E-commerce sales have continued to soar in 2021. The National Retail Federation projects 2021 non-store and online sales will grow 18-23 percent to $1.09-1.13 trillion, and many retailers should expect significantly more e-commerce orders during peak season. With the carrier capacity crunch and other challenges looming large, seamlessly fulfilling all those orders will be no easy task for many merchants.
Unfortunately, shippers that have yet to adequately prepare are now out of time to implement some of the game-changing enhancements that could help them thrive throughout Peak 2021. Most should now be honestly assessing how bad things could get and considering what options may still be available to mitigate some of the challenges and contain damage where possible.
With some careful planning, shippers can use the weeks and months ahead to determine the right solution to navigate future peak seasons, but they need to urgently develop the right now solution immediately.
Peak season’s many fulfillment challenges
Carriers have imposed widespread shipping capacity limitations. Some carriers have stopped accepting new peak season business completely, including some regional carriers. OnTrac, for example, stopped accepting new peak business on September 1, but capacity issues are just one of the carrier-related challenges shippers must overcome.
When shippers can get the carrier capacity they need to get parcels to customers, they still must navigate steadily rising costs. Following suit with other major carriers like FedEx and UPS, even the USPS announced peak season surcharges for 2021, and if not properly managed, the additional fees and rate increases imposed by FedEx and other carriers can prove to be even more costly.
Prioritize peak season prep with parcel shipping data
Merchants’ own parcel shipping data can shed light on the best ways to improve fulfillment this year and in the future. As the unprepared take stock to determine what can still be done to get ready for Peak 2021, parcel shipping data from fulfilment software and business intelligence engines can help them evaluate which adjustments will move the needle most in the short term, and collecting data throughout this peak season can empower all shippers in the new year.
When the calendar year turns, this data can provide the same valuable prioritization insights for shippers seeking the most impactful long-term fulfillment solutions. It can also provide next-level intelligence that most shippers lack when negotiating with carriers to secure better rates and/or more capacity and help them make wise decisions about new initiatives, such as determining the ideal locations in which to onboard supplemental regional, local or gig-economy carriers.
The right now solution
Band-Aid solutions can still help partially prepared shippers make the best of what may be a bleak situation, and the range of options available depends largely on just how much preparation has been done. Many unprepared U.S. shippers will rely more than ever on the United States Postal Service (USPS), for example, but this fallback option may prove more costly than in past years.
Thankfully, navigating peak season is not an all-or-nothing proposition, and shippers should lean on their strengths to ease the crunch. Those who have diversified their carrier network to at least include multiple carriers can direct parcel volume to different partners, and multi-carrier parcel shipping technology can help them do this in a strategic and cost-effective manner. Those with business intelligence at their fingertips can consider more than cost to manage the entirety of their parcel shipping needs as effectively as possible.
Merchants may elect to incentivize customers to choose fulfillment options that do not require a national carrier. Shorter shipments sent from local stores can often be executed with regional carriers. This can ease an organization’s order fulfillment burden, as can incentivizing customers to buy online and pick-up in store (BOPIS) for merchants equipped for this type of omnichannel fulfillment. Some merchants may offer aggressive incentives to encourage customers to take advantage of these options or agree to longer delivery times.
Omnichannel retailers like Walgreens, which implemented same-day delivery in under two hours for more than 24,000 retail products, will be tapping into gig economy carriers for additional capacity. This can help offset need for national carrier capacity and drive more sales to existing and new customers.
Shippers who have not yet established these capabilities will need to wait for 2022. For now, they need to take stock of their existing capabilities, determine what’s possible, and solidify plans to pull every impactful lever at their disposal to get through Peak 2021.
Take steps to limit the damage
Every unprepared shipper should think about damage control. Setting clear expectations with customers increases the odds of making them happy and retaining their business, but this strategy also brings drawbacks, such as lost sales. Unprepared shippers need to make tough decisions about how to incentivize customers to happily accept slower delivery times and find ways to get customers to come back in the future, even if they can’t meet those customers’ expectations this time around.
Do what’s right in 2022
On January 2, while navigating returns season, shippers should tear off the Band-Aid measures put in place this year as the right now solution and begin to heal their fulfillment processes. They should start planning for peak season right away in 2022 to avoid entering peak season unprepared again. First and foremost, they should secure executive support for the changes that need to be made to implement the right solution and invest in fulfillment processes so they can be readier than ever for Peak 2022. Addressing the need for carrier capacity and cost containment early in the year can free teams up to focus on growing sales and pleasing customers with far fewer fulfillment worries.