Facing The Challenges Of Shipping – How You Can Set The Bar Higher In The Freight Industry

By 2021, global B2C e-commerce sales are expected to surpass $4.5 trillion—almost double the $2.3 trillion reached in 2018.

But alongside the explosive growth of online selling, customer expectations have also soared.

If you’re an e-commerce retailer, not only should your line of products be of optimal quality, you need to be able to get them to your customer’s door as quickly as possible.

If you don’t, your competitors are lining up to scoop up those sales.

Abandoned Carts Due To Delays in Delivery

38 percent of online shoppers will abandon their orders if delivery takes more than a week. Amazon is setting the bar incredibly high with its two-day, next-day, and same-day delivery options. Customers increasingly expect on-demand access to products and services, and this heightened expectation poses great challenges for shipping and fulfillment.

B2B Penalties and Challenges – Impact On Retailers

Aside from direct to consumer online sales, shipping and fulfillment challenges can also have an impact on online retails who also sell their products through larger retailers.

In the U.S., retailers have become increasingly stringent when it comes to their suppliers’ order fulfillment.

Apart from the fines, suppliers may also be either blacklisted or excluded from promotions and left off dedicated shelf spaces. This can potentially add up to crippling losses for businesses.

Dissatisfaction Rating – Driving Away Your Customers

Around 69 % of consumers are less likely to do business with a retailer again if a purchase is not delivered within two days of the promised date. With the hyper-competitive e-commerce industry, there are plenty of options to turn to if customers are left dissatisfied.

It doesn’t just end with losing business from that one dissatisfied customer. People want to share their experiences—whether on social media or with their peers—which means your business reputation can take an exponential hit.

This is why it’s important to build relationships—and a great way to do so is by keeping a promise.

International Competition is On the Rise

The U.S. share of global retail e-commerce is expected to continue to drop to 16.9 percent by 2021—down from 22.2 percent in 2015. Of course, this is not to say that U.S. e-commerce sales are declining. It’s just that sales all over the world are rapidly increasing, most notably in Asia.

From this perspective, you can see how the quality of shipping and fulfillment has become almost as important as the quality of the products itself.

Apart from the obvious added costs of shipping overseas, international shipping also entails getting acquainted with rules and regulations, as well as the required paperwork and permits.

Tax and duties are also mostly country-specific, so you’ll have to keep that into consideration as well.

Think On Your Toes!

The best way to tackle the complex process of international shipping is by planning ahead. This entails building an information database with shipping rates for different package sizes and weights for the different countries you could ship to.

While this could be time-consuming, it allows you to set prices confidently and be prepared for any issues that may arise.

And if you have the resources for it, you could also opt to employ an e-commerce fulfillment service provider.

These businesses can provide you with all the rates and importation fee information you’ll be needing.

Communication and Transparency

The key here is to be transparent with your customers. While they may not expect to get their items overnight, it’s best to tell them just how long it could take, and offer shipping options.

A lot of customers are willing to pay a premium to get their orders sooner.

It’s important to keep in mind that no matter how seasoned the supplier you’re reaching out to is, they’re just trying to run a business—just like you.

Part of doing business is answering questions and concerns, so if you want to clarify anything—ask.

Perfect Your Inventory Management Strategy

Proper inventory management can address issues like these on the front end. Track inventory as it enters and leaves the warehouse with a centralized system.

Also, don’t neglect your warehouse conditions. Make sure your inventory his housed safely, and that it’s double-checked before being sent out. It would also be wise to invest in quality packaging and insurance.

Because each carrier has a unique set of services and prices, it’s important to practice due diligence when it comes to analyzing what your needs are.

For example, a lot of carriers offer packaging tailored to specific requirements. Opting for this instead of investing in your own is a good way to avoid added costs.

There are also mail carriers that provide fixed-rate shipping based on the distance a package has to travel. If you frequently ship to a certain location, see if the flat rate shipping is a more cost-effective solution.

