Capacity shortages among parcel carrier companies have escalated concerns among eCommerce and omnichannel retailers. These businesses rely heavily on FedEx, UPS, USPS, DHL, and various regional carriers to deliver goods. When freight capacity for parcels falls short, associated delays negatively impact the buying experience for online shoppers. That’s why a parcel shipping strategy that relies predominantly on one preferred provider could be risky.
What Causes Parcel Carrier Capacity Constraints?
The biggest cause of capacity shortages for parcel carrier companies is obvious: the COVID-19 pandemic. A pandemic-driven eCommerce boom drove a 44% year-over-year increase in eCommerce sales. That amounted to millions of unexpected packages that parcel shippers had to move through the last mile. It caused them to limit service and even to stop accepting new customers for a time. The volume of orders, coupled with unavailability of labor to process and deliver those orders, upset the supply and demand balance in parcel shipping.
While these issues are subsiding as we emerge from the pandemic, they have not gone away completely. With peak season looming, many B2C companies are reevaluating their parcel shipping strategies.
The Benefits of Establishing Relationships With All Parcel Carrier Companies
Getting parcel shipping right can make or break your relationship with customers, who value fast, predictable deliveries. Though best practices suggest leveraging as much volume as possible with a single parcel carrier to gain more buying power, that doesn’t mean you should cut ties with other parcel carriers entirely.
Having a solid relationship with your primary parcel carrier partner is good. But keeping alternative parcel carrier companies in play is just smart business. Some of the benefits associated with using all available carriers include:
Getting the best possible rates
Some carriers may offer better rates in specific lanes or for specific types of service. Large fulfillment operations employ software solutions that can compare and contrast the various shipping costs for eCommerce across parcel carriers for each order. Using all parcel carrier companies also allows a fulfillment operation to monitor rates and services across each provider to identify potential cost-saving opportunities.
Avoiding capacity quotas
During high-volume periods, parcel carriers may cap the number of packages they will accept per day from an individual shipper. Since these capacity quotas coincide with high-volume shipping periods, they tend to get imposed at very inconvenient times for most online sellers. Established relationships with additional carriers keep your orders from backing up when you hit the daily limit at your preferred provider.
Accommodating customer requests
Individual customers sometimes request that the shipper use or exclude a specific carrier. By establishing relationships with all available parcel carriers, you can accommodate these requests from your customers and help to improve the delivery experience. A good customer experience translates into repeat purchases down the road.
Handling customer returns
Reverse logistics has been an ongoing challenge since the dawn of eCommerce. Unfortunately, not all carriers are good at handling returns in all regions. Having access to multiple parcel carrier companies to get returned items back to your fulfillment center helps streamline the eCommerce returns process.
Accessing specific carrier capabilities
Carriers often outperform their competitors in specific areas. For example:
- USPS delivers mail 6 days a week to virtually every home in America.
- UPS excels at ground transportation and delivery
- FedEx has the largest express air fleet.
- DHL has the broadest international reach.
- Regional carriers most easily handle same-day deliveries.
Consider all carriers when formulating your parcel shipping strategy. Using an optimized mix of carriers gives your fulfillment operation access to the broadest possible range of services and capabilities. If you are using a third party fulfillment company, like Amware Fulfillment, for parcel shipping services, it’s likely that they have solid relationships with all parcel carriers.
Your parcel shipping strategy should mitigate risk and disruption
The adage about putting all of your eggs in one basket is especially relevant for eCommerce shipping. Many things can happen that may cause service outages at a single carrier. For example, an employee strike at your preferred parcel carrier could effectively bring your fulfillment operation to a halt. On the other hand, having relationships with all parcel carrier companies allows a fulfillment operation to pivot quickly in the face of disruption.
At Amware Fulfillment, we work with all major parcel carrier companies and many regional parcel carriers. As a result, we understand how to utilize each carrier to its fullest, allowing us to get shipments where they need to go as cost-effectively as possible. Please get in touch with us today to see how a multi-carrier parcel shipping strategy through Amware Fulfillment could benefit your operation.
