As increased volume burdens national parcel carrier networks, shippers relying on small package shipping service face added complexity every holiday season. That’s especially if success depends on delivering a five-star customer experience in the retail realm.
Extra holiday hustle is nothing new in the parcel shipping space. This year’s late-summer advisories from the small package carriers are already threatening Santa’s sleigh ride before it begins. A shorter-than-normal holiday shopping season adds additional pressure on shippers battling to beat shipping deadlines and satisfy customers. With Thanksgiving landing on Nov. 28, shoppers have just 26 days between Black Friday and Christmas Eve to race their gifts through the small package networks.
Fortunately, shippers who maintain an optimized parcel program are prepared to pivot processes and protect the delicate balance between shipping cost and client service. Keeping that parcel program optimized benefits from a steady awareness of peak-season marketplace trends.
Last Day to Ship Deadlines
Holiday shipping deadlines vary across service levels and carriers. As part of their holiday parcel checklist, shippers should maintain an updated awareness of each parcel carrier’s “last day to ship” to ensure delivery by Dec. 24.
UPS has led the 2019 parade for announcing the holiday season’s last days to ship:
- UPS Ground: As early as Friday, Dec. 13 (for the longest shipments)
- UPS 3 Day Select: Thursday, Dec. 19
- UPS 2nd Day Air: Friday, Dec. 20
- UPS Next Day Air: Monday, Dec. 23.
It is very important to note that service guarantees are impacted significantly by peak season – especially a shorter one. The UPS service guarantee for Ground Shipments will be suspended Dec. 2-24. Three weeks before Christmas, there is no service guarantee. That does not mean your package will not be delivered on time if it beats the ship deadline, but can you afford to chance it?
To mitigate risk around this early deadline, explore promotional opportunities that encourage sales closer to the traditional black Friday shopping day – or before. The sooner you can begin to pull orders, the better your chances of navigating parcel networks in a timely manner. Chances are good you will not be alone among shouting a “buy early” message this holiday season.
Retailers and e-tailers using proper communication channels and full transparency about shipment capabilities can boost their consumers’ trust. After using your channels to encourage your promotional strategy, use those same channels to maintain the experience. Alongside order shipment communications, be sure to include package tracking numbers to avoid the “where is my order?” question. No shipper wants to be inundated with these costly calls during a peak season.
E-Commerce, the Amazon Effect and Shifting Shipping Volumes
Online sales continue to expand significantly. The U.S. Census Bureau’s monthly report for U.S. retail e-commerce sales continues to reflect a steady uptick, and with that comes an expanding volume of small package shipments. Last year, parcel carriers exceeded their projected delivery volumes of 30 million packages per day. This year, volume is already up – as much as 8 percent, according to UPS – and parcel deliveries could reach as many as 50 million packages per day. That’s a mind-boggling number of shipments to be handled primarily by UPS, FedEx, and U.S. Postal Service along with regional couriers and carriers.
The FedEx decision to sever ties with Amazon has significant impact across the network handling that increased volume. After the June move to end its contract on air deliveries, the FedEx decision to bypass renewal of its ground-shipping contract with Amazon signaled e-commerce volume shifts among the national parcel carriers. UPS will bear a disproportionate amount of that Amazon volume shifting away from FedEx, including many, if not all of the packages historically delivered by SmartPost and the U.S. Postal Service.
Even with expanded capacity, the move of those packages into the UPS network will cause ripple effects. As a best practice, shippers can again rely on strong communication to maintain their service levels on small-package deliveries, especially time-sensitive holiday shipments. Work with your carriers’ Account Managers to understand how your volume aligns with its network and capacity. Now is not the time to negotiate service, but communicating your needs is critical to avoiding a disruption.
Accessorials, Surcharges and Claims
Amid peak season volume increases, parcel carrier pricing structures are often complicated by accessorials and surcharges that, when unmitigated, can significantly impact cost-to-serve and product profitability.
UPS caught attention on Aug. 16 when it announced plans to forego additional peak season surcharges for residential deliveries during the 2019 holiday season. This is a change from past years, when peak surcharges were applied across the UPS service portfolio.
UPS Peak Surcharges applied to Over Maximum Limits, Large and Additional Handling packages have been modified by increasing the date ranges when these surcharges will be applied.
- Over Maximum Limits will have peak surcharges applied to an additional two weeks with a $85 increase over last year.
