Any company with a D2C ecommerce model is well aware of the increasing challenges of managing fulfillment, in particular, freight costs during the fourth quarter. Consumer shipping expectations continue to rise driven by the fulfillment benchmark being set by Amazon, Walmart, and other large D2C companies. Consumers are being trained to expect shorter shipping times with low, or no, shipping costs. Further increasing the complexity of managing fourth quarter fulfillment is the increasingly compressed online holiday shopping season driven by the expectation of 1 to 2-day shipping. In this article the focus will be on strategies to manage fourth quarter freight costs during this critical period while meeting your customer’s high expectations. In particular, we will focus on the key drivers impacting your shipping costs which includes, staffing, packaging, dunnage, freight negations, and communication.
Moving your product from point A to point B is rarely a A-to-B process. As customers happily dive into their shipments, little thought goes to the intricate network behind the scenes that made it happen, but those same shipping solutions are likely a major concern for you. One of the most challenging aspects of shipment is the dual selection of mode and carrier. While it's tempting to lean on a basic freight quote to keep things moving along, you'd be doing yourself a disservice. Basic freight quotes are full of holes, and may not be meeting your fulfillment center's needs in a meaningful, consistent way.
There are three things you need to consider that are often missed.
There are a number of targets to aim for when it comes to succeeding in fulfillment service —proper protection of goods, accurate delivery location, time windows and, increasingly, the cost that's ultimately passed on to the consumer. The omni-channel sales movement has done more than increase spending and reach, it's taught customers to expect variety and convenience in every aspect of their shopping experience. The fulfillment service center has shifted from a behind-the-scenes player into a vital part of that expectation, and the way shipping choices are handled and presented can now make or break a bottom line. Do you know if your shipping choices are the ones your customers are looking for?
Staying competitive is one of the biggest challenges facing every company, even those that provide vital services in the logistics sphere. Simply moving goods from one point to another is no longer enough to ensure prosperity in an omni-channel era. Shipping solutions must be as diverse and customer-pleasing as the products themselves. To that end, the 3PL industry has begun to mirror its non-service clients, absorbing and buying out peers in a bid to remain attractive to customers, both current and potential. What does this mean for you, as a client on that roster?
If fulfillment managers seem a little nervous lately, they have good reason to be: There's a lack of truck drivers bearing down on them like, well, a runaway, unmanned semi. After putting so much time and effort into tying trucks into the IoT, building efficiency into shipping routes and otherwise embracing technology, it's a sad irony that the sticking point of shipping solutions now seems to be the human component. As drivers age out, retire or leave the industry for other jobs, 3PL companies are casting increasingly nervous glances into the pool of teenage drivers or calculating the red tape ahead of them to use flying robots for the last mile.
Moving your product from point A to point B is seldom an A-to-B process. As customers happily dive into their shipments, little thought goes to the intricate network behind the scenes that made it happen, but those same shipping solutions are likely a major concern for you. One of the most challenging aspects of shipment is the dual selection of mode and carrier. While it's tempting to lean on a basic freight quote to keep things moving along, you'd be doing yourself a disservice. Basic freight quotes are full of holes, and may not be meeting your fulfillment center's needs in a meaningful, consistent way.
There are three main shortfalls to keep an eye out for.
It speaks volumes that companies searching for solutions to the trucker shortage are frantically looking into automated vehicles as a logistics alternative for the proposed, human fix: young adult drivers. While the fulfillment industry may be put off by the stereotypical perception as poor drivers, perhaps we shouldn't be so quick to dismiss what may be a brilliant way to solve two issues at once: dismal job opportunities for young adults and an industry that is facing an ever-growing employee shortage. The most brilliant shipping solutions won't mean a thing if packages can't get where they need to go, and with drone potential tangled in red tape for likely years to come, it's time to seriously consider what putting more younger drivers on the road could do for freight carriers and the businesses whose merchandise they carry.
For carriers and retailers alike, shipping solutions no longer simply encompass a cardboard box and a few strips of tape. Increasingly complex customer demands and the advent of innovations like the data-driven IoT have essentially eliminated the one-size-fits-all approach to shipping goods; the carrier is now as much "on the hook" to vary their offerings as the retailer is to vary their SKUs. Thankfully, these brave new (and complicated) worlds in fulfillment services have quite a few intersections, allowing smart supply chain partners to team up and make the most of shared opportunities.