Cover Story: Holiday Shipping Tips: What You Should Be Doing NOW to Make the Season Merry and Bright
With memories of the well-publicized 2013 Christmas delivery failures still fresh on the minds of consumers and retailers alike, leading brands have already begun preparing a shipping strategy for the 2014 holiday rush. While it's not too late for proper planning for holiday shipping, it's certainly not too early. Here are four tips to improve the delivery of orders to your customers this upcoming holiday season:
1. Collaborate with shipping partners. By now, leading e-commerce businesses have developed product sales forecasts for the holiday season. (Hint: if you haven't, you're way behind!) UPS and FedEx started planning for the 2014 holiday volume surge several months ago. The largest e-commerce shippers will see parcel carrier representatives request volume forecasts much more proactively this year. These discussions will include operational planning, allocation carrier assets, cutoffs, contingencies and, potentially, volume restrictions.
2. Set clear customer expectations. Last year's holiday shipping failures were precipitated by a shortened selling season, inclement weather and unrealistic calendar cutoffs that encouraged last-minute shopping. Leading online retailers will influence consumers to shop early by offering product discounts and free shipping incentives in the beginning stages of the holiday shopping season. Consumers need to believe that the best deals will be offered early, and that discounts, free shipping and other promotions won't be available closer to Christmas. That message should be reinforced and prominently displayed on catalogs, websites, packing lists, advertisements, etc., along with clear cut-off dates for guaranteed delivery by Christmas.
3. Put contingency planning in place. Consider adding regional parcel carriers and/or the USPS — which offers seven day/week deliveries — to your core carrier mix. Keep in mind that UPS and FedEx operate ground networks five days a week. Products like Priority Mail are delivered six days a week at no additional charge — that's four additional delivery days between Thanksgiving and Christmas in 2014!
4. Be aware of potential volume restrictions. While the carriers could introduce a holiday surcharge, it's much more likely they'll hold firm on volume restrictions. Of course, when it comes to retail, predictive models change constantly, so I expect the carriers to remain as flexible as possible with their customers ... but only to a point. While the carriers will hire and train thousands of temporary holiday workers and bolster operations with additional airlift, trucks and other assets to meet volume challenges, it's not an elastic system. Also, don't make the mistake of overpromising packages to carriers to improve your allocation of assets like trailers and trucks. The parcel carriers could look for contractual commitments to recover fixed costs.
With proper planning for the upcoming holiday season, you can avoid revenue and customer losses, product returns, and bad publicity resulting from packages being delivered late.
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.