Delayed Shipments Continue!

One of the ramifications of working for a large integrated carrier for as long as I did, is that friends and family often came to me when they were having problems receiving something they ordered or sent.  So, besides managing relationships with some of UPS’s largest customers, in my spare time I was often asked for help or advice with personal shipments (Grandma’s lost shipment of cookies, critical parts needed for a friend’s business, daughter’s prom dress that had not arrived etc.). So, I was not surprised last night when my wife told me about a problem she was having with something that she had ordered on Black Friday.

She read the following email to me that she had received after inquiring about her order (names changed to protect the innocent).

Hey there Mary,

Thanks for reaching out. I’m sorry the fulfillment timeline might not work out this time. We know that many customers are experiencing an extreme delay in receiving their orders. No excuse will help now, but the truth is that we moved to a new (we thought more robust) fulfillment partner. They have failed to deliver, big time. We are rearranging inventory to another warehouse as we speak.

To make it up to you, we have refunded you in full to the original payment method for your order. We will still get this order shipped as soon as we can, and we expect more updates to come regarding your order status by end of week. You should’ve received an email confirmation of the refund as well. We apologize for the screw up, but thanks so much for ordering with us! We hope you can enjoy that order on us.

If you need anything further, please let me know! I’m happy to help.

Have a great day,

Elizabeth

This email totally struck a nerve, because I had just written a blog about delayed deliveries last week! This situation totally touched on the 3 points that I had written about; Honesty, Communication, & Choice! 

On the positive side, this shipper did an excellent job with the Honesty perspective. They acknowledged and explained the cause for the delay, and explained what they were doing to rectify the situation. They also kept the email positive and upbeat! 

But what did they do wrong here?  There are a couple major things that could have been done better. First and foremost is Communication. Obviously they knew about the problems they were having with their Fulfillment process. They could have done some damage control and proactively notified my wife of the delay. After all, she did place this order three weeks ago!

 I am certain that my wife would have felt a lot better if she had been made aware of the problem/ situation. Instead she was left wondering, and was forced to reach out to the company to inquire about her order. As described in my previous blog, she experienced the “salt rubbed in the wound” effect! Also, the shipper may have avoided the need to provide a refund if they had just provided a proactive update. 

However, the big miss here is with Choice! The company did acknowledge that they misjudged the abilities of the 3PL they had chosen to perform their Fulfillment. So, it is apparent that they did not perform the proper due diligence to determine this vendor’s capabilities. 

I cannot say that I blame the folks that made the decision to partner with a particular vendor. I realize that the E-Commerce Warehousing & Fulfillment space is large and complex. I do not envy today’s Supply Chain Professional that needs to juggle the daily demands of their jobs, and then make crucial decisions regarding choosing a 3PL that is equipped to support their company’s needs. Properly vetting out and managing a 3PL can be a full time job in itself!

The message that I would deliver to the folks that made this poor decision, as well as all others in the Supply Chain Logistics space is that there is no need to take on the daunting task of choosing the right 3PL by yourself. ICC Logistics has the expertise, knowledge and resources available to help you make the right Choices. I can assure you that your company will not need to send out painful emails like the one provided above if you allow ICC to assist you with choosing the right Fulfillment partner. At the same time, you may be able to give me one less order fulfillment issue that I need to deal with in my personal time. Thanks in advance for your help with this! 

Delayed Orders Are on the Rise

“Your order has been delayed.” These are 5 words that e-commerce consumers hate to hear or see!

Anyone that has ever experienced a delay in receiving something they ordered knows how frustrating this can be. Unfortunately, in todays challenged Supply Chain environment, delays have become all too common.

There are a large variety of things contributing to a spike in the time it is taking for consumers to receive their orders these days. These include challenges with obtaining raw materials, Covid driven shut downs, worker shortages, Port congestion, cost reduction efforts, along with Carrier capacity issues to name just a few.

Given the wide range of supply chain challenges, shippers are left wondering what they can do to minimize the pain, suffering and anxiety that their customers are feeling due to the uncertainty that exists in the world.  After all you can only control what is controllable.

So what are the controllable factors that a shipper should consider to help drive customer loyalty?

  1. Honesty- It is extremely important to always be honest and upfront with customers. For example; If you don’t have the item in stock and can’t provide delivery to the customer within a reasonable amount of time, don’t take the order. Or at the very least, let the customer know when they can expect delivery prior to check-out, and allow them to decide if they can wait.

There is nothing worse than allowing a customer to use their valuable time to enter an order, only to receive later notification that the order could not be fulfilled.  This can contribute to customers losing trust in your company/brand.

It is important that shippers are honest with customers throughout the purchase and post purchase process. After all, Honesty builds Trust, Trust builds Loyalty, and Loyalty leads to more Sales!

