The COVID-19 pandemic has been a boon to the eCommerce industry. At the same time, it has also been a nightmare for the eCommerce industry. As consumers moved more of their shopping online, many eCommerce retailers saw their orders jump. However, the across-the-board jump in online sales put a strain on all aspects of the order fulfillment process. During the 2020 holiday season, limited carrier capacity impacted order processing. That made an already chaotic season even more stressful.
Processing orders during a pandemic
The pandemic impacted many elements of global supply chains. Initially, factories closed in China due to the outbreak in Wuhan. Many businesses struggled with broken supply chains. For a time, overwhelmed Amazon warehouses shipped only products the company deemed necessities. This constricted shipping for many FBA merchants without a way to complete the order fulfillment process.
As online orders spiked, industry management had to institute new processing protocols quickly. While dealing with a spike in demand, order fulfillment warehouses had to keep their employees safe from infection. Carriers like FedEx and UPS are an integral part of the fulfillment process. ECommerce businesses need them to get customers’ orders to their doorsteps.
By the middle of the year, order processing seemed to have reached a pandemic equilibrium. Fulfillment centers adapted. Carriers worked to get customers’ orders delivered. But, as the fall approached, delivery slowdowns started to crop up. USPS delivery delays, which began before the November election, continued through the holiday season. Then, UPS and FedEx abruptly announced limits on the numbers of packages they would pick up from large customers. These carrier capacity limitations threw a wrench into holiday order processing.
Where UPS, FedEx, and USPS fit into the fulfillment puzzle
The order fulfillment process has six necessary steps:
- You arrange to have inventory shipped to your order processing warehouse.
- The warehouse logs your products and stores your stock.
- An order is relayed from one of your eCommerce platforms to the fulfillment center.
- Order processing kicks into gear. Operations personnel start picking the items in the customer’s order. At the packaging station, the order is packed and labeled for shipping.
- A carrier picks up the order. The package goes to the nearest sorting center for distribution to the city closest to the destination.
- A delivery driver drops the order at the doorstep of the customer.
UPS, FedEx, and USPS are the biggest carriers in the US. They form a vital link in the order processing chain. We rely on these services to deliver orders within a set window of time.
Every step in the order fulfillment process includes a time component. You need to relay each order from your sales platform to your 3PL. That allows order processing to start right away. Same-day fulfillment means processing orders the day they are placed. That way, orders get onto delivery trucks right away. You need all these systems and processes to run smoothly to keep the customer happy.
Once an order is in the hands of a carrier, there is a set time for delivery. Delivery times are usually based on shipping zones. Shipping zones represent the distance the order has to travel from the fulfillment center to the customer.
In the second half of 2020, carrier delays began to increase the amount of time it took for order processing. These slowdowns were beyond merchants’ control. Still, all the customer knew was that you didn’t deliver their order on time. Many businesses experienced customer service issues caused by limited carrier capacity.
What is limited carrier capacity?
You may have heard from your 3PL that order processing delays were due to limited carrier capacity. In some cases, this may have been a convenient excuse for warehouses that had fallen behind on order fulfillment. However, limited carrier capacity did affect many eCommerce fulfillment operations.
When COVID hit the US, consumers switched to online shopping. Carriers like FedEx and UPS suddenly had to deliver everything from groceries to gifts to medical supplies. The volume of orders carriers had to process was several times larger than their maximum capacity. Then demand spiked even more during the holiday rush. The major carriers weren’t able to carry all the packages that online retailers wanted to ship. This has led to order processing delays.
FedEx, UPS, and USPS are all pros when it comes to handling the holiday rush. In a typical year, if your sales double, your carrier can handle the additional volume. However, during the pandemic, sales grew across the eCommerce industry all at once. Carriers couldn’t accommodate the huge and rapid increase in volume.
Most fulfillment centers have a scheduled carrier capacity from the carriers they work with each day. During the 2020 holiday season, these limits delayed some orders leaving the warehouse. The carriers simply weren’t able to handle the volume of orders shipped by eCommerce businesses.
Companies that shipped a high volume of orders were hit hardest. Some were told by their regular carrier that it would only pick up a certain number of packages per day. That sometimes led to a backlog of boxes sitting on the dock. Order processing centers scrambled to find other carriers. Some sellers switched to shipping USPS. This added a significant burden to a carrier that was already struggling with longer-than-usual shipping times.
How to reduce order processing delays
There’s nothing more frustrating than tracking a package and watching it stuck in transit for days on end. As of this writing, there are probably still some holiday orders that haven’t reached their destinations. The problem is compounded by customer expectations for faster and faster eCommerce shipping.
The limits on carrier capacity were an industry-wide problem. This worked in favor of your business. Customers are more likely to be understanding about long shipping times if they understand the issue is global. Many companies added warning banners to their eCommerce sites. They gave the customer a heads up about longer-than-usual shipping times due to COVID. It’s better to underpromise and overdeliver.
Communication throughout order processing is essential to customer satisfaction. This is even more true when there are hiccups in processing orders.
There may not be much that your business can do to mitigate carrier capacity problems in order processing. However, your fulfillment company is a high-volume shipper. It has more leverage to work with carriers. Your 3PL can help you get orders to customers on time.
What Red Stag Fulfillment does to ensure a smooth order fulfillment process for its clients
At Red Stag Fulfillment, we have had some of the same issues with limited carrier capacity as other 3PLs. We already had a limit on the number of trailers each of our warehouses receives in a day. This is the industry-standard operating procedure.
Still, we have been able to cope better with carrier limitations than many 3PLs. Red Stag’s VP of Client Relations, Tony Runyan, credits process management savvy plus hard work.
“We were diligent in keeping our finger on the pulse of the situation,” Runyan explains. “We went so far as to check hour-by-hour for updates and make constant adjustments. In addition, we were able to leverage strong carrier relationships to maximize and optimize carrier capacity for our clients.”
Expanding to a broader set of carriers was an essential strategy for Red Stag. “We relied heavily on our close client relationships,” Runyan says. “We are extremely grateful for clients that allowed us the flexibility to adjust carrier options, optimize their shipments, and find alternative solutions. Red Stag also continues to build relationships with regional carriers. That will allow us to continue adapting to the ever-growing demand.”
Red Stag Fulfillment has systems in place to make sure we can deliver each order quickly and efficiently. We leverage technology and streamlined management processes to make sure your business runs smoothly. We share information up and down the supply chain to optimize our operations.
Order processing in 2021
After the past year, we know better than to make predictions about order processing in 2021. In an average year, after the peak holiday season, demand will slow down. Carriers will return to their regular capacity limits. The caps for each business will return to normal.
However, as 2021 begins, peak shipping may continue for months or even the whole year. For many consumers, the switch to online shopping will be permanent. Expect order processing volumes to remain higher than they were before the pandemic.
The new year gives the industry more time to prepare and add capacity. Hopefully, carriers will be better equipped to handle next year’s holiday rush. No matter what, Red Stag Fulfillment is already making plans and adjustments to ensure that we are ready for whatever this next year brings. We’re preparing now to make sure our clients’ orders are processed and shipped on time for the 2021 holiday season.
