It’s right around the corner, and you’d better have a plan if you’re looking to make it through. Our own Bryan Wyatt spoke with Danny Barfield from eTrac on their The Final Mile podcast about what companies need to have lined up to deliver the rush of orders coming your way.
Depending on who you ask, the 2020 peak season is either just around the corner, or it’s actually already here. E-commerce shipments are already at record highs as a result of the COVID-19 pandemic. Many shippers, 3PLs, and freight forwarders are now dealing with insufficient courier capacity and rate surcharges, further complicating last mile delivery.
Is it too late to secure additional courier capacity? Can you move from one of the big three carriers to a multi-carrier system? How will you get your orders to their destinations when you can’t count on your primary carriers to have the capacity you’ll require?
What should you really be worrying about?
As we head into this year’s peak season, things have changed dramatically compared to 2019. COVID-19’s impact on consumer buying behavior has already strained e-commerce delivery capacity, particularly in the final mile. On top of all this, FedEx, UPS, and the Postal Service have indicated that not only won’t they be adding capacity, but they’ll also be raising rates. All of this makes finding additional courier capacity a top priority and, given the time remaining, a tricky proposition.
You need to add capacity. What does that look like?
If your company operates a fleet, you have the option of applying dynamic route optimization technology to maximize the use of your existing capacity and ensure none of it goes to waste. But, if like many companies, you depend on one of the big three – in order of volume: USPS, UPS, and FedEx – you’re going to have to look outside that trio.
For many shippers, the best place to start is a 3PL. They can provide help with the upstream supply chain that will support going directly to the final mile – bypassing the UPSs of the world – something akin to what Amazon has done with their forward-sortation facilities. A 3PL can provide that sortation capability and then offer last mile access as well. Alternatively, if you have an in-store fulfillment program in place, you can directly approach last-mile providers. In the end, you’ll need a diversified approach that can take advantage of all the options available to you, combining available fleet capacity, 3PL support, direct access to last mile couriers and even the crowdsource model to secure required additional capacity.
While the short time horizon makes some of these options problematic – pursuing 3PL and crowdsource integrations are your best options under these conditions – these capacity issues are not going away and all options need considering as the need for additional capacity will continue to grow indefinitely.
While we’re on the subject, what’s all this going to cost?
With “free shipping” being one of the pillars of e-commerce success, the quest to keep delivery costs down is paramount. So, many vendors have side-stepped regional carriers and last mile alternatives after deeming them too expensive. Surely you have had the same concerns. But, in light of recent and coming rate increases, smaller regional carriers and last mile delivery providers can be just as cost-effective while potentially providing a superior customer experience.
Can you really keep up with your shipments as you add capacity?
Visibility and shipment tracking is not optional as even the most casual e-commerce customer (of which there seem to be but a few) has grown accustomed to being able to track their shipment on a moment’s notice. This makes it imperative that you keep the necessary level of visibility in place when you start working with a new carrier. You can’t overlook this; it needs to be an issue that’s addressed at the start of any potential carrier relationship. This is where a system like eTrac will help you align systems and maintain the levels of visibility your customers insist on.
Where do we go from here?
This is the start of a new era. Consumer buying patterns, already in a steady process of transformation over the past two decades, have been kicked into high speed by the pandemic. There is no going back. Valuable lessons will be learned in the process of adapting to this new environment, and the great supply chain leaders will be those who will remember and internalize these lessons. Others, sadly, will be doomed to repeat them.
You can listen to Bryan and Danny’s full conversation on your favorite podcast app, including Apple Podcasts, Google Podcasts, and Spotify.
Danny Barfield is Executive Vice President at eTrac, helping companies save time and money as they reach the last mile. With over three decades in the industry, he’s worked in carrier management, technology, operations, and sales for Datatrac, FedEx Freight, Dynamex, and more.
Bryan Wyatt is a Principal in Chainalytics’ Transportation consulting practice with over 20 years of experience and expertise in transportation operations, strategic sourcing, data analysis, logistics planning, and logistics/supply chain change management. Bryan was named a 2020 Pro To Know by Supply & Demand Chain Executive, and he is an instructor at the Georgia Tech Supply Chain & Logistics Institute.