  1. Communication- Once you have the order, it is now up to your Fulfillment operation and Carriers to get the order moving and delivered within the expected time frame. Unfortunately, these two things are not completely controllable. So, the bottom line is that you need to have a solid communication process in place, to inform your customer of these unanticipated delays.

As mentioned above, customers hate hearing that their order has been delayed. However, they hate not hearing anything even more! There is nothing worse than having a customer reach out to you proactively with a “Where is my order” called a (WISMO call). Having an order delayed without explanation or notification to the customer, it is like rubbing salt in a wound.

Shippers should consider implementing an internal process that notifies customers when there are delays prior to shipping. If/ when this occurs, the customer should be quickly notified. A simple email that informs the customer of the unanticipated delay will take a lot of pain out of the process. The message should be honest, apologetic, but upbeat. For example, the message could read:

“Sorry, but we were caught off guard with the popularity of our products. This has caused a delay in our ability to ship your order today. We know that you are excited about receiving your order, so our operations team is making every effort to get this shipped ASAP. We apologize for this delay, and are committed to insuring there are no further delays. Once again we apologize for any inconvenience and disappointment that this is causing for you. “

Or

“We tried our best to get your order out today, however we were not able to do so. We have prioritized your order and have confirmed that it will go out tomorrow. We know that you are anxious to receive our product, so we apologize for the frustration this may cause. Please be assured that we value your business and are equally disappointed that we could not get it shipped today.”

Similarly, Shippers need to have a process in place to inform customers when there are carrier driven delays. It is important for shippers to differentiate between Fulfillment vs Carrier delays. It has become somewhat of a common practice for shippers to point all delays towards their Carriers. Shippers often provide a tracking number to a customer even before the order has left their Distribution Center. So, customers often assume that all delays are due to carrier issues.

This is a great way to deflect away from your company. However, this could be equally damaging to the customer’s perception of your company/ brand. Customers are a lot more savvy these days. So, when they track a package in a carrier’s system and only see a “Label Created” event, it is likely that they will know that the shipper has not handed the package over to the carrier. So, failing to be honest regarding the nature of the delay, could be just as damaging as the delay itself. Furthermore, if the blame for delays is always passed onto the carrier, customers will be left thinking “Why do they use this carrier if there are constant delays?”

Implementing notifications for carrier delays should be an easy lift for most shippers if they are using the larger Integrated Carriers like FedEx and UPS. Both of these companies have off the shelf proactive notification products that are fairly easy to implement. Additionally, for shippers using a variety of carriers, regional carriers, or the USPS, there are a host of Post Purchase technology companies that can provide visibility and pro-active notification services. So, either way, it should be fairly simple to engage a process to inform customers when there are carrier delays. The cost to implement these processes often pays for itself due to the reduction of cost associated with the reduction in WISMO calls that this will drive.

When properly implemented, your customer will automatically receive notification of delays directly from your carriers. However, as an added step you may want to consider sending a direct communication from your company to acknowledge the issue and assure the customer that you are working on it. An email might read as follows;

“We notice that your order has been delayed due to an issue with our Carrier. Please be assured that we are working with them to help minimize this delay. We value your business and are committed to providing timely delivery for all of your orders. We apologize for the inconvenience that this may cause for you.”

  1. Choice – let’s face it. There are a lot of choices to make in the Supply Chain and Logistics world to help control the controllable. Shippers need to choose the right Fulfillment options, Carriers, and Technology to insure that they minimize issues. Shippers need to make the right decisions to help drive a best in class customer experience.

Questions that need to be answered include;

-Should we insource or outsource our Fulfillment operations?

-If outsourcing, who should we use?

-Where should our Distribution Center(s) be located?

-What carriers can contribute to the best customer experience?

-What technology should we use to help drive a best in class customer experience?

-How will we measure the effectiveness of the choices that we have made?

Surveys have shown that a negative customer experience is the reason 86% of consumers quit doing business with a company, and that good customer experiences lead 42% of consumers to purchase again. So it is imperative that shippers make the right decisions to minimize problems, and to have the right processes in place when problems do occur.

We know that making the right decisions can be a daunting task for shippers given the complex web of companies that exist in the Supply Chain & Logistics space. Thankfully there are companies that have a great deal of experience and insight that can help shippers make the right choices.

Please reach out to ICC Logistics to find out how we can help drive a successful Customer growth and acquisition strategy, and contribute to your company’s success.

