Creating Fulfillment Independence to Reduce Shipping Challenges

Shipping challenges and carrier capacity issues driven by the rapid growth in e-commerce over the last year demonstrated to retailers the need to begin planning for peak season as early as January. For many retailers, it’s already too late to adequately prepare for peak holiday shipping season 2021.

During the 2021 holiday season, delivery demand is expected to exceed capacity by 5 million pieces a day. While trying to keep up, carriers' investments in capacity may still not be enough for this peak season, meaning retailers face another challenging holiday period with limited space and higher costs. However, retailers can still find ways to effectively mitigate upcoming peak season concerns while also planning for future challenges ahead of other peak periods.

To better execute parcel shipping workflows and create greater fulfillment independence, retailers need to overhaul practices and adapt strategies. With many companies under immense pressure to successfully navigate peak season and prepare for ongoing shipping challenges, implementing the following shipping strategies can help establish improved business resilience and order fulfillment agility.

Embrace Omnichannel Distribution Capabilities

With e-commerce volumes having grown exponentially, creating a nearly constant peak-like level, retailers re-examined their parcel shipping operations to find ways to increase responsiveness and maintain service consistency and customer satisfaction, while minimizing costs.

Utilizing multiple e-commerce order fulfillment methods such as ship-from-store; buy online, pick up in-store (BOPIS); and buy online, return-in-store (BORIS) can be a critical differentiator. These omnichannel distribution and return capabilities help retailers meet consumer demand for fast, flexible delivery while offsetting order fulfillment and return costs and increasing customer satisfaction.

With the adaptability to execute­ any number of fulfillment scenarios through omnichannel distribution, retailers can enhance the flow of products both within and without facilities, helping the organization overcome current challenges and adapt to future changes.

Leverage Data Analytics to Monitor Carrier Performance

Retailers increasingly understand the value of using data effectively to enable next-level logistics and supply chain management, but there’s room for greater adoption. Data can inform strategic decision making and help retailers effectively tie parcel shipping operations to their company strategy. For instance, retailers can leverage data to monitor every shipment to ensure carriers perform services as contracted, effectively holding carriers accountable and improving on-time delivery.

Retailers can also explore alternate order fulfillment methods using data by running rate simulations and comparing different scenarios to current transportation strategies to set and measure parcel shipping key performance indicators. With the ability to analyze the impact of carrier capacity limitations and order demand through shipping data, retailers can pivot carriers and transportation budgets to match customer expectations and make cost-savvy supply chain decisions that align with business strategy.

Diversify Transportation Networks

The persistent delivery capacity shortage and unrelenting e-commerce volumes continue to raise the stakes for many retailers. To successfully navigate carrier disruptions and combat peak surcharges, diversifying transportation networks serves as a valuable tactic. Greater access to more carriers creates flexibility in fulfillment by introducing more options and capacity, while better keeping costs in check.

A diverse transportation network provides the ability to quickly turn to other carriers when capacity limitations or surcharges from regular carriers cause disruptions to ensure deliveries reach their intended destinations in a timely fashion. Retailers should consider including last-mile and regional carriers in the mix for more flexibility to compete with the massive volume of business that national carriers draw from the market. With access to different types of carrier services, retailers can keep customers happy while minimizing the impact of surcharges and obtaining the best value for every destination, delivery date and product shipped.

Create Greater Supply Chain Predictability

Real-time insights into end-to-end logistics and supply chain management processes can inform strategic decision making to future-proof operations. Access to shipping data allows retailers to identify opportunities for ongoing improvements and remove some of the complexity of shipping challenges to more seamlessly fulfill deliveries, meet customers' expectations, and achieve overall business goals.

Advanced Technology is Key

Cloud-based multicarrier shipping technology helps retailers infuse resilience and business agility into operations to create greater fulfillment independence.

Utilizing this type of technology allows retailers to:

• easily automate high-volume shipment execution, parcel contract management, rating, rate shopping, label creation, and parcel delivery monitoring;
• identify efficiencies and increase distribution flexibility, shipping speed, on-time delivery rates, and order volume; and
• determine the impact of carrier capacity limitations and order demand with the ability to pivot carriers and transportation budgets to match customer expectations.

Proactively adapting shipping strategies to build fulfillment independence empowers retailers to effectively respond to shifting demands and avoid logistical pitfalls. Improved order fulfillment efficiency gives retailers the freedom to be nimbler and offer customers more flexibility. It’s important to prepare now to capitalize on new supply chain opportunities and navigate unpredictable conditions, whether during peak season or other supply chain events.

Aimee Tierney is vice president of sales at Logistyx Technologies, the leader in multi-carrier parcel shipping solutions.