According to consumer research firm FTI, e-commerce sales are expected to top $1 trillion USD by the end of 2022, with a slight retail market share drop to 22% from its 24% peak in mid-2020. Even as e-commerce growth slowed earlier in 2022 from 10% to 7%, the firm cautioned that sales would slow for the balance of 2022 due to inflation and other economic factors.
Rising carrier rates and fees, fluctuating carrier capacity, record low warehouse vacancy rates, and labor shortages further complicate shippers’ lives – whether omnichannel retailers, online sellers, or 3PLs.
The ability to scale shipping operations efficiently and flexibly without overextending staff, space, or capital while preserving individual order margins, is critical in today's challenging shipping environment, decades-long e-commerce sales growth, and recent market and carrier capacity uncertainty.
Don’t let growing pains curb final-mile parcel volume expansion. Look to the practices, processes, and technologies that will handle rising shipping costs and capacity concerns today and allow for profitable scaling tomorrow.
5 Things Growing Warehouses Can Do to Responsibly Scale Parcel Shipping
1) Expand carrier selection
To keep up with the demands of increased shipping, while delivering the best shipping experience as order and delivery volumes grow, takes more carriers and carrier services. This allows shippers to choose the best carrier for that region or product and insulates them against individual carrier capacity constraints.
2) Adopt an omnichannel fulfillment strategy
With increased need for carriers comes higher demand for increased shipment distribution points. By utilizing strategically located distribution points – including storefronts – retailers can cut the distance and time it takes to get items into customers' hands, saving money. This is especially necessary as consumers grow accustomed to same-day, next-day, or two-day delivery.
3) Automate multi-carrier, multi-location decision making
More carriers and more distribution points add complexity to the fulfillment process and decision-making. Ensure that you choose the correct carrier based on the route, rate, and service by implementing business rules that direct the order to the best inventory location. Use the best carrier and carrier service based on cost, time-in-transit, delivery expectation, and historic carrier performance.
4) Centralize shipping data and manage all carriers on a single platform
The ability to access information from past experiences and current customers and carriers can help you keep costs in line, maintain productivity, and put systems and habits in place to propel growth. Managing your carriers on a single platform not only avoids data silos but can limit training needs and reduce error-prone manual entry that lessens productivity and costs customers.
5) Leverage data and reporting to improve delivery performance
All the information needed to adjust your operations effectively must be easily found and digestible. Composing the data quickly and accurately into actionable reports reduces the time it takes to find the information, thereby increasing the time to act upon it, boosting productivity and profitability.
Mark Picarello is Managing Director, Pierbridge, WiseTech Global US. Founded in 2004 by an experienced executive team with a proven track record of success in the transportation software industry, Pierbridge has fundamentally transformed the way businesses deliver goods to their clients through innovations in their leading-edge final-mile management solution, Transtream. In 2018, Pierbridge became a part of the WiseTech Global group. Download our Final-Mile Shipping Guide to learn more about successful parcel growth with the right technology, procedures, and planning.