Holiday Peak Season Is Coming: Are Your Delivery Partners Prepared?
Do you remember the headache of holiday shipping delays last November and December? It was stressful all around – for merchants, delivery carriers, and the consumers hanging in the balance, worrying about their gifts showing up in time for Christmas.
09/01/2021
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We have suggestions for e-commerce shops – like experimenting with BOPIS, for one – to help prevent major shipping catastrophes and keep the number of anxious customers at a minimum.
But before we go there, are we truly heading down a similar path? Are delivery partners prepared to cope with the holiday load?
But before we go there, are we truly heading down a similar path? Are delivery partners prepared to cope with the holiday load?
Unpacking the 2020 Holiday Shipping Chaos
We don't like clichés. That said, last year was a perfect storm of circumstances.
Online shopping had already been growing year over year before the coronavirus shuttered society. The popularity of buying online skyrocketed.
U.S. online sales in November and December catapulted to $188.2 billion, according to Adobe Analytics research. That's a growth rate of 32.2% when compared to 2019 online holiday shopping figures.
Such a steep rise in online orders inevitably puts pressure on the delivery portion of fulfillment. USPS alone experienced a 25% increase in volume.
Commercial carriers have the option to cut off delivery for high-volume retailers if actual shipments exceed agreed-upon commitments. Many projections turned out being too low, so biggest courier services such as UPS stopped accepting packages from some retail heavyweights.
Who was left to absorb their orders? The government-run delivery service.
The overflow complicated matters for USPS, which was already running behind schedule from the November election. The organization was also short-staffed; coronavirus infections caused high rates of worker absenteeism.
A powerful snowstorm snarled the Northeast in December, too. It's no wonder that some packages didn't arrive at their final destination until a whole month after Christmas.
Online shopping had already been growing year over year before the coronavirus shuttered society. The popularity of buying online skyrocketed.
U.S. online sales in November and December catapulted to $188.2 billion, according to Adobe Analytics research. That's a growth rate of 32.2% when compared to 2019 online holiday shopping figures.
Such a steep rise in online orders inevitably puts pressure on the delivery portion of fulfillment. USPS alone experienced a 25% increase in volume.
Commercial carriers have the option to cut off delivery for high-volume retailers if actual shipments exceed agreed-upon commitments. Many projections turned out being too low, so biggest courier services such as UPS stopped accepting packages from some retail heavyweights.
Who was left to absorb their orders? The government-run delivery service.
The overflow complicated matters for USPS, which was already running behind schedule from the November election. The organization was also short-staffed; coronavirus infections caused high rates of worker absenteeism.
A powerful snowstorm snarled the Northeast in December, too. It's no wonder that some packages didn't arrive at their final destination until a whole month after Christmas.
New Issues Complicating the Shipping Landscape
The Delta variant is thwarting any dreams of returning to a more normal state. Therefore, we're assuming that ecommerce sales this holiday season will reach the same levels as 2020, if not higher.
Two additional factors, in particular, are influencing the forecast for ecommerce holiday shipping for 2021:
1. Global shipping delays haven't gone away
Have you noticed a shortage of some items when browsing the aisles of retail stores recently?
International supply chains are in a messy state. Here's the Cliff's Notes version.
Cargo ships leaving China at the end of 2019 unloaded hundreds of thousands of goods across the Americas. They also left behind empty shipping containers, since new lockdown restrictions made it impossible to reload them and proceed with the typical shipping loop. The ensuing pileup of shipping containers at high-traffic ports continues to impact the flow of goods and raw materials.
If that weren't enough, the Suez Canal was blocked by a massive cargo ship for six days in March 2021. And in June, a coronavirus outbreak in southern China led to strict protocols, causing congestion at four key ports.
International supply chains are in a messy state. Here's the Cliff's Notes version.
Cargo ships leaving China at the end of 2019 unloaded hundreds of thousands of goods across the Americas. They also left behind empty shipping containers, since new lockdown restrictions made it impossible to reload them and proceed with the typical shipping loop. The ensuing pileup of shipping containers at high-traffic ports continues to impact the flow of goods and raw materials.
If that weren't enough, the Suez Canal was blocked by a massive cargo ship for six days in March 2021. And in June, a coronavirus outbreak in southern China led to strict protocols, causing congestion at four key ports.
2. There's a serious worker shortage.
It's hard to go anywhere without seeing an abundance of "help wanted" signs. We bet that some of your own experiences, as a customer, have also been impacted by staffing shortages.
There were a record-high 10.07 million job openings at the end of June 2021. Business owners say they are struggling to fill them. The job openings rate for transportation, warehousing, and utilities sits at 7.1%.
