At October’s mid-point, shippers and shoppers are intensifying their holiday activity ahead of a historic holiday peak season.
A later-than-usual Thanksgiving on Nov. 26 condenses the shipping season by almost a week. Meanwhile, continuing effects of COVID-19 drive more buyers online to fill holiday wish lists – and many of them will avoid the personal contact of store shopping altogether.
Combined, these factors predict a capacity crunch for the small package networks. Already experiencing service delays and disruptions, these networks will not see relief until after the New Year, even as parcel carriers bring on thousands of new workers.
Be mindful of the “last shipping days” announced by UPS and FedEx, but that may not be enough to avoid a disappointed holiday customer in 2021. That’s why the world’s largest retailers are turning the holiday shopping clock from Black Friday toward a “Black October.”
Navigating this year’s peak season during the middle of a pandemic will require companies to be more creative and flexible. Forward-thinking shippers should be prepared to adjust.
Retailers Drive Christmas Creep, Protect Experience
Amazon’s Prime Days on Oct. 13-14 delivered $3.5 billion in sales to small- and mid-sized businesses, with a 60 percent uptick in sales over last year. The move expedites holiday shopping – and product shipping. It also adheres to latest guidance from UPS: “encourage your customers to shop earlier than ever with special offers or other incentives.” FedEx echoes the same advice for shippers preparing for the 2021 holiday season.
Promotions like Walmart’s “Big Save Days” and Target’s “Deal Days” are all designed to pull parcel volume forward and avoid a costly catastrophe caused by a lack of capacity in December.
If your organization is focused on protecting customer experience this holiday season, keep these five things in mind:
- It is more important than ever to make sure that you proactively and clearly communicate the potential for delays. Every year the national carriers suspend their on-time guarantees during the holiday period. Earlier this year they suspended the guarantees due to COVID-19 complications and disruptions.
- Retailers can ship-to-stores for curbside pickup.
- Retailers can also ship-from-stores to shorten the distance that the package travels in the carrier’s networks and thereby reduce the potential for delay.
- Shipments can be made to alternative delivery locations such as certain retail partners, your customer’s office, or to one of the many parcel lockers
- Finally, if you operate multiple DCs across the US, it will be important to have the right inventory at the right locations to speed delivery and avoid split orders.
In a time where lockdowns have driven e-commerce shipments to levels never seen before, companies will need to deploy an all-of-the-above strategy to navigate it appropriately.
Know the Last Days to Ship
Now more than ever, it is important to make every possible effort to avoid deadline shipments. If you anticipate a last-minute holiday rush, make sure your UPS shipments go out on or before these dates to give your parcel the best possible chance to arrive by Dec. 24:
- UPS Ground: As early as Tuesday, December 15*
- UPS 3 Day Select®: Monday, December 21
- UPS 2nd Day Air®: Tuesday, December 22
- UPS Next Day Air®: Wednesday, December 23
*Note UPS advises that most UPS Ground shipments have a later “last recommended shipping dates.” Shippers can track their transit time and cost here.
Regardless of the service provider you trust with your shipments, through full transparency and good information, you can effectively manage customer expectations while also syncing with the carriers that will deliver the goods to their doorsteps.
You Shipped it – Did it Make Money?
Protecting customer experience this holiday season will require timely shipments and thorough communications throughout the sales cycle.
Protecting your organization’s profit while responding to these customer expectations requires additional awareness and proactive measures.
- Be aware of the Peak Season Surcharges and more importantly the differences for UPS, FedEx, Regional carriers and now the USPS.
- Perform a detailed analysis to estimate the surcharges financial impact and to mitigate any negative effects on profitability.
- Identify specific SKUs that will be negatively impacted and make decisions regarding those items to protect profit margins.
- Raise the cost of the item.
- Increase the free shipping threshold.
- Pass some or all of the additional cost to the customer.
- Ensure carriers agreements are best in class and that invoices are audited for compliance to them.
- Make sure you have the right box sizes so that the packaging is only la
rge enough to adequately protect items during transit.
- Work to eliminate operational errors that create avoidable costs such as incorrect addresses, unnecessary declared value and unauthorized packages.
To help shippers protect profit on every customer and every order, we created “You Shipped it … But Did You Make any Money.” Open it today for more guidance on making sure your peak season ends in the black.
Our team of parcel experts offer more guidance for navigating peak parcel season in a recent roundtable. Listen today for tips that will help you monitor and manage parcel surcharges and the litany of hidden costs that jeopardize your performance alongside the looming threats to customer experience. Join us for our next SME Roundtable when we’ll deliver multi-modal forecasts and analysis for 2021.