MEMBERS ONLY

Navigating Through Parcel Delivery Hikes

Feb 22, 2022

Shipping costs are rising faster than they have in the past decade, causing retailers and e-commerce companies to come up with a variety of strategies to offset these increases. FedEx for one, recently announced their plans to raise their rates by an average of 5.9% across most services this year, moving away from the usual 4.9% increase. This signifies how carriers now have the pricing power and is also a sign of inflation across the global supply chain. 

With this situation in place, how can carriers better position themselves in front of retailers? How should retailers respond while still maintaining customer demands for low prices? 

In our latest episode of “Unpacking E-Commerce Logistics” series, we sat down with Nate Skiver, Founder of LPF Spend Management, to understand how to navigate through parcel delivery hikes amidst the global pandemic. Nate comes with 17 years of experience in building parcel programs for big retailers such as Gap, Stella & Dot, and Abercrombie & Fitch. The session was moderated by Logistics JournalistVishnu Rajamanickam.

Parcel Delivery Market in the Context of Demand and Capacity Availability

With regards to capacity and demand, it has been a really difficult climate for both shippers and carriers. Citing the US market as an example, Nate mentioned that there are still some capacity constraints in the present, though some seem to have abated at first glance. In Nate’s view, 2020 was really the time when operational challenges were the most severe due to the unprecedented growth in e-commerce worldwide. For starters, shippers had difficulties getting the large parcel volumes even off their dock every single day. Meanwhile, on the carriers’ side, the demand was so substantial that there was simply not enough capacity to move packages through their network and get them delivered in a prompt manner. 

Fortunately, however, things are starting to look up as far as demand and capacity are concerned. “In the holiday season of this past year, in 2021, there were capacity constraints based on demand exceeding parcel networks, but it wasn’t as severe as it was in 2020,” said Nate during the fireside chat. He believes this could be in part due to many national carriers making a concentrated effort to add capacity strategically. The rate of e-commerce growth seems to have slowed down as well, owing to the return of physical retail following the easing of lockdown restrictions.

Future-Proofing Operations in This Ever-Evolving Logistics Landscape

When asked what shippers can do to future-proof their operations, Nate suggested the use of multiple carriers to diversify risk. By having each of them serve a specific purpose, retailers can have greater operational flexibility as well as the ability to shift volume between carriers with minimal expense. Meanwhile, those relying on a single carrier for all delivery needs would be more susceptible to the dangers of single sourcing, which are more severe than ever in today’s fluctuating last-mile market. 

To continue reading

Sign Up for FREE

Unlimited access to exclusive data insights

Be in the know of the hottest events

Receive weekly roundup of latest industry news

Share this with your network

Also worth your time

Follow us on LinkedIn
Stay connected with us

Track your parcel here

More discoveries

Funding Roundup: Major Wins for CleverTap, Locad, ReturnLogic and Others

Aug 12, 2022

PR Newswire: Purolator Transforms Transportation Sector With Its New Sortation Facility in Toronto

Aug 12, 2022

Alcott Global Podcast: Carbon Neutrality in a Shipping Company

Aug 11, 2022

FreightWaves: FedEx to Apply Peak Season Surcharges As Early As September

Aug 11, 2022

E-Commerce Logistics Race in Latin America: Which Country Performed the Best in H1 2022?

Aug 10, 2022

The Business Times: A.P. Moller - Maersk Purchases Martin Bencher Group for US$61M

Aug 10, 2022

Funding Roundup: Bizongo, Homzmart, Vetted and Others Secured Early-Stage Deals

Aug 05, 2022

How Peak Season 2022 in Europe Might Look Like

Aug 05, 2022

TechCrunch: Shopify Invests $100 Million in a Marketing Automation Startup, Klaviyo

Aug 05, 2022

ITLN: Xpressbees Names Suraj Bangera as Senior Vice President of Cross-Border Business

Aug 04, 2022

Retail Dive: Amazon Launches Same-Day Shipping for Pacsun, GNC, SuperDry, and Diesel Customers

Aug 03, 2022

E-Commerce Logistics Race in Europe: Which Country Performed the Best in Q1 2022?

Aug 02, 2022

Supply Chain Dive: OnTrac and LaserShip Introduce Transcontinental Delivery Service to Prepare for Peak Season

Aug 02, 2022

Alcott Global Podcast: Importance of Supply Chain in Stationery Industry

Aug 01, 2022

Guest Post: 10 Ways Retailers Can Inspire Customers During Peak Season

Aug 01, 2022

Funding Roundup: Early Funding Rounds Secured by Cartona, DealCart and Others

Jul 29, 2022

Vogue: Glossier Launches into Wholesale Partnership with Sephora

Jul 29, 2022

E-Commerce Logistics Race 2022: Canada vs the United States

Jul 28, 2022

Macau Business: DHL Express Names Phil Corcoran as Australia’s Managing Director

Jul 28, 2022

Top E-Commerce Retailers in the United States 2022

Jul 27, 2022

Logistics Manager: InPost Now Has 4000 Parcel Lockers in the UK

Jul 27, 2022

Marketing Interactive: L'Oréal Appoints Kenny Ng as Regional E-Commerce Director

Jul 26, 2022

Guest Post: Why Logistics and Supply Chain Management Is Important

Jul 26, 2022

Guest Post: 7 Customer Retention Metrics That Allow You to Measure Customer Loyalty

Jul 25, 2022

Alcott Global Podcast: Revolutionizing Offshore Logistics

Jul 25, 2022