Customers want their items fast, free, and on-time. It’s your job as a retail logistics operator to put their needs and desires first and use the best carrier for the job, not just the one you are locked into. I learned the value of this lesson in the early 2000’s when helping Amazon switch from solo dependency on UPS to a multi-carrier mix to drive shipping speed and cost improvements.
The power of flexibility is available to everyone and starts by ditching the single-carrier relationship model you’ve been reliant on for years. It’s not getting better—in fact the performance of each of the three national carriers has steadily declined due to structural issues including poor earnings, supply chain issues and constrained labor.
Despite the threat of inflation, consumer spending online is on track to hit the $1 Trillion mark in 2022. To take advantage every retailer should adopt a multi-carrier model to put the customer experience first.
Single Carrier? Single Failure
What’s wrong with the single-carrier model? To find out, we indexed the top 750 eCommerce retailers by annual online revenue based on the industry data provided by EcommerceDB.com. We investigated their online shipping policies and went through the buying process to view shipping options at checkout. We then cold cross-referenced whether or not a given retailer used a single carrier.
We found 22% or 165 retailers stated or demonstrated that they used a single carrier. An additional 17%, or 127 retailers, used two carriers, but the format was primarily relying on one of FedEx or UPS, then using The Postal Service for P.O. Boxes only.
Combined, 39% or 292 of the top 750 online retailers relied on a single carrier. That’s a lot of assumed risk during peak shopping seasons.
Moving from a single to multiple carrier strategy helps you get out from under the thumb of carrier limits or poor performance. It also provides the modern operations leader the ability to arbitrage services to drive the best rate. This is the fastest way to reduce costs while ensuring performance remains acceptable.
Carrier Flexibility = Customer Loyalty
Fixing this problem requires both a business strategy and a technology solution working in partnership.
The business portion is logically simple: secure more contracts, like regional carriers, specific to your shipping profile either directly or through a third-party logistics provider.
The technical solution has historically been complex, requiring multi-month TMS integration and lots of manual analysis to configure for fast or low-cost shipping options (but typically not both). This painful work is the reason why 39% of the top 750 retailers still rely on a single carrier solution; change has been too painful.
Enter Shipium. We help retail businesses put logistics management technology at the center of their growth strategy. Retailers can plug in carriers and optimize their last mile instantly to improve delivery speed and reduce shipping costs. The resulting carrier flexibility delivers shipping speed, which makes online shoppers very, very happy.
Hear from Jason as he chats with Sarah Barnes-Humphrey all about how to step up your e-commerce game.
You’ll hear about:
- Jason’s long-standing career at Amazon, and how his experiences led him to co-found Shipium.
- The technology behind the Shipium platform, and a closer look at the onboarding and implementation process.
- The next stage of the ecommerce evolution, and the role that home delivery will increasingly play in successful business strategies. Plus, Jason Murray tells how Shipium helps businesses to implement an affordable, fast shipping program, leading to an average 5-10% improvement in conversion and 5-15% improvement on shipping costs.
About the Author
19 years as VP of Retail Systems, Forecasting and Supply Chain at Amazon and responsible for the development of the tech stack that powered Prime. Co-Founder and CEO of Shipium, a Seattle-based start-up that enables retailers to optimize shipping for cost and speed.