Nov 26, 2021 | 3PL Warehouse Management, Blog, Fulfillment
The pandemic has added words to our vernacular that many people had never heard before. Terms like supply chain, freight forwarding, 3PL, last mile and fulfillment are now much more familiar to the everyday consumer than they’ve ever been. However, as often happens with industry-specific verbiage, that doesn’t always mean the definition or understanding of these terms is widespread.
eCommerce shipping is a current hot button issue, forcing many people to spend more time thinking about how the products they buy actually make it from a factory in China to a shipping container to a US port to a warehouse to their front door. While this is part of the supply chain, two very specific types of businesses are more involved than ever – 3PLs and freight forwarders – and it can be hard to keep them straight … even for those who work in the industry.
Below is a breakdown of the differences between third party logistics (3PL) companies and freight forwarders, as well as an understanding of when a company might choose one type over the other.
Freight Forwarding Defined
A freight forwarder is typically a company that manages moving products from one place to another. They typically are a non-asset company that doesn’t manage trucks or drivers or any port workers – they manage the details of where a shipment is, where it can get loaded onto a ship, plane or truck, and how it will get transported to a warehouse for fulfillment and distribution.
The major benefit of a freight forwarder is that they can negotiate better rates with shipping companies due to the volume of product they’re moving. By working directly with carriers, freight forwarders can broker better rates than eCommerce companies often can on their own.
They can also work to coordinate shipments that might need multiple types of transportation throughout the journey, such as land to sea to land to air.
Freight forwarders also have a deep understanding of customs,imports and exports. These are the areas of shipping that typically have the most red tape and can easily trip up a newer or smaller eCommerce organization that doesn’t have previous experience with these issues or simply doesn’t have the bandwidth to manage these details.
Freight forwarders are also very familiar with every type of possible transportation, including sea, air and ground. Due to the breadth of their client base, they need to have a solid understanding of how to move any product for any company from anywhere in the world.
Third Party Logistics (3PL) Company Defined
A 3PL is an organization that can manage a few different processes. While a freight forwarder is strictly responsible for forwarding freight, a 3PL might be in charge of one, two or all of the following:
Services could include: LTL (less than truckload), FTL (full truck load) services, rail, air, ocean and/or trans-modal
- Warehousing & Fulfillment
Services could include: receiving, inventory management, returns, eCommerce fulfillment, B2B fulfillment, inspection, and/or kitting
A freight forwarder can be considered a 3PL, too. Sometimes a freight forwarder also operates their own warehouses, but often still work with fulfillment centers like ShipHero to manage the B2C shipments
Yes, you read that right, it is possible for a freight forwarder to be considered a 3PL. In the end, it depends on how much of the logistics process they own – if a freight forwarder manages their own warehouse then there’s a good chance that they offer warehouse management services like pick, pack and fulfillment. This puts them more at the level of a 3PL, than just a freight forwarder.
The true value of a 3PL lies in their warehouse and fulfillment capabilities. They are equipped to handle eCommerce fulfillment duties from receiving to DTC to returns to storage. By outsourcing these tasks to a third party logistics company, eCommerce retailers are free from the worry of warehouse leases, employees, hiring and dozens of everyday tasks that are necessary to run a business that don’t impact the bottom line.
How to Choose Between a Freight Forwarder & a 3PL
The biggest question for most eCommerce retailers is how to choose between a freight forwarder and a 3PL. In general, there are a few scenarios that lend themselves more to one than the other. Here are a handful of situations to look for when choosing.
- You are only concerned with getting your inventory from one location to another.Maybe you’ve recently secured product that’s stuck somewhere in Canada and you need it in Michigan. In this instance, using a freight forwarder would be the perfect choice. Best option: Freight Forwarder
- You need to get your inventory shipped from China, into a warehouse and then shipped to consumers. This is a pretty perfect situation for a 3PL. They have the processes in place to manage shipping carriers, receive and putaway your inventory and pick, pack and ship your orders. Best option: 3PL
- You’ve acquired some inventory but it’s not enough to justify the cost of an entire shipping container. Freight forwarders can save money by combining different clients’ orders into one container. Since they have access to a variety of inventory locations and clients’ different needs, it should take them no time at all to organize the shipment and get it where you need it – normally for less than you expected. Best option: Freight Forwarder
- You’ve increased advertising for your product on the West Coast and now have a lot of orders pouring in from Washington State. Your current warehouse is in Maine – so this is creating a problem. Working with a 3PL will alleviate this issue in no time. Depending on size, most 3PLs have more than one warehouse and work to maximize your inventory distribution to keep shipping costs and times down. Best option: 3PL
Choosing between a freight forwarder and a 3PL is really about the long-term. If you are looking to forge a relationship with a logistics company that will act as a partner, and manage your fulfillment process from start to finish, you’re really looking for a 3PL. If you’re looking for a more transactional relationship that you may only use once or twice a year, then a freight forwarder will work.
As we continue to move through 2021 and into 2022 there is no doubt that the shipping game will continue to evolve. The more you know about your options, the better choices you’ll make.
If you’re new to ShipHero Fulfillment, please schedule a meeting today with our experts to learn more about how we can help you get your orders picked, packed and delivered with our fulfillment service. No setup fees, simply pay as you go. ShipHero works to ensure that organizations invest in the solutions that match their needs, to improve productivity, revenue, and success.
Click HERE to Schedule a Meeting Today
Nov 19, 2021 | Best Practices, Blog, Fulfillment, Warehouse Management Software
By: Maggie M. Barnett, Esq., COO at ShipHero
The COVID-19 pandemic brought brick and mortar business operations to an abrupt halt, rapidly increasing the burden on eCommerce fulfillment. Unfortunately, as online shopping orders skyrocketed, so did package thefts in the United States.
