5 Benefits to Moving to a More Regionalized Fulfillment and Shipping Model

As outlined in our recent blog, How COVID-19 is Shaping the Way You Ship, Now and Into the Future, the pandemic has acted as a time machine to the future as e-commerce demand increases at a rapid rate. In the US alone, online sales increased by an astounding 93% in May of this year—doubling the percentage from just one year ago. According to Accenture’s consumer research those who used online channels for less than 25% of purchases prior to the pandemic went from 1 in 20 of their purchases being online to 1 in 6—a 160% increase in online activity, considerably shortening the long tail of e-commerce adoption.  

While the future remains uncertain, one thing has become clear. E-commerce shipment volumes will remain high as consumer behaviour adapts and changes to an online shopping preference. Consumer online shopping habits have lasted long enough with the pandemic that they are now becoming habitual and convenient. Even when stores are open, it doesn't mean consumers will suddenly stop the convenience factor of shopping from the comfort of their homes however.  

So, what has the impact been on retailers? Supply chains have been, and will continue to be, accelerated to accommodate physical store closures and the 195% increase in click and collect order dollars we have seen this year. Demand for small, local warehouse space has also surged as brick-and-mortar stores convert into local fulfillment centers to accommodate an estimated 50% of deliveries being local by the end of this year.  

With the shift to a more local delivery model to accommodate the shift in consumer purchase behavior, having a more regionalized fulfillment and shipping model just makes sense. It also offers a series of benefits.

1. Faster delivery, high on-time delivery rates

When it comes to your customer experience, delivery plays a key role. With the large spikes in home delivery volumes on top of millions of packages large couriers already handle daily, transportation companies have had a difficult time handling the volume surges. The result has been shipping delays and no arrival time guarantees, which has made it difficult for you and your customers to track their package and have a clear understanding of when it will arrive. In turn it makes it difficult for you to maintain an exceptional customer experience across the full purchase cycle—from order, fulfillment and delivery. Adding a regional courier to your carrier mix offers a viable solution that oftentimes provides better delivery service level agreements that get your parcels to your customers faster. For example, ShipperBee beats the current industry average with a 99.7% on-time delivery rate.  

2. More cost effective than traditional couriers

With shipping fees increasing on what feels to be a daily basis, selecting a regional courier can typically be more cost effective. Regional couriers, like ShipperBee, offer simple transparent pricing, which is lower than traditional hub-and-spoke couriers because we don’t have hidden fees or fuel, volume and peak surcharges. Plus, with a simplified pricing and invoicing model, you’ll see fewer billing errors than you would with a larger courier with complex pricing. In turn, you’ll experience increased margins and eliminate the hassle of invoice reconciliation and corrections at the end of the month.  

3. Less packaging required, lower damage claim rates

When shipping with one of the courier giants, investing in stackable boxes to ensure they hold up in their trucks are a must. With ShipperBee, there is no bouncing from truck to truck across distribution centers, which means you don’t need to make that investment. Our drivers are moving small bundles of parcels safely on their journey in their unused vehicle space and transferring them across our Hive network. No heavy-duty boxes required, and you not only save on the cost of boxes, but the environmental impact associated with them. Plus, with our simplified network and the reduction of handling by people and mechanized sort equipment, you’ll experience as low as 1/30th of the industry average damage claim rate.  

We also always remind our customers to pack products with environmentally friendly packaging materials and in as small a package as possible. Don’t use a large box if a small box or a bubble mailer can just as easily get your product from A to B in one piece. Seems logical but I regularly receive shipments in a package that is not suitable or far too large for the items ordered. For more ways to reduce your shipping costs, download our eBook: 6 Ways to Reduce Your Business’ Shipping Costs.

4. Better approach to sustainability

Sustainability is one of the largest concerns amongst consumers today, and interestingly, products with sustainability claims generally outperform the growth rate of total products in their respective categories. Consumers are starting to demand it from their favourite brands. Even when sustainability isn't a personal priority, the psychology of using a purchase to do good is attractive to many consumers (we cover this in greater detail in our Three Ways to Deepen Customer Loyalty with a Sustainability Focused Brand Purpose blog).  

Selecting a regional courier like ShipperBee means you’re eliminating hub-and-spoke distribution centers from your shipping equation. We plot a direct delivery route for your parcels from your pick-up location right to your customer’s doorstep using our Hive network and crowdsourced delivery drivers. We’re able to dramatically reduce carbon emissions by up to 73.1% per parcel because we don’t have big trucks or large distribution centers. Check out our infographic: Eco-Friendly Shipping: ShipperBee vs. Hub-and-Spoke Carriers to learn how we’re reducing carbon emissions with our first-of-its-kind end-to-end delivery system.  

5. Improved shipping flexibility

Regional couriers build their entire business model around a geographic region. This enables flexible custom shipping solutions through more direct routes to meet customers’ exact needs. For example, a regional courier can accommodate more flexible shipping options such as a continuous ship model that offers multiple parcel pick-ups throughout the day or extended pick-up windows later into the evening—up to 10p.m. in some instances. Even with later pick-up windows, regional couriers still have overnight or two-day delivery capabilities because there is no hub to sort through.

As our new norm settles in, and little predicted to change with the shift to more localized shipping, having a regional courier can provide a series of benefits to both you and your customers. Give us a call to see how we can help you save money and the planet with our sustainability shipping solution.

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