 

USPS Announces New Prices for 2023

A recent announcement from the US Postal Service claims that it offers some of the lowest shipping rates in the mailing industry and is a great value to reach the more than 163 million delivery points they service across America.  To highlight this announcement, the USPS is reporting the following:

  • No price increase for Parcel Select Ground which, coupled with our recently improved service standard to 2-5 days from 2-8 days, offers a reliable and economical option for shippers
  • No price increase for USPS Connect Local, which gives businesses of all sizes the ability to reach local customers at affordable rates
  • Reduced pricing for some Retail Priority Mail Flat-Rate products below the temporary price currently in place
  • Priority Mail Commercial rate to increase by 3.6 percent, well below the rate of inflation

So that’s the good news.

And then there is some mixed news as well.

The U.S. Postal Service has filed notice with the Postal Regulatory Commission (PRC) today of price changes for Shipping Services to take effect Jan. 22, 2023.

These proposed prices were approved by the Postal Service governors. Notably, there is no price increase for Parcel Select Ground, which continues to be a reliable and economical shipping option. The pricing for USPS Connect Local will remain unchanged. This service provides businesses with an affordable same-day and next-day delivery for their local customers.

In addition, some Priority Mail flat-rate retail product prices will be reduced compared with the temporary rate adjustment currently in place, and Priority Mail commercial rates will increase by only 3.6 percent, well below the rate of inflation.

Overall, Priority Mail service prices will increase approximately 5.5 percent, Priority Mail Express service prices will increase by 6.6 percent, and First-Class Package Service prices will increase by 7.8 percent. The PRC will review these price increases before they are scheduled to take effect, but you can expect them to be approved without change.

Shipping Services price adjustments will vary by product. Although Mailing Services price increases are based on the consumer price index, Shipping Services prices are primarily adjusted according to market conditions. The Postal Service governors evaluate shipping rates and fees and adjust them when needed, as part of the Postal Service’s 10-year “Delivering For America plan” which is designed to reverse a projected $160 billion in operating losses over the next 10 years.

The Postal Service’s often heard “public service announcement” states the following:

“The USPS has some of the lowest letter mail postage rates in the industrialized world and also continues to offer a great value in shipping. Unlike some other shippers, (the proper description is Carriers and not Shippers, btw), the Postal Service has upfront pricing and does not add surcharges for residential delivery or regular Saturday delivery.  The Postal Service generally receives no tax dollars for operating expenses and relies on the sale of postage, products, and services to fund its operations.”

Here are the proposed domestic Priority Mail Flat Rate retail price changes for 2023:

ProductCurrentPlanned Change
Small flat-rate box$10.40$10.20
Medium flat-rate box$17.05$17.10
Large flat-rate box$22.45$22.80
APO/FPO large flat-rate box$20.95$21.20
Regular flat-rate envelope$9.90$9.65
Legal flat-rate envelope$10.20$9.95
Padded flat-rate envelope$10.60$10.40

The complete Postal Service price filings with prices for all products can be found on the PRC website under the Daily Listings section at prc.gov/dockets/daily. For the Shipping Services filing, see Docket No. CP2023-42. The Postal Service provides additional resources to assist customers regarding the price changes. These tools include price lists, downloadable price files and Federal Register Notices. This information will be available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index on Wednesday November 16, 2022.

U.S.P.S Announces New Prices for 2023

U.S. Postal Service Announces New Prices for 2023-Forever Stamp to Rise Three Cents

The old adage, “what goes up, must come down” certainly does not apply to any parcel shipping rates.  To no one’s surprise, the United States Postal Service, (USPS), has filed a notice with the Postal Regulatory Commission (PRC) of price changes to take effect Jan. 22, 2023. The new rates include a three-cent increase in the price of a First-Class Mail Forever stamp from 60 cents to 63 cents.

If favorably reviewed by the Commission, (and there is no reason to believe it will not be approved), the proposed increases will raise First-Class Mail prices approximately 4.2 percent to offset the rise in inflation. The price changes have been approved by the Governors of the U.S. Postal Service.

 

  • The price for 1-ounce metered mail will increase to $0.60, and the price to send a domestic postcard will increase to $0.48.
  • A 1-ounce letter mailed to another country would increase to $1.45. There will be no change to the single-piece letter and flat additional-ounce price, which remains at $0.24.
  • The Postal Service is also seeking price adjustments for Special Services products including Certified Mail, Post Office Box rental fees, Money Order fees and the cost to purchase Insurance when mailing an item.

The proposed Mailing Services price changes include the following:

ProductCurrent PricesPlanned Prices
Letters (1 oz.)$0.60$0.63
Letters (metered 1 oz.)$0.57$0.60
Domestic Postcards$0.44$0.48
International Postcards$1.40$1.45
International Letter (1 oz.)$1.40$1.45

According to USPS sources, as operating expenses continue to rise, these price adjustments provide the Postal Service with much needed revenue to achieve the financial stability sought by its “Delivering for America 10-year plan.” The prices of the U.S. Postal Service remain among the most affordable in the world.

