Responding to Coronavirus
Responding to Coronavirus: Keys to Success in Parcel Shipping
Lessons learned from those successfully mitigating the negative impact of the recent pandemic to the global parcel supply chain.
It is tempting to highlight all of the things that can go wrong when an unexpected event like COVID-19 effects the global parcel supply chain. Certainly, there are many shippers struggling to adapt to these dramatic changes that could include a massive spike in ecommerce order volume, carrier capacity issues, or the risk of a ship point (store, distribution center, or drop-ship vendor) having to temporarily close or reduce capacity. However, there are many shippers that seem to be handling the COVID-19 changes fairly well so far. Following is a list of observations we believe are allowing these shippers to be successful in this situation of dramatic change.
In some industries, we are seeing volume spikes upwards of 30%. A system that is good enough, isn’t. Unexpected peaks cause unexpected problems and a once rock-solid system might be strained by the increased workload, and the error files keep adding up, or worse, system crashes. While you can’t go back in time, there’s still time to upgrade before peak. A multi-carrier parcel PTMS can not only handle high volume, but offer configurable, cost-saving decision making even during max throughout.
Diverse Delivery Options
There have been many arguments for keeping stores focused on retail and not order fulfillment, but the coronavirus has taught us that home delivery and curbside delivery is now the number one sought-after method. In Texas, HEB has been at the forefront of this by establishing areas for customers to quickly park in designated areas and an associate will have their car loaded in under a minute. While other grocery chains have complained that this method of fulfillment from store has caused their aisles to become congested with staff along with customers, HEB has found a winner.
We don’t have all the answers on how to fulfill orders using stores, but what we have seen is that the closer the product to the end customer, the easier it is for an order to be fulfilled, and giving customers options at checkout provides a great experience.
Long term this could mean an entire new focus on the automated micro-fulfillment, a hybrid approach, or just dedicated staff that handle returns and online orders. Too often we have seen a battle between web and the stores when it comes to revenue attribution so this might be the time to have those conversations.
Carriers, regionals, and last-mile companies are all having their own issues right now. Carrier agility means that you can easily shift your mode of delivery to meet your customer’s needs. If you have locked yourself into a small network then service disruptions are likely causing customer experience and on-time delivery failures. Having options at this point is a necessity; the most successful shippers can add new carriers easily and effectively, even if these are “just in case.” More and more we are being approached to think outside the standard of parcel and now including the last-mile delivery services in decision making. This opens up possibilities of combining freight haulers and couriers in ways that have only existed within network deliveries.
Some meetings could have been an email and others are so abstract that it would be hard to make concrete action items out of the minutes. Companies large and small have found that forward planning for critical events is paramount and not just a fun thing to list on due diligence reports. So many of our clients had quick reaction teams and processes in place that spun up pre-planned responses. Cross departmental working groups establish clear lines of communication into critical needs so that in times of trouble issues don’t linger in committee. Within the warehouse this could be getting Ops and Planning together to find temporary locations to house critical items. Additionally, companies could be working with their Software providers to put old equipment back in service to increase production – think old scanners previously mothballed, temporary pick/pack stations, or downlanes that had been converted to storage.
As the great philosopher Mike Tyson once said, “Everyone has a plan until they get hit in the face.” Start with making a plan with your outbound partner in the eventuality you need them to provide sufficient supply and identifying location-based rules and local policies that could critically hamper fulfillment operations.
Adversity brings out the best in people and we are sure that there are unsung heroes in your organization that stepped up in big ways. Team leads that held entire shifts together with calm and grace. Staff members that put the extra time in and associates that came through with teamwork to complete tasks that seem so insurmountable. Now is the time to take stock and have some conversations. We understand that there are those workers who do a legendary job day in and then just want to clock out, but now is the time to let those people that took on the challenge rise up. Acknowledge your staff in monetary, career, and nontangible ways and they will be truly grateful.
Our staff is 24x7 on a good day to help our customers. These last several days could not be described as normal days so teamwork with your partners is crucial. Our customers have seen surging demands on their order volume and output with very little margin for error. Everyone is under stress right now, not only professionally, but the worries of their family and friends. With some of our clients experiencing a 100% spike in orders last month, our team had to be proactive in making sure these volume spikes were not an issue. Currently profit seems secondary when you consider that people are now self-quarantining and depending on deliveries for their families. Not just a good PR move, but a good people move.
With the global supply chain industry working overtime right now we all have to look at the most pressing priorities to meet the demands of customers and people around the world that are in need of lifesaving equipment. As governments around the world start to contain the pandemic, and the demand spikes lessen, let’s talk. Combining scenario analysis and a partner that can quickly implement changes, your company can weather the next storm.
We realize this piece is very high-level, and if you’d like to drill down on any of our recommendations, reach out to us with questions or comments. We also welcome opportunities to deliberate or dispute our insights and recommendations. No conversation is off limits.
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