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on November 3, 2020 by Rob Hahn in Fulfillment, Marketplaces

What Is “Shipageddon” and How Will It and COVID-19 Impact My Business Logistics?

What is “shipageddon” 

With the holidays fast approaching, many ecommerce experts have predicted a “shipageddon” phenomenon with delays and chaos adding to the end-of-year drama. Should you believe the hype? Is there anything your business can do to batten down the hatches and ensure a safe transfer into 2021? Put simply, yes. 

Despite a challenging year for most businesses, ecommerce has experienced tremendous growth in 2020. As consumers hunkered down at home, online shopping became a lifeline to household essentials of every kind. The digital transformation we’ve been preparing for suddenly kicked into high gear with shoppers in every age bracket turning to online commerce for the first time and repeat purchases at increasingly higher volumes. Holiday shipping and logistics will be especially impacted by the continued COVID-19 pandemic.

“Shipageddon” is real

First things first, “shipageddon” fears are legit. Jason & Scot Show host, Scot Wingo explained in a recent episode that despite FedEx’s growth in a personal capacity as reported in its recent annual earnings, ecommerce is growing much faster. The carrier’s good news is overshadowed by the surging demands of online consumers, thanks to the pandemic and shifting stay-at-home orders across the country. 

The early bird may very well catch all the worms this year. Consumers have been shopping earlier and earlier each year, and this year will prove no different. Whitebox spotted early signs of the holiday crunch around Halloween. Search for Halloween items peaked as early as the last week in September, with an 83% increase in decorations, for example. Early numbers for end-of-year holidays show similar jumps. 

FedEx and UPS are bracing for a tough COVID holiday logistics season. Media outlets have reported a potential shortfall of 7 million packages a day between Thanksgiving and Christmas. With strains across their operations, carriers are responding with extra holiday fees that will have to be absorbed by either the retailer or the consumer this year and into 2021.

How your business can succeed during “shipageddon” in the midst of COVID-19 and the holiday season

Where others may despair, Whitebox sees an opportunity for those that prepare early and fast. Here are our predictions for shipping and how you can steer your business toward success during the COVID holiday logistics season.

  1. Small is the new big. Large national carriers see the forest through the trees and know that with increased demand comes an increase in infrastructure investments. And, someone has to pay for it. The bottom line is the largest base rate increase in history is not only possible but probable. BUT, here’s the glass half full version. . . smaller regional carriers can swoop in with competitive services at faster speeds while increasing their footprint.

    Takeaway: Consider a carrier-agnostic approach for this holiday season and beyond. Like any investment, diversification can keep your options flexible and maximize growth. 

  2. Transparency is table stakes. Consumers get it; you can’t always get what you want when you want it. We all learned that lesson in the height of the pandemic when toilet paper was the hottest commodity and hard to come by. Carrier delays will run 1-2 days conservatively during peak times from late November through December.

    Takeaway: Consumers respect honesty and transparency so set their expectations accordingly about shipping times. Consider messaging on your website that clearly and visibly addresses delays. 

  3. Expand your (and their) choices. Amazon and larger marketplaces will put the consumer experience first. That’s not always favorable to the seller, however. New restrictions to programs like Seller Fulfilled Prime, for example, may protect the consumer at your expense. Similarly, large retailers may expand drop-ship and ship-to-store programs, which increases the urgency for more available shipping options. The good news is consumers are changing all the time, and speed isn’t the only (or first) priority anymore. Selection is growing in importance, and many are willing to wait and pay for precisely what they want.

    Takeaway: Empower the consumer to make the choices that work best for them. Offer expedited shipping and adjust pricing for those consumers who want it now versus lower costs for slower delivery services like Surepost.   

  4. For a year full of unpredictable highs and lows, businesses can and should prepare now for a predictably busy holiday season and 2021. Whitebox is here to answer any and all questions to customize a strategy for your business goals. 

Similar to our Whitebox Flash Alerts: COVID, we will be updating this page with Whitebox Flash Alerts for 2020 Peak to keep our clients and partners up to date on the latest news and updates from carriers and marketplaces. 

 

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