Tag Archives: same day delivery

Same-Day Delivery: 3 Logistics Questions Shippers Need to Answer

Who is the Same-Day Delivery Consumer?

Consumer expectations are growing. Why? Since companies have tested the same-day delivery option, consumers expect it as the standard. Coldwell Banker says about 53% of US customers are more likely to make an online purchase if they are offered same-day delivery. 

According to a 2016 Deloitte survey, millennial shoppers are willing to pay an average of $5.50 per order to get same-day service, compared with $3.80 for all others. Business Insider defines the same-day delivery demographic as a millennial, urban male. 98% of millennials consider same-day delivery to be fast shipping, but the response rate drops to 88% when it comes to two-day delivery.

By 2045, freight volume will increase by 45%. This puts a lot of pressure on carriers, drivers, logistics professionals, warehouse management, and technology to move goods to the right place and quickly. A Forbes article said FedEx confirmed most of the company’s nearly $5B in increased capital is going to the ground division, driven by the demand of e-commerce customers.

Read: Logistics Challenges of Same-Day Delivery

Is Amazon a 3PL and What Can I Learn from Prime?

Amazon created services and offers that consumers didn’t even know they wanted – and now, they’re the expectation. Amazon offers free same-day delivery on some items to Prime members and also provides one-hour delivery for $7.99 on thousands of products in 29 US cities. 1 in 6 Americans, about 50 million, are Amazon Prime members. Amazon does not release its Prime membership numbers, so independent research was done by Cowen & Co., says SupplyChainBrain. Their latest research found that membership had risen by 23% YoY.

Amazon has definitely disrupted the logistics industry, and many 3PLs consider the company a competitor. 20 out of 25 CEOs surveyed by Supply Chain Quarterly think that Amazon has had a significant effect on supply chain management; mostly because of Amazon’s role in high-speed delivery programs. Respondents noted that Amazon’s delivery programs have impacted traditional logistics processes since their quick fulfillment and delivery process reduce the need for expedited transportation.

FreeShipping.jpgAccording to Business Insider, 4 in 10 US shoppers say they would use same-day delivery if they didn’t have time to go to the store, and 1 in 4 shoppers said they would consider abandoning their online cart if same-day delivery wasn’t an option. PetSmart, Bloomingdales, Deliv, Foot Locker, Instacart, and The Container Store have added their names to the long list of companies now providing same-day delivery to select consumers.

Why Don’t More Companies Add Same-Day Service?

Recent surveys show more companies in all verticals are migrating to the internet and channel boundaries are blurred. Only 9% of North American retailers offer same-day delivery and feel it is working well, while 13% who offer same-day delivery thinks the program needs to be improved. For online
businesses, same-day delivery makes sense and over 50% plan on providing same-day delivery services in the next 3-5 years, according to Bringg.

Logistically, same-day delivery isn’t a current reality for many organizations. But, technology is changing that. With 61% of consumers willing to pay more for same-day delivery, companies can no longer avoid the challenge. But, even with all the customer demand (and satisfaction) with companies offering same-day delivery, almost half (49%) of retailers have no plans to offer same-day delivery soon. Most organizations haven’t set up the supply chain to efficiently meet customer demand – DCs aren’t located in the most optimal locations for at home, same-day delivery promises. Supply chains have traditionally been optimized to feed merchandise into specific brick-and-mortar locations without crossing any channels. So, the first step to getting faster delivery options are to build up warehouse management systems and create an efficient and effective fulfillment and supply chain process.

What to Read Next: What Your Inventory Reveals about Your Reverse Logistics

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5 Tips for Small Businesses to Ship On-Time, Every-Time

Delivering products on time is crucial in any industry. With businesses and consumers alike, this final touchpoint in the supply chain represents your ability to fulfill their needs competently. It is especially important for small businesses to deliver products on-time, as a poor reputation can be detrimental to the bottom-line. 

Whether you are shipping to consumers or businesses, delayed shipments should be taken seriously. Late deliveries slow down the entire supply chain and hurt customer relationships, which can have serious consequences for your bottom line: 70% of consumers may not shop with a retailer again after receiving a late shipment, and 86% of consumers say their expectation for on-time delivery increases in peak seasons like the holiday shopping season.

A transportation management system (TMS) is a great tool for small businesses to improve shipping performance. TMS software helps you find the lowest linehaul rates on the market, choosing from a network of carriers pre-qualified for safety and service. Freight billing and audit is automated, and all data is collected in one system, enabling freight reports for visibility into your transportation processes.

A TMS provides the foundation for freight optimization. It gives you the visibility to discover flaws in your distribution network. If you couldn’t see what’s wrong with your transportation, how would you fix it?

To ship on-time, every-time, follow these 5 tips:

Analyze Performance Data for Supply Chain Partners

Are some of your inbound materials consistently delivered late or damaged? Are you delivering late to one of your customers more often than the others? Sometimes, suppliers, customers, and freight carriers cause late deliveries. With the visibility you gain from a TMS, you can pinpoint which partners in your supply chain are causing trouble and work with them to fix it.

Assess Dwell Time at Your Facility

The way you ship items may be slowing down the transportation process and causing late deliveries. Dwell time, or how long a driver has to wait at your facility or location, is very important. If dwell time is too long, it may force the driver, due to hours of service rules, to take an extra day to arrive at the destination. Long dwell time will decrease a driver’s willingness to haul your freight, leaving you to work with carriers that have a bad history of truck and driver out of service rates.

Create Visibility into Freight Movement

Although LTL shipping is convenient and fast, you are particularly susceptible to delays. LTL trailers are filled with multiple loads from different companies, so the route is longer, and more freight handling is required, which leads to a higher chance for  damage.,  When you ship LTL, avoid delays and damage by ensuring there is a track and trace feature available, so you can keep an eye on your freight.

Lean on 3PL Expertise

3PLs have proprietary technology and a large carrier capacity to put to work for you. This enables visibility into transportation and some of the lowest linehaul rates on the market. These carriers are pre-qualified for safety and security, so you’ll experience less frequent disruptions. A 3PLs expertise will help you increase shipment speed, reliability and reduce costs. A 3PL will take care of transporting your goods while you focus on core competencies.

Additional tip: always inform customers of late delivery. While warning customers of an anticipated disruption won’t stop the shipment being delayed, it can mitigate the negative impact on reputation and perceived service. Having track and trace features from a TMS will enable you to warn customers of late delivery. When your customers are made aware of a delay in shipping, they can make plans to notify their customers and/or prepare to receive the shipment at a different date, reducing the inefficiencies on their end.

There are many practical TMS solutions for small businesses – especially TMS software hosted on the cloud, where you only pay for what you use. Typically, the cost savings from lower linehaul rates and better routing offsets the cost of using a TMS. TMS software allows small businesses to spend less time on transportation and more time on core competencies.

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