Seven Common Shipping Blunders & How to Avoid Them
by Jarrett Streebin
Navigating the world of shipping can be hugely complex. From finding the right carriers to ensuring that packages are delivered promptly, there are plenty of moving parts that can go wrong. Understanding common shipping pitfalls can significantly aid your company’s shipping strategy and catapult you toward lasting success.
Here are some of this year’s top shipping mistakes to avoid.
Centralized inventory
Striking the right balance among demand, dynamic customer preferences, and a sufficient supply of materials and goods is one of the most important parts of mastering your shipping and logistical needs. Inventory management is even more critical if your customers are spread throughout the U.S. and beyond.
It makes sense for small businesses to rely on centralized inventory from a single warehouse, but that strategy can quickly become inefficient for larger companies shipping high volumes of packages across broad areas.
By distributing inventory across multiple store locations, or tapping into regional fulfillment centers, retailers can get inventory closer to the customer, with faster and cheaper delivery. In the age of curbside pickup and same-day delivery, multiple inventory locations increase a local customer’s ability to pick up orders or receive same-day delivery.
A limited number of carriers
There’s no denying that large national carriers can help increase a retailer’s operational efficiency. But when was the last time you evaluated your carrier mix to see which options exist? You’re likely tapping into national carriers for around 80% of your freight volume, but you might have difficulty with the remaining 20%. With 97% of U.S. truckload carriers operating with 20 or fewer trucks, it can be difficult for large carriers to deliver to niche locations.
Companies should evaluate their parcel programs regularly to ensure they’re maximizing capacity, speed, and cost. Carrier diversification and the use of smaller, regional carriers can help you deliver efficiently to remote locations, in addition to ironing out issues surrounding inconsistent demand and short lead times.
The use of a third-party logistics (3PL) provider is an ideal way to begin incorporating multiple carriers into the mix, increasing shipping elasticity and transportation options. You’ll be able to maintain a single relationship with the 3PL while it works directly with national and regional carriers on your behalf.
On-premise or outdated technologies
Advanced technology has infiltrated every industry imaginable, and the shipping industry is no exception. Modern inventory management systems, application programming interfaces (APIs), and other cloud-based systems offer long-term benefits in the logistics and shipping space. Companies today have no choice but to keep up with the pace by leaning on this technology.
If you’re currently using outdated technology or technological systems that don’t communicate with one another, the result could be miscalculated shipping times, inconsistent consumer demand, and automation issues. Such problems ultimately taint consumers’ experience with your brand, potentially discouraging them from placing future orders.
Modern shipping technology can lay a strong foundation in harnessing data, leading to optimized routes, external systems integrations, faster fulfillment, more automated tasks, and overall reduced inefficiencies.
Lack of shipping data
From finance to healthcare, big data is an ever-growing part of industry operations. As ships and trucks make deliveries, they provide data that are aggregated into cloud technology and can be utilized to help shippers adapt quickly to new environments.
Big data in the shipping industry can:
- Reduce shipping decisions made on intuition and instead focus on fact-based decisions
- Provide a 360-degree view of shipping operations to pinpoint inefficiencies and provide real-time information on parcels
- Help you understand carrier performance and assist with carrier negotiations
- Anticipate trends to help you understand operational issues
- Increase automation and customer satisfaction
The use of big data is still in its infancy, but the benefits are already apparent.
Blind delivery offerings
Companies like Amazon.com Inc. and Target Corp. have changed the way consumers shop online, with expectations rising and attention spans shrinking. Roughly 56% of online shoppers between 18 and 34 expect same-day delivery, while 61% are willing to pay additional fees for that option. Over a quarter of shoppers are even willing to abandon their shopping cart if same-day delivery isn’t available.
Same-day delivery is becoming an increasingly popular option for retailers, as over half (51%) of retailers are now offering it. Before you completely rethink your logistics and shipping approach, weigh the pros and cons of same-day delivery for your business.
Consider the logistical hurdles associated with same-day shipping. If you can’t quickly make changes to the route or contents of the package, wait times for consumers will be even longer. Finding last-minute truck space can also be a nightmare and extremely expensive. Plus, are you selling products that need to be delivered on the same day, or can your customers wait a day or two longer?
Understand what your customers value, to gain meaningful insight on the need for same-day delivery. Do they prefer free delivery instead? Are they passionate about environmental issues, to the point that same-day delivery would turn them off? Is same-day delivery going to harm your reputation if you can’t keep up with the fast pace?
Closely examine your operational capacity and customer base before blindly offering same-day shipping.
Inaccurate weight or classification
If you classify a single package incorrectly, it isn’t a huge financial loss. But multiply inaccuracies across hundreds of thousands of packages and you’ll quickly realize how expensive this problem can be. Shippers want to send packages as cheaply as possible, but forcing packages into inappropriate weight ranges or classifications will only cost more in the long run.
The choice of the correct weight and speed can also impact the safety of each shipment, as it helps ensure that trucks are properly loaded, with weight evenly distributed throughout. Take the time to accurately weigh shipments and classify them properly for consistent and affordable deliveries.
Wrong shipping addresses
This also results in out-of-pocket costs to the shipper. Even the smallest change in the package’s zip code, state code, and the like can have a huge impact on cost, especially if the package is being shipped internationally.
Triple-check that each package is properly addressed, to save money and uphold your brand’s hard-earned reputation.
Peak shipping season is right around the corner. By addressing current weak points in your shipping approach now, you can make for your most successful shipping season yet.
This article was originally published in <i>Supply Chain Brain</i>.