The PRC will review the changes before they are scheduled to take effect. The complete Postal Service price filing, with prices for all products, can be found on the PRC website under the Daily Listings section at prc.gov/dockets/daily. The Mailing Services filing is Docket No. R2023-1. The price tables are also available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index.

And the constant reminder we receive from the USPS every time they increase rates, “the Postal Service generally receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.” 

For more information on this or to find out how to navigate rising transportation and logistics costs, please contact us.

APphoto_UPS-Holiday Packages

UPS Peak Season Surcharges Announced

Large Parcel Shippers May Bear the Brunt of the increase!

As reported by Supply Chain Drive, and following the lead of FedEx as well as the US Postal Service, UPS has announced their 2022 Peak Season Surcharges.   It is expected that UPS’ Peak Season Surcharges will very likely impact high-volume shippers which expect elevated home delivery demand during the holidays.

Beginning Oct. 30, 2022, customers billed for more than 20,000 packages any week after October 2021 will see a “Peak/Demand Surcharge” applied to certain UPS Air Residential, Ground Residential and SurePost shipments, according to the carrier. The fee will be active until Jan. 14, 2023.

The surcharge is applied on a weekly basis to all packages over 105% of the baseline volume for each service. The baseline volume is the customer’s average weekly volume from June 5 through July 2 for the applicable shipping service. But UPS will use the average weekly volume from Sept. 4 to Oct. 2 instead if it is less than 80% of the June-July period’s volume.

UPS per-package peak surcharge, based on shipments over shipper’s ‘baseline volume’

105%-125%125%- 150%150%-200%200%-300%300%-400%Over 400%
UPS SurePost$1.25$1.75$2.00$2.50$4.25$6.00
UPS Ground Residential$1.25$1.75$2.00$2.50$4.25$6.00
UPS Next Day Air Residential$2.25$2.75$3.00$3.50$5.25$7.00
All Other UPS Air Residential$2.25$2.75$3.00$3.50$5.25$7.00

NOTE: Surcharge is active from Oct. 30 until Jan. 14, 2023.

UPS will charge shippers the highest applicable surcharge they reach. For example, if a customer ships 175% of their baseline shipping volume for the Ground Residential service in a given week, they will be charged $2 for all packages that go above 105% in baseline volume.

UPS is also raising its per-package surcharges for additional handling (from $3.50 to $6.50), large packages ($40 to $70) and packages in excess of its maximum shipping limits (no charge to $400) on qualifying customers. The new prices for these surcharges are active from Oct. 2 until Jan. 14, 2023.

Amazon by the way, is also rolling out its inaugural peak season fee on its fulfillment services for third-party sellers.

These Peak Season Surcharges should come as no surprise to parcel shippers, it has become part of the normal course of business.  The only thing that changes from time to time is who will announce their Peak Season Surcharges first.

What is critical for parcel shippers however, is determining how to track and more importantly control all of these surcharges, general rate increases, tier discount levels, base level discounts, as well as varying contract terms and conditions, so that costs do not get out of control.

Want more information on how to control your shipping costs, speak to one of our parcel experts today.  Call 516 822-1183.

USPS Likely to Raise Postage Rates in Jan

On the heels of implementing new Peak Season Surcharges, the US Postal Service is likely to raise postage rates again in January 2023.  Inflation is expected to hit the 2022 budget by over a billion dollars, U.S. Postmaster General DeJoy told USPS Governors at their August 9 meeting.

The USPS announced last year it would raise postage prices twice a year beginning in 2023.

“As everyone knows, inflation has hit the nation hard, and the Postal Service has not avoided its impact,” DeJoy said. “We expect inflation to exceed our expectations by well over a billion dollars against our planned 2022 budget.”

“Because of this, my recommendation to the governors will be to remain on course to raise prices again in January,” he said.

The USPS reported in the third quarter inflation has impacted operating expenses. Compensation increased $198 million, or 1.6 percent, primarily due to wage increases in labor agreements tied to inflation. Highway transportation expense increased $131 million, or 10.1 percent, primarily due to higher diesel fuel costs. Other operating expense increased $373 million, or 14.9 percent, reflecting higher fuel prices for delivery vehicles and an increase in rent and utilities.

“I will soon begin to evaluate what we will be doing in 2023 as I pledge to keep the mailing community informed,” he said. “We must deal with the reality of our financial status and the impact inflation will have on our improvement strategies.”

The USPS under the direction of Mr. DeJoy is keeping a close watch on income and expenses as all businesses should be doing.  Treating the USPS like a business is certainly a change from the past.

Are you struggling to control raising shipping costs?  Reach out to our experts today to help you navigate the changes and look for ways to lower costs while increasing service.  We’re standing by.