Analyzing Shipping Performance Post-Peak Season
by Jaidyn Farar
Now that peak season has come to a close, your business is ready to move into recovery mode: handling returns, restocking, and planning for the rest of the year.
With everything you have going on, it might be easy to forget one crucial step: analyzing your peak season shipping performance. Digging into your shipping data is a great way to celebrate your wins and learn what needs to change before next peak season.
Fortunately, analyzing shipping performance isn’t difficult; small and large businesses alike can use the data they have access to, as well as customer and employee feedback, to get a full picture of their peak season fulfillment processes.
It all starts with knowing which KPIs to measure.
Measure your shipping performance with KPIs
Key performance indicators (KPIs) let you measure your business’s performance accurately and objectively. Numbers never lie! The following KPIs can reveal important insights into your fulfillment strategy’s success.
On-time delivery rate
On-time delivery rate is the percentage of orders delivered on or before the promised delivery date. Knowing your on-time delivery rate helps you assess the reliability of your shipping carriers and logistics operations.
On-time delivery rate = (number of packages delivered on time / total number of deliveries) x 100
Order fill rate
Order fill rate is the percentage of customer orders you can fulfill with the stock you have on hand (backorders don’t count). A high order fill rate shows that you can fill orders quickly, while a low order fill rate may represent lost sales opportunities.
Order fill rate = (number of orders shipped / number of orders placed) × 100
Shipping cost per order
Shipping cost per order is exactly what it sounds like: The average shipping cost incurred for each order you send. Understanding the cost efficiency of your shipping process is crucial for maintaining a healthy profit margin. It can also help you identify opportunities for cost optimization without compromising service quality.
Shipping cost per order = total shipping costs / number of orders shipped
To learn more about shipping cost optimization, see the section “Evaluate shipping costs” below.
Return rate
Return rate is the percentage of orders that customers return. A high return rate can indicate issues with product descriptions, quality, or fulfillment accuracy. After calculating your return rate, you can dig deeper into your data to learn which products are most likely to be returned.
Return rate = (number of products returned / number of products sold) x 100
Customer satisfaction (CSAT) score
Your customer satisfaction (CSAT) measures how satisfied customers are with your shipping and overall service. CSAT directly reflects on your brand's reputation and is reflected in the amount of repeat business you get.
Look for areas for improvement
While KPIs are one of the best ways to collect tangible information about the success of your peak season fulfillment, you should also take a step back to look at your processes holistically. Odds are, you’ll notice gaps that should be filled and inefficiencies that should be corrected.
Examine every facet of your logistics operations, including:
- Order fulfillment. What does your order fulfillment process look like from order placement to final delivery? Do certain steps take longer than others? This could indicate bottlenecks in those areas.
- Inventory management. Is your inventory management system accurate and up-to-date? Inaccurate inventory levels can lead to delays (and dissatisfied customers), especially if you have an omnichannel approach.
- Warehouse efficiency. Are there areas where picking, packing, and shipping could be streamlined? Consider optimizing your warehouse layout and workflows to speed things up.
- Carrier performance. How did your carrier(s) perform? How many late deliveries, damaged packages, or lost shipments did you see? While some issues are bound to happen, too many can be a sign of deeper problems you need to address.
- Technology integration. Were your ecommerce platform, order management system, and shipping software integrated seamlessly? Did the technology function as expected, with no outages or glitches?
- Packaging processes. Were your packaging procedures as efficient and consistent as possible? Could you optimize for faster and more cost-effective handling?
- Customer experience. How and when did you communicate with customers about their orders? Did your customer service teams respond clearly and quickly?
- Employee feedback. What issues did your logistics teams run into with fulfillment? Seeking feedback from key team members can help you catch issues you may have overlooked.
Evaluate shipping costs
Shipping costs are high, and they’re rising every year as labor and fuel costs go up. This presents a dilemma for business owners: Should you offer “free” shipping and take the financial hit, or charge customers for shipping? How can you optimize your operations to spend as little as possible on shipping without sacrificing the consumer experience?
The post-peak season months are the perfect time to look long and hard at your shipping costs. Determine what you paid for shipping and look at how it affected your margins. If you’re happy with the results, that’s great! If not, you’ll need to find a solution before next peak season hits.
To help, we’ve gathered some EasyPost resources that will help you better understand shipping costs and find innovative ways to reduce them.
- How To Calculate Shipping Costs. “Knowing how much it costs to ship your parcels is a critical component in pricing your products right.”
- Cheapest Ways to Ship Packages. “Choosing which carrier to ship with will depend on your unique shipping needs.”
- How to Save Money By Purchasing Online Postage. “By making shipping more accessible, efficient, and cost-effective, online postage is empowering businesses to stay competitive.”
- Hidden Ecommerce Fees Your Business May Not Be Aware Of. “We'll explore some of the most common hidden charges you'll find across your ecommerce logistics operations”
- 5 Ways To Stop Overpaying in Shipping Costs. “Here are some of our best tips to stop overpaying on shipping costs.”
In addition to a wealth of resources (our blog, podcast, webinars, and more), EasyPost offers a range of solutions to help businesses save on shipping. With the Shipping API, you’ll be able to print labels for free, access discounted carrier rates, track packages, automatically verify customer addresses, and more. It’s the perfect option for small and medium-sized businesses.
If you’re a larger organization looking for a tailored solution, EasyPost also offers enterprise shipping software and a shipping analytics platform to help you gain full visibility into your supply chain.
And if you need help analyzing your shipping data, our consulting services team within our Summit Advisory Team brand has extensive expertise both on the retailer/distributor side and working with B2B and B2C retailers and can support you with your improvement initiatives. We can help assess your current state as well as identify, prioritize and size improvement opportunities within your supply chain. Reach us at info@summitadvisoryteam.com to set up a free introductory consultation to work out how we can help.
Ready to learn more? Get in touch with us and we’ll show you how EasyPost can help.