While business is booming for carriers and many shippers during the COVID-19 pandemic, the carriers are not able to fully provide the capacity needed to deliver packages on time. In the second quarter, FedEx’s on-time shipment rate was 92.2%, and UPS’s rate was 95.2%. For USPS, the on-time delivery figure was 92.6%. That rate may sound better than expected, given that the big carriers suspended delivery guarantees during the pandemic, but those UPS and FedEx shipping delays are costing some shippers their customers and some business. Shippers are certainly increasing the time spent managing shipments, tracking, and dealing with customers not happy with Fedex and UPS shipping delays.
Larger companies rely on larger carriers, while smaller ecommerce businesses rely on the USPS more frequently. The delivery delays and other hiccups with the USPS led to eBay recently announcing that they were looking into other delivery options for their sellers.
Sales from consumer packaged goods (CPG) companies skyrocketed during the pandemic, both to stores and direct to consumer (DTC). In June 2020, 87% of nonedible CPG sales were sold to consumer households, at a cost of $7 billion. Edible consumer CPG products clocked in at $1.4 billion in sales. If fewer of these deliveries are making it to their destinations on time, that hurts CPG businesses.
Causes of Late Delivery
Many parts of the supply chain can develop a bottleneck, resulting in shipment disruption. That includes current events, labor or worker supply, customs issues, transportation problems, weather, manufacturing or supplier issues, to name a few.
The pandemic heightened many of these problems. China, which produces a lot of goods for export, shut down their factories, production, and ports in the spring, to contain their COVID-19 spread. That caused order delays of medical supplies and other essential items that made the news. As other countries shut down, including the U.S., transportation was affected. More cargo came on container ships since there were fewer flights into the country.
Amazon warehouses started hiring more workers, as they had increased demand from online shopping; people stopped going to physical retailer locations. Amazon was already increasing the use of their own couriers for delivery, partly so they wouldn’t have to rely as heavily on the big carriers and USPS.
9 Ways to Avoid Delayed Delivery
Whether you plan to continue using the same carriers or want to make a change, here are 9 tips to minimize your carrier shipping delays.
1. Meet the cut-off time
Carriers typically have specific shipping times and if your warehouse is late in fulfillment, the carrier won’t pick them up that day and the goods will be delayed. Since the carriers are overwhelmed with distribution center pickups as well as consumer deliveries, consider preparing the parcels earlier, if possible.
2. Communication with customers
Customers understand when it’s not your fault that there is a shipping delay. However, communicating with them to share what you’re doing about it helps. A phone conversation is the best way, so there are fewer misunderstandings and they can interpret your caring tone, rather than relying on an email. Express understanding to a loyal customer that the shipment delays are frustrating for you as well, and brainstorm or offer potential solutions. Listening and providing this type of customer service is a great way to retain valued customers.
3. Offer free shipping and discounts
While customers don’t like delays, they do like free shipping and are often willing to wait longer if they’re not paying the carrier bill. You’ll get more leeway in your order delays if the customer is not forking out for shipping costs; they won’t expect the same level of service or delivery standards. You can also offer discounts or freebies for the order. If you don’t give free shipping for everything, you can lower the free shipping threshold. Or you can offer flat rate shipping, which costs them less than they would normally pay. Offer this as a pandemic special, noting that you are cognizant of the difficulties that delivery delays cost your customers. It may cost you something on the front end, but the customers will appreciate it and stay with you longer on the back end.
4. Shipment tracking
If you are not closely tracking your shipments, now is the time to do so. Understanding the longer shipping times and staying on top of them should be a priority. In addition to communicating with your customers, you should ensure they have access to the tracking information as well. These ecommerce shipping best practices can save you from customer disloyalty.
5. Ensure correct delivery information
Keeping your customer address delivery information accurate reduces the likelihood of significant delays and also decreases shipping charges. Carriers add accessorial fees for incorrect address information and repeat deliveries. Both can be avoided by using the correct address. Software can help you check the address; including a customer phone number can help as well.
6. Choose an alternative shipping method
Just as eBay is looking into using different carriers, your company can also investigate an alternative shipping method. Perhaps a regional carrier can make delivery guarantees the other carriers can’t, and can reduce or at least match the costs. Carriers may be willing at this time to renegotiate their contracts as well, to keep you as a customer. Shipware can help you do that with our in-house experts on parcel contract negotiation. They are former carrier executives and know what it takes to change the contract in your favor. For shipping consulting, reach out today.
7. Adding domestic suppliers
Shipping your product from China or other countries is more of a risk in the pandemic. There’s a lot of talk about near-shoring and domestic manufacturing, to get suppliers closer to their valuable customers – like you. Finding a domestic supplier can reduce delayed shipments caused partly by overseas transportation, and you can avoid the customs fees that come from purchasing from abroad.
8. Work with your supply chain
Just as it’s important to communicate with your customers, it’s important to communicate with all parts of your supply chain. Keeping the lines of communication open can alert you to any supplier issues with procurement and raw materials, manufacturing issues, anticipated delayed delivery of products, and anything else that affects customer service and your supply chain. Together you may be able to find solutions that one segment alone wouldn’t find.
9. Guaranteed refunds for service
So this is not a pandemic promise from the carriers. In this difficult time, UPS and FedEx are not offering their usual promise of money back if the delivery isn’t on time. But hopefully, it will be back in the future. And when it is, Shipware is ready to help you take advantage of it. Shipware’s parcel audit recovery service is an automated program scanning your carrier invoices for all guarantees, missed service levels, and erroneous charges from accessorial fees.
Shipware offers invoice audit recovery services at no charge unless the shipper saves money. The program is funded with the savings, so if you don’t save, you don’t pay. Even without shipper guarantees, there’s money left on the table as 1% to 9% of carrier invoices have mistakes in them. More than $2 billion of eligible refunds go unclaimed by shippers each year because they don’t know what to look for, or their manual audits are ineffective. Call us today at (858) 879-2020 or contact us online and we can get you started on saving money from your shipping.