The onset of the COVID-19 pandemic disrupted supply chains worldwide and sent companies into damage control with upset customers over the delays. Amid the reluctance of consumers to enter brick and mortar stores early in the pandemic, online sales in the United States increased, rising in June of 2020 to 76.2% over the same month in the previous year. DAT Freight and Analytics found that light-duty vehicle trips, mainly involved in last-mile deliveries from online ordering, had increased by 60%. Overall online retail sales for the year increased by 32.4%.
While there is a universal desire for the return to pre-pandemic normalcy, the altered consumption patterns are here to stay. Recent surveys by ShipStation, ShipBob, Shippo, and Ware2Go all found that not only did consumers shift to online shopping during the early pandemic, but large percentages have also come to prefer it and intend to continue doing significantly more shopping online rather than return to stores.
The Demand for Real-Time Shipping
Customers don’t always take an interest in where their purchase is coming from – but they are emphatically concerned about where they get it and when. Being able to communicate proactively and empathically with customers about where their deliveries were in real-time became a key concern.
More than four in five customers give as much weight to the way brands treat them as to the products they sell. Three in four say that delivery is key to their overall shopping experience, driving brand loyalty and trust. As the Director of Marketing Consumer Goods, Apparel & Retail at UPS recently explained in an interview, “When that package is delivered, that package being delivered is still an extension of your brand.”
The surge in demand for delivery has collided with a long-term decline in the quality of delivery reported by customers. Increasing rates of damaged packages and late deliveries set side by side with rising expectations, have created a demand for transparency in the shipping process. Customers want to know in real-time what stage of the delivery process their shipment is in, and when they can expect arrival. Particularly during the supply chain stresses of the early pandemic, the companies which communicated openly and proactively with customers about problems and delays were better able to maintain strong relationships than those who provided passive tracking updates.
A related demand and increasing customer demand is for the ability to make changes to their shipping order while it is in transit, usually to send it to a different address because of a life change or in order to correct an address error. This is a particularly strong expectation among brands’ most loyal customers, three in four of whom value their previous delivery experience and expect the proactive real-time intervention to reroute or expedite shipments.
Ongoing Challenges in Real-Time Shipping
As the economy in the United States recovers from the initial impact of the pandemic, demand for imports has surged along with consumer spending. At the same time, the world’s supply of shipping containers was dislocated amid the pandemic shutdowns, stranding surplus empty containers in North America and Europe, creating one type of bottleneck simply for want of something within which to ship goods.
Ports along the West Coast of the United States have also been swamped by the increased volume of goods moving through them, with cargo ships waiting in line to dock for days or weeks. Both at ports and throughout the country, an ongoing labor shortage of dockhands, truckers and train operators has been exacerbated by the waves of increased sick days and quarantines.
Finding drivers has been an ongoing challenge for the shipping industry, with carriers scrambling to recruit and train personnel, particularly in full truckload shipping. This has led to a spillover in demand for LTL shipping services to fill the breach, further overstretching LTL capacity. LTL carriers have taken on more “middle-mile” deliveries between warehouses for companies like Amazon and Wayfair, while at the same time carrying increased freight for “last-mile” delivery due to the boom in e-commerce.
Chris Mendenhal of Transportation Insight recently observed that demand for LTL shipping exceeded current capacity, writing that “[c]onditions are unlike anything the market has experienced. Many major carriers are not accepting new business. Fuel surcharge averages are trending upward to 22%, a sign that other operational expenses are being built in on that billing line in order to avoid the appearance of raising rates.
The high demand for LTL carriers and lack of competition have made LTL firms less attentive to customer service and professional performance, even as end-customers become more exquisitely sensitive to it. As some degree of normalcy has returned, the pandemic has become a running excuse for inflexible scheduling, poor communication, delays, and lack of professionalism among carriers taking advantage of increased demand to operate around their own convenience rather than that of shippers’ end customers. Guaranteed service offers have evaporated, carriers have begun to return freight immediately and without authorization, if a consignee is closed or unavailable, or moved to drop-and-fly delivery practices.
White-Glove Delivery Options
While e-commerce has driven an expansion of the retail industry and the volume of LTL shipping, customer satisfaction in the physical condition, ease of tracking, timeliness of delivery, and range of delivery options have fallen in recent years. As competition between retailers becomes more competitive, but delivery has become on average less satisfying for customers, White glove services have become more popular as a final mile delivery solution.
White-Glove services mean that carrier personnel offer an engaged level of service, use added care, and go beyond what is offered by other LTL carriers. Rather than optimizing for volume, their operations are optimized around customer experience, with a focus on how it positively or negatively impacts customer perception of the brand of the product they are delivering.
ExpressIT is a White-Glove LTL service that offers real-time shipping, providing the ease of tracking, proactive communication, and flexible delivery experience required by a growing segment of e-commerce customers, and the brands that value them.