Every holiday season, major online retailers strive to efficiently manage their transportation operations in order to ensure on-time delivery for millions of customers—with varying levels of success. Having recently attended the Home Delivery World conference in Atlanta, I can assure you organizations are already expressing concerns about last mile delivery challenges this year’s holiday season will bring.
As your organization prepares itself to ship a high volume of online orders during the 2018 holiday season, keep in mind just how much how cooperation and collaboration can provide better forecasting and transportation capacity planning.
By being proactive, an organization’s transportation capacity process can achieve an on-time delivery rate percentage totaling in the high 90’s or more in the weeks leading up to Christmas. And that includes managing an inconsistent number of outbound trucks per day and multiple package sizes — spanning the gamut from small parcel items to heavy, odd-shaped bulky items which have traditionally been limited to in-store pick-up.
Two Crucial Steps to Achieving Near-Perfect On-Time Delivery
So what’s the best way for shippers to mitigate seasonal capacity crunches and achieve record on-time delivery rates for online orders?
1. Understand projected overall sales, particularly when each item will be marketed, building strong internal communications channels.
- Clear, open communication between operations, marketing and finance (facilitated via regular bi-weekly or monthly meetings) prove essential for reviewing current financials as well as upcoming operational goals or events that your finance team needs to have on their radar. As the season progresses, reviewing weekly forecasts ensures projections are within an agreed margin of error and can be adjusted accordingly as business changes arise. These steps better align your projected shipping demands with available carrier capacity.
2. Manage carriers to their capacity commitments and adjust the transportation capacity forecast based on actual performance results, leveraging daily metrics.
- In order to be successful, you must hold yourself—and your carriers—accountable. It’s imperative that you conduct daily morning meetings to review the previous day’s performance and current day’s projections. By monitoring and reviewing daily total loads against capacity commitments (exposing where daily needs consistently outpace the committed capacity), you’ll quickly identify potential problems with carriers who may be struggling to cover all the loads, resulting in delays. The sooner you can alert carriers to capacity requirements, the better chance you have of them filling the gap. This step also ensures you’re working with reliable carriers who will honor their commitments and avoid giving their capacity to a squeakier wheel.
During seasonal peaks, organizations find it very easy to fall behind on deliveries, especially when demand is peaking. Don’t let yourself fall into the seasonal trap. Stay in front of the wave or it will drown your operation. With ever-increasing competition, a retailer’s reliability and on-time delivery now defines customer experience, and no one can afford to take a hit in consumer loyalty. Delivering on your promise dates is no longer a differentiating factor, it’s the top requirement for doing business in the ecommerce space.
By implementing these simple tips, you can enable your operation to be even more successful and ensure your customers will return to shop with a company they can count on to deliver on their commitments.
A senior manager in the Chainalytics’ Transportation competency, Bryan Wyatt has over 20 years of experience and expertise in transportation operations, strategic sourcing, data analysis and logistics planning, as well as logistics/supply chain change management.
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