This comment was written by George Shchegolev, co-founder of Route4Me. The views expressed herein are solely those of the author and do not necessarily represent the views of Modern Shipper or its affiliates.
Severe delays, product shortages, increased consumer demand and on-time expectations; no, this is not another pandemic; it is holiday season. The freight forwarding and logisticians were hoping for a year with relatively few setbacks. However, economic uncertainty and volatility, a looming rail workers’ strike, employee attrition and a UPS drivers’ strike show that 2022 wasn’t quite the year they expected.
The lasting impact of these challenges proves one thing – that there is almost nothing left to predict, let alone the holiday season. As businesses strive to deliver their packages on time and keep their customers happy, there are three key areas businesses should keep an eye on to ensure continued success.
Diversify your shipping network
Labor shortages are forcing shipping companies to make difficult decisions. For example, they may only deliver packages that they have committed to as part of their current contractual obligation. The pandemic has brought more of these difficult situations to light. National shipping companies rejected the deal due to capacity constraints and labor shortages. This pushed shippers to diversify their shipping network and use regional service providers to meet customer demands. Tapping into regional carriers diversified their risk and created a more resilient shipping framework.
The large senders were again able to accept more parcels this year due to a drop in demand. Supply chain issues that plagued last holiday season prove there’s no guarantee delays won’t recur. Therefore, it is important to reduce single points of failure by working with regional carriers to protect against the macro headwinds that mainly affect large companies. The inability to meet customer demand negatively impacts your brand image and hampers growth. You’ll be prepared when you create a backup plan by diversifying with multiple potential shipping providers in case throughput issues arise with major carriers.
Focus on transparency
When inevitable problems arise, customer communication often saves the day. A customer who discovers the problem before hearing from you will not remain a customer for long. Customers are now expecting things faster than ever before, so delays inevitably reduce customer satisfaction. Transparency in all phases of the shipping and delivery process eliminates complaints and increases customer satisfaction. Sometimes customers even forgive late deliveries because transparency breeds patience and forgiveness.
Customers appreciate knowing where their parcel is at all times. Shippers and shipping companies can keep customers informed by providing high transparency in the supply chain and logistics. Instead of simple tracking, companies should provide updates and communicate delays. For example, you can provide updates when a package is loaded into the vehicle or when a package is already on its way to a customer. Visibility from both ends of the shipping network ensures a customer always knows package location and can plan accordingly.
As in any industry, communication is crucial in shipping and logistics. As much transparency as possible allows for a smoother experience for everyone involved.
Implement cutting-edge technology
Innovative technology and automation, such as route planning software or electric vehicles, help to create a more efficient and transparent organization, improve driver productivity and reduce delivery times.
For example, automation and route optimization tools help drivers plan and drive more efficient routes, drive less, reach more destinations, and avoid traffic jams or delays on the road. For a shipping company, route optimization and dispatching provide significant operational efficiencies by reducing the number of times a package is touched and improving field service efficiency, reducing fuel costs and delivery time. Increasing stop density is hugely important, and with holiday traffic and winter weather, it can mean the difference between on-time or late delivery.
Electric vehicles are another example of technology helping companies save on fleet maintenance and fuel. If you own your vehicles, then electric vehicles, which cost more money in the short term, offer significant savings in day-to-day operations. For example, UPS purchased 10,000 electric vans in 2020 to reduce fuel and van maintenance expenses. These vans are 50% cheaper and last longer than traditional vans.
In addition, electric vehicles also protect the environment. Shipping companies are increasingly demanding partners to use new, clean technologies. Adopting EVs ensures alignment with your partners and creates a more sustainable business vision.
The holiday shipping time is a critical time for couriers. To avoid the mistakes of yesteryear and ensure packages get to their destination on time, companies need to be proactive by identifying other carriers and communicating with customers as often as possible. New technology offerings also help achieve a significant operational footprint and operational efficiencies. These steps will help you navigate the most important season of the year now and into the future.
About the author
George Shchegolev is co-founder of Route4Me, a route planning and mapping technology company for last mile delivery.