How to prepare B2C delivery for the impending parcel tsunami

The forecasted increase in ecommerce sales over the next 5 years will cause a corresponding rise in parcel volumes that threatens to become a parcel tsunami (if it isn’t already). To prevent resourcing, processes, and technologies from being overwhelmed, warehouses need to implement strong pick, pack, parcel processes and even look beyond the warehouse floor to perfecting the customer delivery experience. These changes will deliver ongoing return on supply chain investment and allow them to scale to meet continued ecommerce success and growth.

Doubling of global parcel volumes threatens to stretch warehousing around the world

Global ecommerce sales are forecasted to eclipse $7 trillion USD by 2026. (Source: eMarketer) The sheer volume of parcels shipped is also expected to grow at a similar pace. The recent Pitney Bowes Parcel Shipping Index for 2021, noted a 27% YOY increase in parcel volumes in 2020 to 131 bn in the markets surveyed (Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Norway, Sweden, the United Kingdom and the United States). That’s a staggering 360 million parcels every day. Parcel volume is expected to increase to 266 bn per year by 2026. A tremendous number of parcels fulfilled by warehousing across the world, whether single or multi-line orders. The doubling of parcel volumes over a short period of time would stretch any warehouses’ resources, processes, and technologies. It’s already stretching the capacity of many carriers, who have responded by throttling shipper volumes and increasing rates.

As we noted in a recent blog, the new IT investment philosophy that is making its way to the warehouse floor calls for the ecommerce supply chain to emphasize rapid deployment, increased agility, continuous optimization, and scalability to ensure that it keeps pace with change and continues to provide progressive return on investment. Warehouses holding 100 SKUs today could be asked to hold 1200 in a year. Seemingly small inefficiencies or excessive manual work in order processing, slightly more expensive shipping costs, or occasional order errors that cause failed deliveries or returns will be exponentially exacerbated as parcel volumes increase, impacting the bottom-line and customer retention.

In part one of this blog series, we looked at some of the warehouse turbocharging “low-hanging fruit” that can be done to get into the ecommerce fulfilment game and/or see some initial success. In part two, we look at harder optimizations that can yield higher returns. Giving warehouses the confidence to handle the impending parcel tsunami as ecommerce continues to grow.

Warehousing needs robust pick, pack, parcel processes

The first challenge of eCommerce fulfilment is the move from handling palletised orders to shipping several different SKUs in an order and one-off ‘eaches’. Warehouses need to automate and error proof processes and handle spikes in demand. With those enhancements in the rear-view mirror, it’s time to build integrated pick, pack, parcel processes and look beyond the warehouse to perfecting the customer delivery experience.

Here are some tips that may be harder to implement, but will delivery higher and ongoing returns:

• Automate detailed picking and packing lists that can be easily used by temporary resourcing and new hires to overcome short-term spikes in demand and steady long-term growth.
• Prioritize order fulfillment based on customer delivery expectations to first focus on same day orders, then next day orders and then 3-day orders, and so on
• Make order picking aware of carrier pick up windows and deadlines to avoid picked orders sitting around overnight or missing the chance to meet a next-day SLA.
• Automate carton selection and packing instructions to reduce damage to products and generate inbound returns and eliminate surprise, post shipment DIM fees that increase shipping cost and are often not charged back to the customer
• Integrate with parcel management software to close the data gap between order picking, packing and shipping. Thereby avoiding address and other shipping errors, and poor rating and routing decisions
• Expand carrier relationships to include non-traditional carrier options like gig economy couriers, local courier, and white-glove carriers. As well as non-carrier options like lockers, in-store pickup, and pickup locations. Letting your customers choose the option most convenient for them – on their way home, to their doorstep, or over the threshold
• Establish smart business rules that automate carrier and service selection so shipping costs are estimated and charged at the point of sale and then enforced at the packing desk. Ensuring the most cost-effective transportation choice is made and that all fees are collected from the customer

Implementing these tips will give warehouses the confidence needed to embrace ecommerce growth and handle increasing outbound parcel volumes. With efficient resourcing, automated processes, and integrated, scalable technologies and methodologies to confidently fulfil ecommerce orders – from the inventory shelf to the pack out station and into the hands of online customers.

Stay-tuned for part three in this series where we look at taking your digital commerce to the next with our technology partner Ultra Commerce.

Are you ready to turbocharge your warehouse for eCommerce success?

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