FedEx and UPS’s newest peak surcharges, which began in July, have built-in increases taking effect in October. That’s right. October! If that doesn’t signal an extraordinarily early peak season, we don’t know what does.
There isn’t much time to wait if you want to be prepared for the parcel apocalypse, but we’d like to share a few pointers.
- Be prepared for delayed service. It’s simply inevitable. Order volumes far exceed carrier networks. But with a little proactive communication you can keep customers satisfied. This may mean adding an extra day of transit time across all orders. It also may look like incentivizing store pickup or access point pickup. With a transportation management platform and real-time visibility, you can predict delays and even offer an incentive for customers who are stuck in waiting. For instance, you can target regions where customers are experiencing delays and offer a discount as an apology for the delayed order. Or use automated carrier scorecarding to implement a blanket discount in areas where orders are frequently delayed.
- Keep your feet on the ground. Look into ground transportation over air-based options in order to maximize consistent deliveries. Recently, USPS made some substantial updates to their network in order to provide more consistent service. Mail volume is on the decline this year so ground transportation will be a more stable bet. By offering customers free ground shipping you can incentivize this choice and minimize reliance on two day or next day air service.
- Leverage regional carriers and mode shop. If you don’t want to pass the cost of major carriers’ peak surcharges along to your customers you should consider incorporating regional carriers and mode shopping into your strategy. With a TMS you can swiftly compare regional rates with the major players in order to decide the best service level to cost ratio for each shipment. You can also bring in rates from 3PLs to further expand your options. It might also be a good idea to consider shopping hundredweight parcel against LTL in order to meet service expectations at reduced cost.
The stakes have been raised for parcel shippers in 2021 and beyond. Unfortunately, even the major players have a lot of catching up to do. And while the coming peak season is an intensified experiment in supply and demand, it doesn’t have to ruin your business. The best way forward is with technology and the best time to implement new technology is before you need it.