Anecdotal evidence from Vermont to Chicago and beyond show USPS is no different. Understaffed operations equate to delivery delays. And in some cases, postmasters, supervisors and building managers take on carrier duties to get the job done.
There were a record-high 10.07 million job openings at the end of June 2021. Business owners say they are struggling to fill them. The job openings rate for transportation, warehousing, and utilities sits at 7.1%.
Anecdotal evidence from Vermont to Chicago and beyond show USPS is no different. Understaffed operations equate to delivery delays. And in some cases, postmasters, supervisors and building managers take on carrier duties to get the job done.
It's clear to see where things are headed. Global bottlenecks have a trickle-down effect. Everyone is scrambling to move goods and resources as quickly as possible, causing a traffic jam of sorts.
Therefore:
- Ecommerce shops will face challenges in getting their purchases out the door and into customers' hands on time
- If there are fewer workers to help untangle the shipping issues, the strain on logistics carriers only grows
How Can Merchants Achieve On-Time Delivery?
Despite the dire outlook, ecommerce shops have a chance to largely hit their delivery date targets and avoid huge shipping fiascos. We advise they take two steps specifically:
Promote early
If you're reluctant to start holiday promotions weeks before Thanksgiving, you may want to rethink your strategy for the sake of logistics.
The more customers who order early, the better. Therefore, it's a good idea to set the tone by:
Focus efforts on boosting sales throughout all of November and even sooner, and plan accordingly.
The more customers who order early, the better. Therefore, it's a good idea to set the tone by:
- Running promotions like flash sales and limited-time offers well before Black Friday and Cyber Monday
- Stating, in every communication, the cutoff dates to place orders in time for holiday delivery
- Clearly communicating the importance of ordering as early as possible; educating customers about the shipping predicaments can go a long way
Focus efforts on boosting sales throughout all of November and even sooner, and plan accordingly.
Invest in BOPIS
The best way to mitigate delivery snafus, either completely or at least partially, is by offering "buy online, pick up in store." Data shows that shoppers are embracing it – BOPIS accounted for one in four orders over the 2020 holiday season.
Pureplay ecommerce and D2C brands might think, "That's great for brick-and-mortar retailers. But BOPIS isn't relevant if I don't have a physical store."
Wrong. Services like Via.Delivery make BOPIS an option for all ecommerce shops. Customers select a participating pick-up location that's most convenient, rather than entering a residential address.
The BOPIS solution can't wipe away shipping delays altogether. But it can certainly help in making the "last-mile" delivery more efficient. Since deliveries are made in bulk to a commercial pick-up location, fewer carriers are needed along the way. Packages, therefore, may reach a commercial location sooner than a residential one during peak holiday congestion.
There's also monetary perks. First, shipping to commercial locations is cheaper than shipping residential. USPS will temporarily raise rates from October to December and commercial carriers are adding holiday surcharges.
Second, BOPIS has been shown to generate higher customer spending. Merchants offering BOPIS experienced online spending growth of 54% last year, compared to 34% growth for those that didn't.
Pureplay ecommerce and D2C brands might think, "That's great for brick-and-mortar retailers. But BOPIS isn't relevant if I don't have a physical store."
Wrong. Services like Via.Delivery make BOPIS an option for all ecommerce shops. Customers select a participating pick-up location that's most convenient, rather than entering a residential address.
The BOPIS solution can't wipe away shipping delays altogether. But it can certainly help in making the "last-mile" delivery more efficient. Since deliveries are made in bulk to a commercial pick-up location, fewer carriers are needed along the way. Packages, therefore, may reach a commercial location sooner than a residential one during peak holiday congestion.
There's also monetary perks. First, shipping to commercial locations is cheaper than shipping residential. USPS will temporarily raise rates from October to December and commercial carriers are adding holiday surcharges.
Second, BOPIS has been shown to generate higher customer spending. Merchants offering BOPIS experienced online spending growth of 54% last year, compared to 34% growth for those that didn't.
Avoid Shipping Nightmares with Preparation
The explosion of online sales during the holidays is a fantastic thing. But as we saw in 2020, it can quickly turn into a nightmare if shipping delays threaten your deliveries.
All indications point to another hectic season of holiday shipping on the horizon. If D2C brands explore BOPIS and plan their holiday promotions early, they can be confident that they're prepared to navigate the rocky waters ahead.
All indications point to another hectic season of holiday shipping on the horizon. If D2C brands explore BOPIS and plan their holiday promotions early, they can be confident that they're prepared to navigate the rocky waters ahead.