To help ensure long-term success, shipping and supply chain professionals must strive for continuous improvement. But for the past year and a half, the COVID-19 pandemic has made it challenging for some businesses to even stay afloat. Companies have been forced to adapt: 62% say their business has undergone a significant transformation in shipping operations.[1]
To gain a firsthand look into how shippers have been dealing with bottlenecks, USPS analyzed in-depth interviews with several major retail decision-makers, conducted as part of a national survey by The Colography Group between May and June 2021. The compiled findings are designed to help shippers better understand:
- The nature of carrier relationships during COVID-19
- How businesses have altered their shipping behavior during COVID-19
- Specific changes being made to overcome pain points experienced during COVID-19, as well as expectations for the months ahead
Read on to explore how some of today’s leading supply chain professionals are navigating change and creating improvement processes that will help prepare them for the future.
Key Shipping Challenges During COVID-19
The interviews uncovered a few key themes—namely, ongoing challenges with carriers regarding delivery times, costs or consistency. In general, shipping professionals don’t always feel as though they have a true partnership with their carriers. Service reliability comes up as a particular challenge.
Service Reliability
The consensus among the supply chain decision-makers was clear: No single major carrier is 100% reliable all the time.
“I get the feeling from the big [carriers] that they operate under a certain mindset: ‘Here’s our process, take it or leave it.’ And every year, businesses get a certain increase [in surcharges], and that’s just the way it is. And I never feel like [the carriers] are a true partner.”— Shipping decision-maker at a major retailer
Businesses sometimes feel forced to make sacrifices. For example, some carriers may charge cheaper prices but offer poor supply chain visibility. Or if visibility is good and deliveries are quick, the prices may be too high. All carriers experienced hiccups with delivering items on time during the worst periods of the pandemic.
Carrier schedule reliability fell to a low of 56% in 2020.[2]
The decision-makers interviewed also noted the following key business pain points during COVID-19:
- Filing claims
- Reshipping in the event of lost or late packages
- Calculating carriers’ surcharge fees
- Navigating new surcharges added on by carriers
- Achieving consistency with transit times
- Efficiently handling packages of varying dimensional weights and sizes
Pro tip: Use the free USPS surcharge calculator to uncover any hidden carrier surcharges you may be paying. You can also request a free audit of your entire shipping operation to help identify opportunities for savings.
Key Shipping Solutions During COVID-19
To alleviate some of the difficulties and uncertainties imposed by the pandemic, many shippers have sought out new solutions to help ensure success into the future. The supply chain professionals interviewed pointed to two key areas: technology and automation, and shipping volume solutions.
Technology and Automation
To make fulfillment processes as efficient and streamlined as possible, some businesses have started to implement supply chain integration solutions.
In particular, the interviewees mentioned shipping label creation as an area needing improvement. Some of them have begun investing in automated software that allows for easier, more efficient label creation—replacing the traditional, more time-consuming manual process.
The interviewees also discussed robot palletizers, which can quickly place and stack items onto pallets for seamless transportation to the next step of the process. This may be especially useful for stacking large or bulky items, which can be both a time-consuming and a labor-intensive process for employees palletizing manually.
“It’s going to be harder and harder to staff your warehouses and keep the products going out reliably. So, [this is] forcing automation. I’ve got to be able to get these packages out no matter what. I’m going to start with palletizing robots and I’m going to go from there—because the landscape is changing.”— Shipping decision-maker at a major retailer
Pro tip: Supply chain technology upgrades can help simplify and streamline operations. To decide which technologies and innovations are right for you, take stock of your business goals, areas for improvement, and both short- and long-term priorities. This seven-step guide can help you get started.
Shipping Volume Solutions
To meet the influx of e-commerce orders during COVID-19—as well as subsequent carrier service failures—businesses had to adapt quickly.
While the supply chain decision-makers interviewed did not use or plan to use third-party logistics (3PL) providers to help with demand, they did reference implementing the following solutions in order to adapt:
- Switching carriers
- Reshipping products
- Paying current staff overtime or bringing in extra staff to help get products shipped
- Stocking up on inventory
- Shipping packages to carrier access points instead of residential locations
- Changing pick-and-pack operations
Many of the shippers interviewed also added extra warehouse space or have plans to move into larger spaces in order to more efficiently handle the increase in order volume.
“We actually built a warehouse in Texas during the pandemic, and we bought warehouses in Illinois and California, as well. The interest rate on all of those is under 3%. Inflation is higher than that. So we’re actually paying negative interest and building assets, which we can then leverage as needed.”— Shipping decision-maker at a major retailer
Pro tip: Volatility is inevitable in the world of supply chain and logistics—but there are some simple steps shippers can take to help ensure stability. Prepare for the unexpected while business is good, rather than waiting until you experience disruptions. Doing so can save on time, costs and effort in the future.
Key Takeaway
As businesses struggled to meet the surge in e-commerce demand during the first few months of the pandemic, both new and existing issues came to light, including carrier delays, surging order volume and inefficient processes.
To better meet customer needs and prepare for what’s ahead, technology and automation solutions have come into focus, including palletizing robots and automated label creation. Many businesses have switched carriers, hired extra staff or stocked up on inventory to help ensure they can meet demand. Securing extra warehouse space has grown increasingly necessary as well.
With COVID-19 still presenting plenty of unknowns in the world of shipping, continuous improvement planning has become more important than ever.
