Each year as ecommerce retail sales grow, the shipping and logistics industry faces hurdles to keep up the pace. More consumers are shopping online and it’s created demand surges resulting in shipping delays and supply chain bottlenecks.
How should ecommerce sellers plan to navigate unforeseen challenges this holiday season? What should they expect this year to look like? We asked five logistics experts for advice, here are their answers.
Plan for Small Parcel Surges
UPS indicated that they expect their peak demand to exceed capacity by 5M packages per day. FedEx has alluded to similar expectations. If the holiday surge is anywhere close to that volume, there will be a huge strain on the small parcel delivery network. Sellers should work hard to communicate often with their partners and customers so that no one is left not knowing what to expect.
Sellers should work closely with their fulfillment partners or directly with their carrier (if they are fulfilling themselves) to share their forecasts and develop a cohesive strategy to mitigate risks (shipping delays, volume caps by region, etc.) Do you have a backup plan if the service you’re using has major delays? What are you communicating to your customers? Is your marketing team planning on doing promotions early?
“The number one thing ecommerce sellers should be doing to prepare for the 2022 peak season is plan their parcel shipping capacity. Sellers should be preparing accurate daily shipping forecasts for the entire peak season and sharing that information with their parcel partner(s) to ensure they will be able to handle their needs and establish contingency plans where there appear to be shortages.”
Factor in International Shipping Capacity
Ocean and air freight costs were at all-time highs during the first surge of the COVID pandemic. It could happen again under the right conditions. Getting your products into the US before the holiday surge will ensure you’re not overpaying for freight this year.
Early indications are that ocean freight into the US will continue to be a huge issue. For example, in early Fall, thousands of shipping containers got stuck waiting to be processed off the coast Southern California. This affected millions of shipments and will have ripple effects going into the holidays.
“For the upcoming holiday season, sellers need to be of aware of the fact that shipping capacity might be limited and the shipping rates for both air and ocean freight will be very high. Planning your shipping strategy should have happened already, but you can still make changes in order to allocate the right inventory between air and ocean freight to minimize costs and transit time.”
Don’t Forget Customer Service
Your customers should come first! Plan to support them through all aspects of their experience with your brand: set expectations when it comes to shipping times, product availability, returns, and general support; hire enough staff to ensure all customer requests can be met promptly and their issues resolved quickly; set up your channels so that communication flow easily, from your brand and also from your customers.
“Think through your customer support plan. Customer support is the last line of defense for a bad customer experience. Think through the appropriate staffing and automated macros. What can you add to protect against unforeseen issues that inevitably come up? Keep in mind that international shipments have a longer carrier transit time. Last year we saw a ~40% increase in customer service tickets November through January, despite a ~20% drop in shipments from the same time period.”
Having enough inventory is important to every peak season. No matter your fulfillment method (Amazon FBA, dropshipping, etc.) you need to communicate with your supply chain partners to ensure you can fulfill orders on time. With so many global shipping issues within the last two years (factory shutdowns, component shortages, distribution center backups, and more) you should get ahead of your inventory strategy this year.
“Increase inventory on hand earlier than you would normally, given the massive supply chain issues impacting inbound freight timelines. Since you won’t be spending time sourcing parts, components, or products, you’ll be able to spend that time on marketing, company culture, or any of the other hurdles you have to overcome.”
Get Your Distribution Flow Right
If you sell on any marketplace (Amazon, for example) you know how tricky it can be to keep product supply steady during peak season when you’re also under volume constraints. Amazon FBA sellers, for example are under strict storage limits. Work with a reputable 3PL to help you manage your inventory flow to marketplaces and retailers, so that you can focus on your customers and products during the busy season.
“Having enough inventory is so important for Amazon sellers because it means you won’t lose your positioning on the platform, and you won’t lose customers who might see ‘delivery in three weeks, five weeks, six weeks, etc.’ because you’re not likely to ever get that person back. For Amazon FBA sellers you need to make sure you have enough inventory without going over the storage limit. This means finding the right logistics provider who can help replenish your stock. Some 3PLs have been challenged for different reasons in the last year. Don’t let your partners be the reason you’re low on inventory.”
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Tags: Expert Advice & Tips