Peak season demands, carrier strikes and limited features are all reasons why single-carrier servicing limits your business potential
No matter how strong your customer experience is at the start, the experience that sticks with your consumers most is whether you fulfilled your delivery promise. Add on the stress of the holiday season, and you have customers obsessed with when they can receive and wrap their gifts. While the holidays are an exciting and happy time for most, they can be some of the most stressful times for e-commerce and retail businesses – especially ones that primarily use a single carrier for parcel shipping. Relying on one source for your whole peak season shipping volume is a dangerous game, and it doesn’t become less dangerous after the holidays subside.
A recent Logistics Management reader survey of more than 220 logistics and supply chain professionals found that 2018 peak season expectations are robust, with 61% of respondents expecting to be more active than last year (up from 58% last year) and 29% indicating they are not expecting a change (down from 35.5% last year). With carrier concerns such as overloaded network capacity, strikes and limited services, single-carrier operations are sure to feel the heat.
As we slide into peak season, it’s important to understand your unique carrier mix, and if you haven’t already, ask yourself if you feel confident that your strategy can meet customer expectations. If there’s a carrier strike or your volume skyrockets to more than you anticipated, will you still be able to meet delivery promises? Because unfortunately, if a customer orders a gift during peak season and you are delayed with the delivery, this could tarnish your reputation – or worse – cause loss of business in the future. When faced with a poor delivery experience, 39% of consumers won’t shop with that retailer again.
Carrier Networks & Capacities – Not All the Same
Thanks in part to Gen Z, Millennials and the inevitable rise of technology, e-commerce and mobile shopping have grown exponentially in the past years making shipping the backbone of experience. For example, just last year in 2017 when carriers had thought they’d adequately prepared for the holiday shipping season, several were struggling under the immense pressure to deliver. Last year in the US alone, Cyber Monday sales totaled $6.6 billion — nearly 17 percent higher than 2016 – and we are expecting the trend to continue upwards as online shopping only continues to become more popular. This puts major pressure on the carriers’ delivery networks.
Carriers have tried to keep up with the demand by investing their efforts into improving their networks by adding facilities, automation, technology and people. But this still does not guarantee that a carrier will not be overloaded on a particular lane for a few days. And that risk only increases with bad weather. It’s important to note that in the last few years carriers have also started implementing ‘quotas’ on their largest customers during the holiday season and have been charging fees if quotas are unexpectedly surpassed.
With carrier network investment it should be no surprise that carriers will have different capabilities in different lanes. Where one carrier may have improved their Northeast ground network, another carrier may have added capacity in California. Carrier networks change every year, and shipping tools such as multi-carrier shipping software keeps up with these changes.
All Your Eggs in One Basket
Another issue plaguing single-carrier retailers is delivery strikes. As recent as November 1st 2018, UPS Freight has been warning customers to make alternative shipping arrangements while admitting a potential strike as a union contract vote approaches. While UPS Freight is mostly store-to-store shipping of large and bulk shipments on pallets, these delays will inevitably affect peak shipping times. Of the strike, UPS stated, “We have now begun discussions with UPS Freight customers to inform them of the potential for service disruption and the need to arrange alternative carriers.” This could spell disaster for single-carrier operations.
On top of the UPS Freight Strike threat – Canada Union of Postal Workers (CUPW) has already taken it one step further and began their strike on October 22nd. Canada postal workers have warned that due to minimal bargaining progress being made, that businesses should settle in for a long strike. Officials from Canada Post have stated that “significant offers” have been made to CUPW “that include increased wages, job security and improved benefits.” Yet in the almost three weeks that they have been active, the rotating strikes have caused a backlog of parcels and packets, according to the corporation, which has led to delivery delays.
It is due to the UPS strike of 1994 that most shippers now have at least two carriers. Now that we have had three strike concerns in the past year, there is no indication that this risk to shippers will be going away anytime soon. Being able to reroute packages to carriers less affected by the holiday rush and current strikes is a great way to keep your shipments on schedule.
Options Become Decisions - Can You Make Them?
One of the biggest risks seen by using a single carrier for any level of service is the lack of choice – the choice to make a better shipment execution decision. A decision like this can meet/exceed your customer’s expectations at an acceptable price, or it can be the decision no shipper wants to make; meet the customer’s expectation at a high price or go with a low price that will not meet the customer’s expectation. A ground service that will deliver a shipment in 2 days will still be less expensive than most 2-day express services, even with an aggressive discount.
The carriers have different networks and their postal last mile and ground services, which are generally more affordable than express services, have different transit times for many origin and destination pairs. Using only one carrier gives you only one zone map for your shipping software to look at. By using two or more carriers, customers can be provided with more options, and shippers can execute on them at the lowest cost possible.
Without the ability to rate shop multiple carriers and their services, you’re out of luck if a single carrier goes on strike or becomes overloaded. Without the right shipping software, adding on a single carrier at a time would be extremely time-consuming, plus you would have to switch between interfaces to compare routes and rates. This is a slow process, and the dollars and time wasted is not worth it. Don’t get stuck with minimal choices, bogged down lanes and unanticipated strikes. Instead, add additional carriers to your mix and keep your delivery promises.
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