Peak Season Chaos: How Multi Carrier Software Can Help

Surcharges, shipping delays and an e-commerce boom — 2021 will be a challenging peak season. In this QAD Precision Report we look at how multi carrier shipping software helps shippers manage delays and avoid surcharges.

This year has presented shippers with many challenges, from port congestion and worker shortages, to increased shipping costs and decreased capacity. These challenges, coupled with an increase in e-commerce, has led many shippers to look for solutions to both meet customer demand and control costs.

Lack of Drivers Means Delays

Peak season issues are nothing new to experienced shippers. Perhaps a cargo shipment is late, carrier capacity is tight, or even demand is outpacing supply? But all at once? Now that is new — but it is the reality facing many shippers as we head into peak season. 

One issue plaguing shippers in many parts of the world is the dearth of truck drivers. In recent weeks, UK consumers faced empty supermarket shelves, along with fuel shortages, due to the lack of truck drivers. The UK’s Road Haulage Association estimates that the country has a shortfall of around 100,000 drivers.

The problem is not confined to the UK. Research from Transport Intelligence found that Europe has an estimated 400,000 too few truck drivers. Poland and Germany, along with the UK have the largest shortfalls.

The US Bureau of Labor Statistics found that during the COVID-19 pandemic, the truck transportation industry lost 6 percent of its workforce. While salaries are on the rise and sign-on bonuses now common, the industry has not been able to add enough new drivers as older cohorts retire.

Increasing Parcel Volumes and Carrier Surcharges

E-commerce saw a huge boom during the COVID-19 pandemic and it is showing no signs of slowing down. The Adobe Digital Economy Index estimates that in 2021, global e-commerce sales will reach $4.2 trillion. With increased e-commerce, comes an increase in parcel volume. 

E-commerce volume has become so large that for the first time ever, Amazon surpassed FedEx in parcel volume in 2020. Although carriers are adding new facilities, staff and capabilities across many geographies, keeping up with the demand has been a challenge. As a result, increasing volumes means a decrease in capacity, and therefore an increase in prices. 

Major carriers, UPS, FedEx, and USPS have all announced peak season rate increases. FedEx announced that its rates will increase an average of 5.9 percent for US domestic, export, and import services. USPS is one of the last carriers to add peak season shipping surcharges, only beginning in 2020 to account for additional volume. 

Lack of carrier capacity is not only a problem for shippers — it can also be a problem for consumers. Some shippers have been passing the higher cost of shipping onto shoppers as the additional surcharges are added onto merchandise prices.

How Multi Carrier Shipping Software Helps Navigate Peak Season

Peak shipping season — and the challenges it brings —  is predictable. However, the current spike in demand, along with lack of carrier capacity and the shortage of truck drivers are not issues that individual shippers can control.

What shippers can do, however, is ensure that their operations are as flexible and adaptable as possible. One way to do this is with multi carrier shipping software.

A comprehensive, global, multimodal, multi carrier shipping solution can help shippers remain flexible to navigate the unknown, from peak season surcharges to lack of carrier capacity. It not only can potentially solve or alleviate challenges, it can help shippers control costs and rise to meet increased demand.

Although no software solution can solve a driver shortage or help your ship get into port sooner, what it can give you are options.

Multi carrier shipping software offers users the benefit of flexibility with carrier choice. Shippers no longer have to rely on one carrier, they can shop from multiple carriers. Shippers can utilize a mix of carriers including regional carriers to get their parcels to customers on time and for the lowest price.

Instead of being “locked in” to one carrier (and its surcharges), shippers can rate shop and review carrier charges in real time. Alternatively, parcels can be automatically routed to the carrier with the lowest rate that will meet the delivery deadline. 

Communication with Customers is Key

Delays are likely to be inevitable, especially during this holiday season, but a benefit of multi carrier shipping software that should not be overlooked is transparency. 

A multi carrier shipping solution gives you the ability to track and manage all shipments the same way, regardless of carrier selected. This is especially important when communicating delays with customers. You are able to manage customer expectations by efficiently and honestly relaying information about the status of their parcel. 

This information can be shared between logistics staff and your customer support team. As a result, you will be able to clearly communicate any issues that arise with your customers, as well as take proactive steps to resolve problem shipments.

A multi carrier solution will also allow you to offer different delivery options to your customers. These can include store pick-up or parcel locker delivery. 

Delivering packages to a central location where customers can collect their goods is easier to manage than requiring a carrier to make individual deliveries to home addresses. These options could help offset delays and residential delivery surcharges. 

While the current supply chain crisis is partly the result of the pandemic, many of these issues will be with us for the foreseeable future. Shippers need a strategy to manage these risks, protect margins and ensure excellent customer service.

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Further Reading

CHOOSING A GLOBAL MULTI CARRIER SHIPPING SOLUTION: 3 QUESTIONS TO ASK

SUPPLY CHAIN DISRUPTION AND PEAK SEASON SHIPPING

3 MINUTE EXPLAINER: WHAT IS MULTI CARRIER SHIPPING SOFTWARE?