Strained by a pandemic surge in e-commerce, retailers are being forced to rebuild their businesses around shipping limitations
A Flood of Packages
This holiday season is like no other, with online shopping at an all-time high, and an estimated three billion packages set to course through the already strained shipping infrastructure. According to a recent study conducted by ShipMatrix, 7.2 million more packages need to be shipped each day than the shipping system has the capacity to handle. This shipageddon is reaching a catastrophic level, making same-day deliveries nearly impossible, and causing delays that are proving to be disastrous for retailers already struggling to stay on course during the pandemic.
Shipping Carriers Fighting an Uphill Battle
To cope with the surge, UPS, USPS, and FedEx are working with retailers to level shipping volumes. Typically, volumes during the holidays are 30-40% higher than at other times of the year, but those levels were reached long ago. Even though carriers have expanded weekend deliveries and hired more workers, the demand is still exceeding capacity, forcing carriers to enforce parcel limits and surcharges on retailers. In an effort to provide a window of opportunity for more shipments to go out, some of the larger carriers are also working with major retailers on planning their sales and promotions around each other. Despite their physical limitations with the sheer volume of shipments this year, the major shipping carriers are being as proactive as they can be and working closely with customers to ensure the best possible service moving forward.
Retailers Facing Sinking Sales
For many retailers, 50-60% of their sales happen during the months of November and December. With carriers enforcing capacity restrictions, retailers have had no choice but to move forward their holiday shipping deadlines, limit the number of promotions they run and when they run them, and urge customers to pick up orders in stores or curbside—all of which inhibits sales during the season. By having to reach a parcel limit, retailers must push the remaining parcels to the next day, which oftentimes leads to several more days, causing unhappy customers. Capacity restrictions and surcharges can also add several dollars to a package, significantly increasing its overall cost. For smaller retailers, this can be a make or break situation.
What Can Retailers Do Moving Forward?
In preparation for the new year, retailers can:
- Modify promotions, peaks, and volumes to fit shipping capacity.
- Consider costly alternatives to same- or next-day delivery such as using smaller outside carriers, moving goods to other warehouses closer to shipping locations, or using their own vehicles to drop off orders to carrier hubs.
- Continue to work with the larger carriers, in the hopes they will have the capacity to handle whatever the volumes are in the coming year.
- Take control of their packaging process by creating right-sized boxes!
Call to Action: Right-Sizing
When shipping a product, most retailers typically choose from a selection of boxes they keep in their inventory. This could go from eight to 30 boxes pretty quickly depending on the size and shape of goods, creating an inventory nightmare and complicated scenario for packers. Since most pre-bought boxes don’t fit each product perfectly, air pillows are commonly used to make up the extra space.
This excess void fill can often times look like an inflated air mattress to the consumer, swallowing up the product at the bottom of the box. An air mattress manufacturer obviously doesn’t ship their mattresses inflated. Five or six deflated air mattresses could probably fit in the space of one inflated mattress. But that’s essentially what retailers are doing today by shipping out product in oversized boxes with excessive air pillows—they’re mailing out inflated air mattresses!
By right-sizing, you’re squeezing all of that air out of boxes, making each one smaller. Smaller boxes mean more product in every truck, allowing shipping networks to run more efficiently.
Right-sized Packaging on Demand®
One of the simplest and most efficient ways to right-size packages is to install a Packsize On Demand Packaging® machine. Packsize machines utilize corrugated to create custom-sized boxes for every order based on dimensions to ensure that no matter what you’re shipping, whether it’s a golf club or deflated air mattress, you have the right size box. On average, right-size packaging reduces void space in a box by 80-90%, reduces the overall cube of a finished box by 40%, and increases the efficiency of the pack-out process—all while reducing costs along the way.
To learn how Packsize can customize a packaging solution that’s right for you, contact us today by filling out the form below. We can offer you a full packaging consultation, absolutely free.