- Large Packages will have peak surcharges applied to an additional nine weeks with a $5.25 increase over last year.
- Additional Handling packages will have peak surcharges applied one week delayed in November and extended by two weeks at the end of peak season.
FedEx will not apply residential surcharges during the 2019 holiday season, however, FedEx’s 2020 General Rate Increase announcement included changes in the time period and amounts of Peak Surcharges for Oversize, Ground Unauthorized and Additional Handling.
- Peak Oversize Charge is in effect Oct. 21, 2019 – Jan. 5, 2020 and the charge increases $10 to $37.50 per package.
- Peak Ground Unauthorized Charge is in effect Oct. 21, 2019 – Jan. 2020 and the charge increases $285 to $435 per package.
- Peak Additional Handling Surcharge is in effect Nov. 18, 2019 – Jan. 5, 2020 and the charge increases $0.90 to $4.10 per package.
The Delivery and Return Experience
Effective delivery of your small packages relies on accurate, complete information from start to finish. From the dimensions and weight of your outgoing package right down to the specific street address, everything must be correct to control shipping costs. Shipping charge corrections and correction fees – and their frequency - are now part of costs assessed to small package shippers.
When dealing with an e-commerce audience where client base is not static, it is important to have the correct address cleansing software to make sure to validate addresses down to the street level. Facing a holiday time crunch, you do not have as much time to recover from an erroneous address and reship or correct the carrier’s delivery location.
Of course deliveries at their most basic level require fuel – and global events hold the potential to create sharp changes in fuel prices. Make sure to have a fuel mitigation program in place. Again, communication with your service providers is critical to avoid unexpected costs.
Maintaining a strong client experience relies on your service after the sale, including the returns process. Not done correctly, returns can create a huge problem for your operation and a poor process can significantly impact your customers’ loyalty. Conversely, every step toward making returns less painful will win points with customers.
A shipping solutions provider that specializes in returns consolidation efforts in partnership with the USPS is capable of achieving a low-cost method for fulfilling customer needs without adding undue complexity to the original shipment. Keep in mind everyone has a mailbox so including a return label and packaging instructions keeps a client from hunting down a drop location to ship out a return after the holiday.
Effective claims management is integral to the post-sale customer experience, an integral piece in achieving customer loyalty.
Effective Oct. 1 UPS modified details of its claims reporting procedures. Considering the timing, these changes will cut 30 days off the window for filing loss and damage claims.
- Any damage claim initiated on or after Oct. 1 must be submitted within 60 days of the actual delivery date.
- Any loss claim initiated on or after Oct. 1 must be submitted within 60 days of the scheduled delivery date.
- After the damage or loss is reported, if an inspection or investigation leads to an approved claim, the shipper still has none months from scheduled/actual delivery date to file documentation for claim payment.
When notifying UPS of a package that is either lost or damaged, written/email communications should include the tracking number, date of shipment and nature of loss or claim. This is more than a simple tracking request.
After giving claim notice within 60 days of scheduled delivery, you have nine months to file a claim documentation that includes invoice details.
Once again, maintaining communication through returns, service failures or claims positions you to maintaining loyal customers who can trust the partner in the sales process.
Partner in Planning
Parcel shippers mindful of their alignment with parcel carrier networks can be required to pivot their processes for a variety of issues that affect the small package space. Among these, industry and economic trends, holiday shipping deadlines and surcharge strategies should already be capturing shippers’ attention. So, too, should recent news announcements and under-the-radar procedural changes that could impact profitability for shipments that rely on parcel carriers.
Preparing your program to navigate peak season does not happen overnight. The work that begins today can position your enterprise to achieve parcel shipping success. While planning season has passed for your 2019 holiday parcel push, the lessons you learn and the information you gather this year is paramount to improving your performance in the future.
A partner deeply versed in market trends and the service capabilities of national and regional carrier networks is capable of engineering a parcel shipping program suited for the specific needs of your products and your customers. Enterprise Logistics Providers offering a technology platform that combines proprietary and industry-leading commercial applications alongside an expertise driven analysis brings shippers the tools required to deliver customer satisfaction in every shipment.
Our 2020 Rate Forecast and Impact Analysis delivers deeper detail that will help you begin budgeting for next year’s peak seasons. It also offers insight on hidden charges and alternative shipment methods that often go overlooked. Pre-order your rate guide and impact analysis HERE.