First and foremost, retailers have begun to not just offer services like buy online, pickup instore (BOPIS) and curbside pickup, but to incentivize consumers to choose these fulfillment options. No longer considering only ship-from-store to offset carrier capacity constraints, many retailers found other ways to leverage stores to reduce demand for traditional carrier services. Omnichannel retailers have also begun reexamining their retail footprint from new perspectives. Their ranks are growing, with more of the gig economy racing to implement the right technology to accommodate heightened requirements for security, proof of delivery, signature capture, and more. Essentially taxis and bike messengers, this new army of couriers helps shippers lighten their demand for more traditional carrier services by reducing, often significantly, the number of parcels in those carriers’ queues. Target, Walgreens, and other retailers now offer same-day and two-hour delivery options. Most of these fresh considerations involve reducing demand for traditional carrier services.Ī growing number of shippers now embrace the gig economy to get orders to customers, for example. Increasingly, some retailers, e-commerce merchants, and other shippers have broadened their definition of carrier capacity management to include new and effective ways to lessen the carrier capacity crunch. Widening our view of carrier capacity management Based on this context, a shipper will send a parcel to Group A, Group B, etc., adjusting the carrier service used, facility that sends the parcel, and other factors to navigate capacity limitations most effectively. Rate shopping groups have their own business rules which point to one group or another based on the context of an individual shipment and where the shipper stands at any given moment related to the volume-based limitations and pricing of its carrier network. Rate shopping groups help address these capacity constraints as part of shippers’ ongoing decision-making about the best way to ship each parcel out the door. Carrier-imposed capacity constraints that vary from location to location add another important consideration for shippers faced with making these decisions fast and at scale on an ongoing basis. Each parcel delivery should consider not only the destination but also the origin of the shipment since many shippers have multiple warehouses or stores from which they can fulfill orders. Multi-carrier shipping strategies also need rules in place related to delivery time requirements, special conditions (hazmat, refrigeration, etc.), and distribution points across a network. Recently, as carriers increasingly presented shippers with volume-based pricing and outright caps on the number of parcels they will accept, many shippers added business rules to their multi-carrier shipping strategies to specifically address how to handle decisions related to capacity limitations, volume-related costs, and volume-related rate increases. Proactive shippers have used multi-carrier parcel shipping technologies and strategies to navigate rising carrier costs for years. Carrier capacity management strategies ease the crunch They have less negotiation power with carriers and partners. In some cases, those same caps bring even higher costs. They must navigate carrier parcel volume caps. The net effect creates a difficult reality for shippers. Consumer expectations for cheap and fast shipping continue to climb, and consumers increasingly want to order across borders, only compounding the problems. Requirements to manage carrier invoices and other transactions grow in stride. E-commerce order volume keeps climbing, straining carrier capacity with shippers sending more parcels outbound and receiving more returns inbound. Most shippers currently face a long list of challenges thanks to some well-known trends. Carrier capacity tops the list of parcel shippers’ challenges Even if much of their sought-after inventory remains stuck at sea, merchants still need to move products that are available, and this brings its own set of relentless challenges. Workforce shortages and other challenges abound throughout all transportation sectors, and while this may revitalize investments in localized manufacturing, expanded warehousing to hold more inventory, and other efforts, these changes do not solve today’s issues.ĭespite the epic supply chain problems, some companies have taken big steps to profitably meet consumer demand leading up to and during the busy holiday season. Just two days before Thanksgiving, FreightWaves reported an “all-time-high 93 ships” were waiting there. The unprecedented cargo logjams off the southern California coast wreaking havoc on supply chains show no signs of waning.
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