Be Tech-Savvy!

Keep your finger on the pulse of technological developments. While not every innovation that comes along fits your business needs, you need to be aware of what options are available.

Automation allows you to be more effective and efficient in monitoring, tracking and moving orders throughout the supply chain. You might also find that having an e-commerce app boosts sales.

It may take an upfront investment, but it could ultimately boost your bottom line.

Be Proactive!

It’s easy to overlook when you’re just starting a business, but shipping and fulfillment problems quickly turn into a tremendous concern.

From warehousing, order fulfillment, and international shipping, a lot goes into making sure your products reach your customers.

But while it might seem overwhelming, there are a number of solutions providers that can help you at virtually every step of the way.

Make sure you cover all the bases to ensure that your customers don’t turn to your competition.

How To Mitigate Risks In A Global Supply Chain

A global supply chain can be defined as both a simple yet complicated system. It’s a paradox.

What is the Global Supply Chain?

Also referred to as a global value chain, this pertains overall to a chain of activities, systems, tools, networks, and people that businesses use in their daily operations or for production and delivery of products and services worldwide.

There are a lot of facets or movable parts involved in a global supply chain which are crucial to keep businesses running.

This would usually involve the manufacturing and distribution processes. This could also involve the marketing department. It would all depend on what kind of business or industry you’re in.

For businesses, the freight forwarding and shipping industry is an important part of the global supply chain.

Any resource or company that adds value to your daily business operations is a part of this global value chain, such that if one breaks down then you could encounter glitches in your business.

Yes, there is an interdependence that exists in this global supply chain. It is complex when seen from one point but it becomes crystal once you look at the bigger picture.

Advancements in technology, the internet, and even outsourcing have contributed to the greater impact of globalization on international trade.

Supply chains are really interconnected such as that they share certain benefits and even vulnerabilities along the way. 

Risks in the Global Supply Chain

Systemic risks are on the rise especially with the advent of new technologies coming out.

In addition, economic, health, political, and even cyber risks are now a large part of the challenges that global supply chains are trying to combat on a daily grind.

A risk management system or stress-testing should be in place to understand the nature of these risks and how to successfully manage its effects.

From pandemics such as the COVID-19, national disasters, economic and political turmoil, fluctuations in supply and demand, and even failures encountered in the supply value chain, globalization would mean that your business should have a hedge or contingency plan enabled for these risks.

The challenges now with global supply chains and for the freight and shipping industries are to be prepared for disruptive events.

Now is certainly dubbed as a time or period of uncertainty, and there are strategies that will help reduce the magnitude of risks while improving performance in the global supply chain.

Compartmentalize or Contain the Disruption

You have to contain the disruptive element that happens in the supply chain. Just as in anything contagious, you can limit transmission by encapsulating it to just one section of the global supply chain. In this way, you get to reduce the risks and also improve performance.

Segmentation is important so you contain the ill effects or reduce the impact of ongoing and recurring disruptions in the supply chain.

Today, there is a call for supply chains to be more specialized and flexible in terms of capacity to handle both low-volume and high-volume commodities with varying demand levels.

Do Not Be Afraid To Trade Off Some Success To Reduce Risks

Businesses may be reluctant to take steps on mitigating risks with the fear that performance could drop with this maneuver.

However, there is an advantage in overestimating disruptions rather than underestimating its likelihood because you get to deal with it right now and get it done and over with.

But, if you prefer to just sit on the sidelines and do nothing, then that could be an expensive risk in the long run.

Don’t Put All Your Eggs In One Basket

A lot of companies go wrong when they forget to spread their risks and just concentrate or pool everything into one chain. This creates or maximizes your vulnerability for disruptions.

Having a centralized or common inventory makes one an easy target for just about anything. You can’t depend on a single source for everything because if that corrodes, then you got nothing else to leverage on.

There should always be a balance in the push and pull of your business movements. You can’t go into extremes like having just one supplier because it increases your risk levels and costs.

