier this year USPS announced rate increases that would take effect on October 18th. This increase was not just on USPS services, but many carriers using the USPS for final mile of delivery (i.e. SurePost, SmartPost, DHL ecommerce, Pitney Bowes, etc.) also increased rates to help maintain margin. UPS and FedEx also announced holiday surcharge rates that will affect customers who will have volume increases over the holiday.
In past years, most of these increases or surcharges could be negotiated, but this year is a bit different. Since Covid-19 and the increase of online shopping, carriers have been running at capacity and having difficulty keeping up with volumes. My experience has shown, this makes it hard to negotiate as they don’t seem to mind if you try and take the business elsewhere. On the flip side, most carriers are not bringing on new customers until after the first of the year.
Plan Like Never Before:
Hopefully you have developed a great relationship with your carrier reps and you are already peak season planning, but if not get on it. As I mentioned previously many carriers are already running at capacity or anticipating to be over capacity come this holiday. This means that you will need to fight for additional pickups. Work with your carriers to provide forecasting and planning on the additional pickups that might be needed. The earlier you do this the better.
Due to capacity issues we can almost certainly anticipate that there will be delays in deliveries. UPS and FedEx have already moved away from their guaranteed deliveries during the spike in volumes this summer and delays will probably be worse this holiday. Work to train your customers that estimated delivery times might vary during the holiday.
Working with your carriers and your customers to prep for what is to come will help save time and hassle during the upcoming holiday.
Have Options:
For many online retailers being able to aggregate volumes through one, two or maybe three carriers allows for lower rates and more leverage. But this can hurt you during this peak season if you do not have back up carriers or a plan to divert volume, should you not be able to get the service you need from your primary carrier.
Reach out to alternate carriers prior to needing them to see if you can use them as a backup should you be unable to get trailers from your primary carrier or see long delays in shipping. Ultimately, this will help keep your customers satisfied, even if it might cost a little more.
I don’t know if anyone has a crystal ball into what this holiday will bring, but if it is anything like the rest of 2020 we are in for a wild ride. With a shorten holiday shipping window, more consumers then ever shopping online and the continuing impact of the pandemic, all we can do is plan for the worst and hope for the best.
For more information on how IDS Fulfillment is helping our customers with Peak Season Planning, Contact Us Today!
