Blog Posts Preparing for the Year Ahead: Parcel Shipping
- Order fulfillment operations should gear up for more ecommerce growth in 2022.
- Plan for continued capacity constraints and rising parcel costs.
- To help save on shipping, look for ways to increase efficiency and optimization.
2021 was a wild ride for retailers and brands as they scrambled to handle record ecommerce growth. High online order volume made parcel shipping particularly challenging. With no sign of a slow-down in sight, you may be wondering how to best prepare your fulfillment operations for the year ahead.
In a new column for Multichannel Merchant, Perry Belcastro, Saddle Creek’s Senior Vice President of Fulfillment, shares strategies to help optimize ecommerce fulfillment utilizing technology, distribution networks and parcel solutions.
The following excerpt details his insights on how to handle increased parcel volume…
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Parcel costs are rising exponentially. Since demand exceeds capacity, carriers currently hold all the pricing power and can be selective when onboarding new volume. They’re also renegotiating contracts to drive less profitable volume out of the network. Regional and local carriers are entering the competitive landscape, but it will likely be 2023 before we see a significant impact to the market or meaningful competition with UPS and FedEx.
In this environment, you’re unlikely to reduce shipping costs through lower rates, so you’ll need to rely on efficiency and optimization to achieve savings.
Rate shopping can help identify the most economical solution to meet your customers’ delivery expectations. You may be able to reduce shipping costs by as much as 25% without sacrificing speed to customer. If delivery time is a concern, combining rate and transit shopping allows you to reach customers faster and more affordably than static routing.
Rate shopping can help identify the most economical solution to meet your customers’ delivery expectations. You may be able to reduce shipping costs by as much as 25% without sacrificing speed to customer.”
Perry Belcastro, Senior Vice President of Fulfillment
Saddle Creek Logistics Services
In the current parcel market, data transparency is critical. Take advantage of analytics software to gain visibility into your parcel data, in order to measure performance and cost and evaluate how carrier rate changes impact your distribution.
For more fulfillment strategies, read Ecommerce Fulfillment: 3 Ways to Optimize in 2022.
Related to: Managing Growth, Multiple Sales Channels, Parcel Shipping Selling Online