Three Transportation Missteps You Don’t Want to Make

GMT’s fifth annual Benchmark Report, The Impact of Brand Strategy on Parcel Transportation, is here. And there’s a lot of data and insights to explore, ranging from influential industry trends to strategic best practices that can be applied to a variety of supply chain obstacles.

Our purpose with the report first and foremost is always to provide a convenient and helpful benchmark document to parcel industry shippers, furthering your success to continue the success of the industry. With that same spirit in mind, we thought it might be helpful to breakout three key takeaways we saw in this year’s Benchmark Report.

Don’t sacrifice profitability for fast order fulfillment

As in past years, Fast Order Fulfillment (FOF) is top of mind for everyone. And we mean everyone. Benchmark survey participants ranked FOF their #1 strategic focus and also their #1 internal challenge. On track with a year that saw the Big 2 announce competing and future plans to support 7-Day and Weekend Delivery, as well as COVID-19’s increasing transit time disruption across the transportation industry as a whole. Yet, the Benchmark Report also reveals a middle-of-the-road trend for shippers – where Same-Day Delivery and Deferred Delivery (4-7 days) are shrinking, while Express and Economy (between 1-5 days) are the majority, with an emphasis on around three days transit time. The cost equation between meeting rising consumer demand for fast shipping and creating a parcel network that can support such FOF is no secret challenge, and this year’s Benchmark Report is clear – don’t sacrifice the profitability of your existing parcel network for outrageously fast shipping. Find a balance that works best for your brand strategy and parcel network.

Don’t ignore regional carriers

Though the Big 2 are still the Big 2, the Benchmark Report reveals continued growth for the use of regional carriers, with more than half of survey respondents planning to increase their use of regional carriers. Why? Regional carriers present a unique and affordable opportunity to influence or implement FOF strategies, as they can often reach your end consumer much faster than traditional routes. And that’s important when you are shipping temperature dependent items, such as food and groceries. Especially in the wake of COVID-19, we have seen many businesses equip and utilize regional carriers for continued success or survival.

Don’t avoid the challenge of Omnichannel

Five years ago, in the 2016 Benchmark Report, we found that less than 27% of respondents were implementing an omnichannel strategy within their distribution network, while a nearly 47% majority operated the inventory of their brick-and-mortar and e-commerce stores separately. This year’s Benchmark Report finds that a new majority (45%) now operate under an omnichannel strategy, and those managing physical and online store inventories separately has since declined (now 38%). What does this data tell us? Though a substantial number of shippers are still managing their inventories separately, omnichannel implementation has seen significant growth in a relatively short amount of time. The success, challenge, or lack of an omnichannel strategy can also greatly influence this year’s top four strategic priorities ranked by shippers: 1) fast order fulfillment, 2) differentiation of brand and product, 3) order fulfillment / returns profitability, and 4) product price competition. It’s been generally accepted for some time now that the need for a holistic inventory management strategy would only continue to increase as technology advances alongside rising consumer expectations for faster and free shipping. The impact of COVID-19 highlights this need for the industry further.

Check out the full 2020 Parcel Benchmark Report for a closer look at these parcel industry insights and more.

About GMT’s Parcel Benchmark Report

Each year, we partner with the Cleveland Research Company to survey some of the world’s largest and most complex parcel shippers with the purpose of yielding data-based insights around industry defining trends and strategic best practices, all combined in a convenient and straightforward document: our annual Benchmark Report. Survey questions are intentionally designed to gain understanding into the underlying strategic practices of respondents, while also obtaining a gauge for what trends the respondents feel are most prominent in the industry, as well as their confidence in the marketplace. To ensure quality data, we seek responses from a targeted mix of consumer/retail and industrial businesses. Specifically, this year’s Benchmark Report saw a 47% majority from retailer/distributor respondents, with over 50% of respondents spending $51 million or more on parcel transportation.

Cameron Elliott is Brand and Content Manager for Green Mountain Technology.

Three Transportation Missteps You Don’t Want to Make

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