Online sales were growing at a breakneck pace before the COVID-19 pandemic, and many believe this is a change in shopping habits that will continue to gain momentum. This shift has impacted warehouses that are increasingly picking, packing, and shipping parcels for the final mile of the supply chain. The question for them is, how do they manage these smaller, more frequent shipments effectively as they grow?
This growth has been a boon to retail and ecommerce companies, 3PLs, manufacturers, and other warehouse distribution centre (DC) operators.
The rise of e-commerce domestically and abroad is spurring demand for industrial real estate — including warehouses and DCs. According to real estate services firm CBRE, meeting the growth in e-commerce will require an additional 330 million square feet of warehouse and distribution space in the United States. Globally, 1.5 billion square feet of space is needed by 2025 to accommodate the rapid increase in eCommerce.
Further, the report showed that every US $1 billion of e-commerce sales requires 1.25 million square feet of logistics space. Adding warehouse space to scale is time-consuming, not to mention expensive.
Our sister company, SmartFreight showed in its recent eBook, “Growing Fast? 9 Things Expanding Warehouses Can Do to Scale Parcel” While growth is great, it comes with challenges, especially when dealing with high-volume ecommerce operations.
It doesn’t matter whether a warehouse is looking to grow to 10,000 parcels a month or from 10,000 to 25,000 a month or more; some obstacles come from that growth that warehouses will need to overcome to turn the opportunity increased ecommerce gives into true success. True success is not measured by just sustaining order volumes but by profitably sustaining order volumes.
Many carriers have set pick-up times or daily cut-offs to meet specific delivery SLAs. Failure to meet those deadlines can mean a lost shipping day or a late delivery. Automate wave and batch picks to meet carrier pick-up times and daily cut-offs, with enough time for packing and labelling.
While many consumers want their orders as soon as possible, some are willing to wait – particularly if the cost is less. While processing orders first in, first out may delight customers with a delivery they weren’t expecting for a few days, you risk disappointing customers expecting an overnight shipment. Prioritize picking decisions based on customer delivery expectations. Pick and pack next-day deliveries ahead of 2-day deliveries, 2-day deliveries ahead of 5-day deliveries, and so on. This can help manage the ebbs and flows of a typical warehouse and ease peak periods.
Much like shopping cart killing stock-outs, nothing disrupts an order more than an empty product shelf. Carefully manage your On Hand and Order Fulfilment Stock (and pickable inventory) by automatically generating notifications for replenishing Pick Faces from bulk storage, so pickers don’t try and pull from empty shelves during peak order periods. Coming back empty from a Pick Face and generating a back order can reduce order margins, not to mention delaying a shipment and jeopardizing a delivery commitment.
Whether a retailer, 3PL, or manufacturer, dealing with end customers adds a layer of delivery experience to the mix. Today’s demanding customers want the items they purchase, how they want, and the price they want. How they are serviced is a direct reflection on the brand—if you are providing a service to the retail or ecommerce business, that reflection will also be on you.
Here are a few ways that shippers can help smooth their processes while providing the service levels that consumers demand:
In the end, parcel picking, packing, and shipping will become a more significant part of the successful warehouse’s function as e-commerce continues to take a larger share of the overall retail market. To help manage this, retailers, 3PLs, and manufacturers find that the right logistics technology mix can help improve efficiencies, reduce costs, and keep customers happy by delivering an exceptional shipping experience.
Integrating your WMS with a Parcel TMS to help perfect the pick, pack, and parcel process warehouses can more effectively manage last-mile parcel from the order to the front door, eliminating manual processes, disparate and siloed data, and lack of visibility.
Contact us if you want more information on Microlistics’ integration with SmartFreight (EU and ANZ), Transtream (NA), and other parcel shipping software. Start scaling parcel shipping to meet your expanding warehouse.