Latest News and Updates from Varsity Logistics

COVID-19 caused an incredible shift in consumer and business purchasing that nobody could have foreseen coming. From traditional in-store buying behavior, to on-line purchasing, nothing will ever be the same.

This includes the world of shipping, and thus, the world of shipping software. What are the major issues the shipping industry in particular is facing moving forward? Let’s look at some of the highlights.

Major Shifts in the Shipping Industry

Customer Expectations
Throughout the pandemic, both B2C and B2B customer expectations dramatically changed. Consumers not only prefer, they now demand: 

• Easy on-line ordering
• Shorter order processing time
• Up-to-date, accurate communication about order status
• More (and cheaper or free!) shipping options - in fact, according to BigCommerce, 90 percent of consumers now say free freight is the #1 influencer to get them to buy*

The simple fact is, most consumers are becoming accustomed to an “Amazon style” experience.

Shipping Costs
Across the board, shipping costs and carrier surcharges are at an all-time high, with no signs of slowing down. 

ECommerce Sales

In 2019, eCommerce sales made up about 11 percent of total retail sales. By Q2 2020, that number jumped to a record-breaking 16 percent.

Carrier Capacity

The pandemic brought on a demand not seen since the 1997 UPS strike. The 2020 holiday season saw a peak that, for the first time in decades, resulted in supply exceeding demand. Volume restrictions left many high-volume shippers scrambling to find reliable alternatives to their normal UPS or FedEx shipping carriers. The result of this fallout was widespread. Costs to ship went up exponentially, and some shippers began exploring regional parcel carriers to offset costs.

Major pain points related to carrier capacity:

• Carriers added COVID-related surcharges and peak shipping fees
• Shippers started seeking last-mile delivery alternatives (USPS, DHL, or courier services)
• Guaranteed deliveries cancelled
• Lengthier estimated delivery times

How to Manage Your Shipping Costs

Auditing carrier bills is now more important than ever. Two increasingly important components of estimating shipping costs include validating shipment addresses and managing oversized shipments. Other peak surcharges by major parcel carriers might include:

• Jan 17, 2021 to July 3, 2021.
  • $3.00 additional handling per package surcharges
  • $31.45 per item Large Package Surcharge
• July 4, 2021 to October 2, 2021.
  • $3.50 additional handling per package surcharges
  • $40.00 per item Large Package Surcharge
• October 3, 2021 to January 15, 2022
  • $6.00 additional handling per package surcharges
  • $60.00 per item Large Package Surcharge
  • Over maximum limits will incur a $250.00 surcharge

How Consumer and Shipper Expectations Have Changed

The pandemic resulted in a dramatic shift in consumer behavior. They now have new expectations, such as wanting shipping rates and options that are clear, upfront and easy-to-find (both online and at point of order). They also expect as a standard:

• Shipment confirmation emails
• Detailed tracking info
• Real-time tracking capabilities
• Short delivery times
• Free or discounted shipping

How Varsity Modules Can Help Your Shipping Costs

• Address Standardization
• Rate Shopping
• Shipping
• Tracking

• Calculate or shop freight charges at order entry or on your website
  IMPACT: Reduce freight costs; increase eCommerce sale opportunities

• Compare or shop various LTL and Parcel carrier rates/services from within your ERP
  IMPACT: Reduce freight costs

• Unlimited number of parcel & LTL carriers can be added
  IMPACT: Reduce risk of carrier capacity issues risk

• Audit parcel bills in house to check for a multitude of carrier add-on surcharges
  IMPACT: Reduce freight costs

• Increase packing/shipping throughput with optional advanced work-flows like printing shipping labels at the point of packing or picking
  IMPACT: Reduce labor costs by increasing efficiency

• Automatically send shipping confirmation emails with tracking numbers
  IMPACT: Help meet customer expectations; reduce customer service calls

• Optimize shipments (containerization) – Let Varsity calculate the best way to pack the order based on minimizing oversize charges and overall freight cost
  IMPACT: Reduce freight costs

• Take advantage of deep integration within your ERP/WMS – Varsity runs inside of your present system
  IMPACT: Increase efficiency

• Allow for reporting against shipping data company wide
  IMPACT: Make informed decisions on freight policies

• Visibility to shipping information to anyone in the organization that has an iSeries/AS400 sign-on
  IMPACT: Reduce customer issue resolution time

Shipping Software ROI

• Increase shipping through-put
• Audit parcel and freight bills in-house
• Allocate accurate freight cost by order, customer, freight program, etc
• Automate international paperwork
• Rate shop & rate quote from within your ERP/WMS
• Optimize shipments
• Enable eCommerce

Image by Jackie Zhao via Unsplash.