This commentary was written by George Shchegolev, co-founder of Route4Me. The views expressed here are solely those of the author and do not necessarily represent the views of Modern Shipper or its affiliates.
Heavy delays, product shortages, increased consumer demand, and on-time expectations; no, this isn’t another pandemic; it’s the holiday season. Those involved in shipping and logistics hoped for a year with relatively few setbacks. However, economic uncertainty and volatility, a threatened rail worker strike, employee turnover, and a UPS driver strike show that 2022 was not quite the year they expected.
The continued fallout from these challenges proves one thing – that there’s no predicting almost anything anymore, let alone the holiday season. As companies look to successfully deliver their packages on time and keep their customers happy, there are three key areas businesses will want to keep in mind to ensure ongoing success.
Diversify your shipping network
Labor shortages force shipping companies to make tough decisions. For example, they might only deliver packages they’ve committed to under their current contractual obligation. The pandemic brought more of these tough situations to light. National shipping companies turned down business due to capacity constraints and labor shortages. This pressed shippers to diversify their shipping network and utilize regional service providers to fulfill customer demands. Tapping into regional shippers diversified their risk and created a more resilient shipping framework.
The big shippers regained their ability to take on more packages this year due to a drop in demand. Supply chain issues that plagued the last holiday season prove there are no guarantees that delays won’t return. As such, it’s essential to reduce single points of failure by working with regional shippers to protect against the macro headwinds that are primarily affecting large companies. The inability to fulfill customer demand negatively impacts your brand image and stunts growth. You’ll be prepared if you create a backup plan, by diversifying with several potential shipping providers should major carriers experience throughput issues.
Focus on transparency
When inevitable issues emerge, customer communication often saves the day. A customer who runs into the problem before they hear from you won’t be a customer for long. Customers today expect things quicker than ever, so delays inevitably reduce customer satisfaction. Visibility into all stages of the shipping and delivery process eliminates complaints and boosts customer satisfaction. Sometimes customers even forgive late deliveries because transparency reinforces patience and forgiveness.
Customers appreciate knowing where their package is at any given moment. Shippers and shipping companies can keep customers updated by providing high-level transparency into the supply chain and logistics. Instead of basic tracking, companies should provide updates and communicate delays. For example, you could provide updates when loading a package into the vehicle or when a package already is enroute to a customer. Transparency from both ends of the shipping network ensures a customer is always aware of package location and allows them to plan accordingly.
Like in any industry, communication is vital to shipping and logistics. As much transparency as possible allows for a more seamless experience for all involved.
Implement cutting-edge technology
Innovative tech and automation, like route planning software or EVs, helps create a more efficient and transparent organization, improve driver productivity, and reduce delivery time.
For example, automation and route optimization tools help drivers plan and drive more efficient routes, helping them drive less, reach more destinations, and avoid traffic or delays on the road. For a shipping company, route optimization and dispatching provide significant operational efficiency by decreasing the number of times a package is touched and improving efficiency in the field, which cuts down on fuel costs and delivery time. Increasing stop density is ever so important, and with holiday traffic and winter weather, this can be the difference between having something delivered on time or late.
Electric vehicles are another example of technologies helping companies save on fleet upkeep and fuel. If you own your vehicles, then electric vehicles, which do cost more money short term, provide significant savings on day-to-day operations. For instance, UPS purchased 10,000 electric vans in 2020 to reduce the money spent on fuel and van maintenance. These vans are 50% cheaper and have a longer working life than regular vans.
Beyond that, electric vehicles also help the environment. Shipping companies increasingly require partners to utilize new clean technologies. Adopting EVs will ensure alignment with your partners and create a more sustainable corporate vision.
he holiday shipping season is a critical time for delivery providers. To avoid the mistakes of yesteryear and to ensure packages reach destinations on time, companies must embrace proactivity by identifying other shipping providers and communicating with customers as often as possible. New technology offerings also help provide a significant operational footprint and operational efficiencies. These steps help you navigate the most important season of the year now and well into the future.
About the author
George Shchegolev is co-founder of Route4Me, a route-planning and mapping technology company for last-mile delivery.