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It’s Time to Shake it Up… Your Courier Mix That Is!
We all know 2020 was a year like no other. It felt extreme, many of us would like to delete it from our history, and some of us saw it as a year of transformation. Regardless of how you summarize last year, there is one word that summarizes what it was like for those of us that ship products or are in the shipping industry — unpredictable. From unprecedented parcel volumes, delivery delays, abolishing on-time delivery guarantees, volume restrictions and new surcharges driving shipping rates to new heights, it has been unpredictable indeed. The whole industry has been learning and adapting to this new reality on the fly.
As we enter 2021, nothing is going to change in the near or long-term when it comes to consumers going online for their purchases and requiring delivery. The pandemic continues, which means so does the chaotic spike in the demand for the delivery of goods. Even when the pandemic is over (boy, wouldn’t we all love for that day to be here!), there is an expectation that the shift to e-commerce will become one that is permanent as consumers adopt and adapt to their new online buying habits.
There is one underlying challenge with the increase in business for e-commerce though. The major delivery companies have struggled with unprecedented parcel volumes as outlined above. The losers are the businesses relying on these courier companies to be an extension of their customer experience and provide affordable shipping rates that help them remain competitive in what was an already difficult climate.
This year it’s going to remain critical for shippers to really evaluate their courier mix to maintain that competitiveness and make their delivery an extension of their brand and product experience. The key is to diversify your courier mix. Just like you diversify your investment portfolio, there are a variety of good reasons to diversify the couriers you use. A strong strategy and a diversified courier mix can help to lessen overall transportation costs, increase delivery speeds, and protect your brand from major spikes that may affect your business—like the pandemic.
Shippers who currently use a single courier strategy or national couriers are struggling with a variety of pain points and risk failing their customers. Here’s why:
Does the thought of mixing up your couriers cause you to cringe? We get it! There are some common misconceptions out there that makes even the strongest stomach feel weak:
While national carriers have name recognition and larger volume, regional carriers like ShipperBee have smaller density and operating exposure, and therefore have less room for error. Because regional couriers like us are bound by a geographic region, speed is on our side when it comes to fulfillment. With a regional focus, we can send shipments faster, focusing on getting items to every destination on-time with less delivery delays.
Just because you offer high volume to your courier doesn’t mean that you will get more value. If delivery volume is greater than capacity, it may be more expensive to run shipments, especially because couriers do not want to reposition their trucks at the origin or destination.
As a general rule, if your team is shipping more than $15,000 each month in parcel volume, it is worth at least going through the exercise to understand if you can get lower rates with your couriers by leveraging account specific pricing, or if you can add on new couriers to get better deals.
Regional couriers can achieve faster delivery times in their respective regions at a lower cost, giving your customers better customer service. Specialized providers have core competencies in their regions which means that they can achieve faster transit days at a lower cost for parcel shipments. As mentioned above regional couriers not only offer lower shipping rates, but also have simple, transparent, flat rate pricing that don’t have any hidden fees or surcharges.
There are a lot of reasons why brands should look diversify their couriers. Here are a few:
Throughout 2020, on-time delivery rates have fallen, and couriers have removed their service guarantees. Some vendors have reported a 40% increase in delivery times during the pandemic. While couriers have been increasing capacity, they can still become overloaded at times. We can expect the uncertainty to continue for the foreseeable future.
The good news is that regional carriers have been less prone to disruptions. They can often circumvent tangles at the major hubs are key to lowering shipping costs and making good on your delivery promises. Adding more regionals to your courier mix this year, sooner rather than later, is a smart idea. There will be a mad rush in new courier onboarding directly after peak season as couriers become open to signing on new customers, so don’t wait until the last minute.
Major carriers have already and continue to announce new surcharges and volume caps as they cope with unprecedented demand. If you exceed your quota, you could be looking at even higher costs, including fines or even contract termination. This is one of the most persuasive arguments for adopting a multi-courier strategy. In today's environment, shippers benefit greatly from the flexibility that allows them to quickly find the best rates and options while maximizing their negotiated discounts and avoiding surcharges and capacity limits whenever they print a label.
Customers are relying on shipping more than ever before, and customer experience is now synonymous with the brand and product experience. While most customers do understand and forgive delays during the pandemic, 84% are unlikely to purchase again after just one poor shipping experience.
Note that it’s not just the younger generations saying goodbye after a poor shipping experience. Older generations are learning to trust online retailers more, and Boomers, at 23% of the population, still control about 70% of all disposable income. In fact, 47% plan to increase their online shipping ever after pandemic restrictions ease. So as this generation continues to adapt to e-commerce, it’s important to exceed expectations early on in order to build loyalty within the group.
Customers of all ages want transparency in all phases of the buying process, however. They want to know what's in stock, where, and they want to choose the most convenient delivery options. Free returns are a primary motivator as well. Shipping and logistics are now an essential way to set your brand apart and build loyalty.
Without the ability to rate shop and seamlessly choose between options in the event of a disruption or overload, your profitability and brand reputation will remain at the mercy of unexpected events and the whims of the major couriers. But it doesn't have to be this way. Contact us today to see how you can reduce your regional shipping costs, boost margins and deliver a better customer experience.
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