The disruptive events of 2020 have had a profound impact on many aspects of the supply chain, including parcel shipping. And much of what happened last year will continue to impact the way the industry will evolve through 2021. With this in mind, Ken Fleming, president and chief sales officer at Logistyx Technologies, looks at five predictions for parcel shipping trends over the course of this year and beyond.
1. The combination of 3D printing and parcel shipping will see an upsurge in interest
The 3D printing process – also known as additive manufacturing – came to the forefront of public consciousness in 2020, as small businesses, schools and even individuals used their 3D printers to manufacture face masks and other personal protective equipment (PPE) to alleviate the global shortages for frontline workers during the pandemic. In 2021, expect to see manufacturers re-evaluating the ways they service their customers, taking advantage of the combination of 3D printing and sophisticated parcel shipping to optimize their aftermarket operations.
The beauty of 3D printing is that it enables companies to build a replacement part the moment a customer demands it. By printing spare parts only when and where they’re needed, it’s possible for manufacturers to significantly reduce inventory and production costs. And by using parcel shipping to deliver parts direct to customers, rather than going through intermediaries, it’s easier to ensure the right parts are used for repairs, and maintain closer, more interactive direct relationships with their customers and partners.
2. External data feeds will help optimize the delivery performance
With e-commerce fulfillment becoming even more important, we’re likely to see increased use of data analytics and machine learning to optimize delivery performance. One exciting trend is the potential for using external data feeds to augment business intelligence (BI) data within transportation management systems (TMS), which many retailers use to track and provide analytics on the delivery performance of parcel carriers.
It’s possible to incorporate weather and traffic data feeds into TMS systems to provide early notification (and with use of AI to predict the likely impact) of major weather events and road traffic incidents. There is even experimentation under way to see if analyzing unusual social media activity in a location might point to an exceptional disruptive event (a protest march or accident, for example) that could impact parcel deliveries.
3. The spotlight will fall on reverse logistics
With e-commerce on the increase, retailers will be forced to put an even bigger focus on reverse logistics strategies. In fashion and home furnishings, for instance, people are increasingly ordering a selection of items with the expectation that they will return items they don’t like or that don’t fit. How can parcel shippers manage returns costs and make returns quick, easy and hassle-free for customers?
Companies are trying to limit returns costs by implementing a strategy that relies on a pool of different carriers, rather than just one. This lets them optimize costs by selecting the most cost-effective carrier partner for each returned product and pickup location. Attention to small details can make things easy for the customer – like using dual-use labels that serve the purpose of both the outbound shipment and return; or peel-off labels where the customer can easily peel off the outbound label to expose a return label.
4. The drive for sustainability won’t go away
Covid-19 has not dampened consumers’ desire to save the planet. While they are shopping more online, they want to see sustainability baked in. They question the need for so much packaging – and are keen to see more sustainable delivery options. Even Amazon, the world’s biggest online retailer, is facing criticism for its overuse of packaging. And where Amazon goes, others will have to follow.
Reducing packaging depends on two factors: the material used and the amount of ‘air’ in the shipment. Clear progress is evident in both areas. Plastic packaging and filling materials are increasingly being replaced with recyclable alternatives. Package sizes are also decreasing as these days, carriers are charging based on the size of consignments. Hopefully, those notorious examples of small packages in giant boxes will become increasingly rare.
5. Shippers will use a wider mix of different types of carrier
In 2020, for the first time, parcel shippers learned that FedEx, UPS, DHL, etc. can reach capacity and turn away their business. Those companies that already had multiple carriers in place, including a mix of local and regional carriers, fared better.
Going through 2021, shippers will be looking to build out their carrier networks to prevent any future hiccups. And as retailers increasingly ship orders from stores rather than from central distribution centers, there will also be growth in motorcycle and bicycle couriers picking up parcels from stores for delivery to local customers.
Using multiple delivery partners builds resilience into parcel delivery operations. It also provides a way to optimize costs, for example, by using software to rate shop, so shippers automatically select the right courier or carrier for each parcel, taking account of size, weight, delivery route and location.
The pivot to e-commerce in the pandemic has dramatically increased the role of parcel shipping in people’s lives. These predictions are just some of the important ways it will likely evolve and improve.