This makes your business more fragile. The ability to be flexible, responsive, and capable of having a plan B in everything creates equilibrium in your supply chain.

Be Armed with a Risk Mitigation Strategy

Having advanced IT systems enable businesses to monitor the flow of their transactions 24/7.

They get to be on the radar or on top of the supply chains as these systems would automatically send alerts when something goes off.

These contingent and recovery measures are also part of ensuring business continuity when worse comes to worst.

The mindset here is to always overestimate and exaggerate the disruptions so you can heighten performance and have backup options ready for recovery.

 This helps your global supply chain become more competitive and resilient in the face of any attacks or disruptions that target your business or supply chain.

It Pays to be Redundant Than Complacent

Redundancy is in fact more effective than complacency especially when it comes to safeguarding your global supply chain from disruptions or attacks that can help you be in combat mode and ready for anything.

Know The Differences Between A Freight Forwarder And Freight Broker

Technical jargon in business can be a pain to digest. It can be confusing and overwhelming especially when you are trying to figure out which one could provide you the exact services you need for your personal or business needs.

Well, we aim to simplify and scratch the guesswork with this comparative guide on the main differences between freight forwarders and freight brokers.

Although the two could often be used interchangeably in the industry when it comes to cargo shipping or delivery, it actually provides entirely different services.

Well, they do have something alike, as both help with arranging transportation or moving of cargo but have their own respective modalities of executing their services.

What is a Freight Broker?

Freight brokers serve as intermediaries or middlemen that connect the shippers with multiple carriers plus also manage or arrange the movement of goods.

To gain the authority of performing such services, it’s required for freight brokers to register with the Department of Transportation’s Federal Motor Carrier Safety or FMCSA and US Federal Highway Administration with a trust bond of $10,000.

Basically, shippers would contact freight brokers to connect them with third-party companies like freight forwarders or carriers that would coordinate transportation of cargo.

However, freight brokers do not own transportation vehicles such as containers, ships, trains, trucks, and airplanes. More so, they do not cover preparation of paperwork or insurance and other fees.

They basically just make the necessary arrangements with shippers and freight carriers. The rest would be managed by the freight forwarding company.

With that being said, a freight broker has limited legal responsibility or liability for the freight because they do not take actual possession of your cargo. They also ship goods under the cargo owner’s bill of lading.

What is a Freight Forwarder?

A freight forwarder has that functionality of a freight broker plus MORE.

They cover more bases and provide specialized services for clients. Well, freight forwarders do not just arrange or manage the transportation of cargo but can do both local and international movement of goods.

They take actual possession of cargo or freight and have the carrier assets to handle storage, packing, and the like.

Freight forwarding companies perform an integrated and consolidated service that handles cargo space, assembles and packs goods, negotiates the best rates with carriers, forwards shipments, handles insurance and paperwork, and transport with their own house bills of lading.

They would usually have their own containers to prepare and consolidate cargo in preparation for shipping.

They can also handle small to large or bulk shipments which are integral to freight logistics. They also have a greater legal liability as opposed to freight brokers and would need to insure the cargo.

In essence, they would need more capital, manpower, and advanced technology to handle the business. This is a data-driven industry that requires more dynamics to make up a seamless flow of processes.

Freight Broker or Freight Forwarder? Decrypting the Jargon

There may be some overlap of functions when it comes to freight forwarders and freight brokers. There is always that gray area in any business that allows a company to innovate and bend without breaking.

Legal liabilities would differ especially because freight forwarders have more coverage and control of the movement of cargo than that of freight brokers.

Thus, the freight forwarder then takes on full responsibility from the actual receipt of cargo to its final destination.

There you go! Now, that pretty much clears up the confusion. One might have the advantage or edge over the other at many points.

Would you hire a freight broker or freight forwarder to move your cargo? OR perhaps, get the best of both worlds with us here at Package Forward.

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