As a business owner, stolen and damaged goods can affect your bottom line significantly. Damaged good claims generally translate to returns or refunds, which could mean lost revenue.
However, in both package damage and theft, accountability matters a great deal. Is your own fulfillment staff stealing inventory? Is your carrier responsible for the damaged goods? Did your customer leave the order vulnerable on their front porch for too long? Does a police report have to be filed?
Liability determines who takes the fall, so it’s important to take every precautionary measure in your capacity as a business owner. But first, you need to identify why your packages are being damaged or stolen so that you can come up with a relevant solution.
Why Do Packages Get Damaged or Stolen?
Porch pirates stealing local boxes off your customers’ doorsteps wasn’t uncommon during the global pandemic. But are your warehouses suffering from inventory theft? And what factors are damaging your delivered goods?
Here are some reasons that might be to blame:
No use of cushioning materials
Until teleportation becomes an option, delivering items invites risks and potential damages. However, you can reduce the odds of goods being damaged from shock, vibrations, or external force by using cushioning materials.
Cushioning materials form a protective layer that absorbs impact; pillows, bubble packs, and styrofoam sheets are popular choices. When deciding which material to use, consider the type of product you’re shipping.
Is it a large item or a small one? Do you need a more resilient, shock-absorbent material? You might also need to consider temperature-sensitive packaging for certain goods.
Packages are too big
Using oversized packages leaves room for the goods inside to move around during the delivery process. Consequently, they might get damaged from impact against the box’s walls or by falling on top of one another. This is why you need to use packages with the right dimensions for secure delivery.
Larger packages also require more cushioning material/padding, which increases your costs. If you reduce the padding, the goods are more likely to get damaged, inviting damage claims and order return/refund costs.
Thus, avoid using packages with the wrong dimensions to improve your customers’ experience and reduce costs.
Improper handling
Your package moves through several hands in the fulfillment process before reaching the delivery people. Every person handling the package poses a risk of damage or even theft. You can wrap your parcel in red tape labeled ‘Fragile material,’ and there is no guarantee that you’d receive it undamaged.
With the mass increase in shipping, mishandling is inevitable to some extent. However, the shipping company you use also plays a massive role in secure delivery. Some companies directly deliver the package to the recipient, while others leave it on the front porch.
Theft
A survey found that 1 in every 5 Americans fell victim to porch piracy during the early pandemic days. Package theft statistics also reported spikes in theft during the holiday season.
Holiday package theft can cost you heavily in returns and refunds if you’re held liable, so it’s vital to take safety precautions beforehand.
Unfortunately, efforts like a neighborhood watch, security systems, home security cameras and doorbell cameras do little to protect customers against package thieves. If customers feel your delivery process is at fault, they might hold you liable for the lost package.
However, since most package theft cases occur after the product is delivered to the doorstep, you typically won’t be held liable. If in-transit theft or damages occur (although they’re quite rare), you’ll need to take care of the replacement or offer a refund.
You can schedule package retrieval or leave the parcel in package lockers (instead of at the doorstep), Amazon Key, or Amazon lockers to reduce the risk of package theft and your brand’s liability. And make use of email or SMS delivery alerts to notify the resident that their package has been delivered.
Infestation
While the chances of package infestation are low, you shouldn’t completely rule out the possibility. Infestations are easily transmitted, and if your packages come into contact with them, they’ll happily set up camp.
International packages are at a greater risk of infestation because of crowded conditions on freight ships. So when you’re shipping internationally, exercise caution to prevent rodent and insect infestations. If you’re delivering consumables, the packages should be leak-free for protection.
Water damage
Fluctuating weather conditions are a nightmare for logistics companies. They slow your deliveries down and increase the risk of package damage. If it’s pouring down rain, delivery personnel have to be extra careful to protect packages from water damage.
Unfortunately, weather conditions aren’t the only cause of water damage. When packages are shipped via sea, the air and cargo’s moisture can seep in and cause packages to peel away somewhat.
How to Prevent Shipping Damage
It’s impossible to prevent shipping damages entirely, but there are tried-and-tested strategies to mitigate it.
Use the right packaging
Avoid oversized packaging like the plague – they’ll damage your goods and drive your costs up in the long run.
Beyond the package size, you also need to account for factors like the material itself and what padding you use. Natural fiber packaging is generally preferred for foods and consumables, but it’s expensive. Carriers generally use more budget-friendly packaging like food-grade cardboard or plastic for delivering items.
Don’t leave empty space in packages
You won’t always have the right-sized packages on hand, especially when you have large orders to fill. You might need to use larger containers at times like this, but you can mitigate potential damage by filling empty spaces with dunnage.
Kraft paper is the most economical choice for dunnage, and it’s eco-friendly too. Foam is generally used for electronics and sensitive items like medical equipment, and air pillows are used to protect goods from slipping out of place.
If you don’t use dunnage or padding, your product will move around, knocking against the walls of the container. The goods are also more susceptible to impact damage.
Wrap each product in protective material
When shipping fragile products or goods that are prone to leakage, you need to wrap them in protective material. The protective material you use depends on the items.
Bubble wrap is a top choice for fragile items like glass while packing paper or plastic covering works for more durable items.
Review data on shipping damages to see where improvements can be made
Reviewing previous shipping damages helps identify problem areas and improve your order fulfillment process. According to a HuffPost report, 1 in every ten eCommerce packages arrives damaged.
The damage may be caused in transit, in which case the shipment company is to blame. By studying past situations, you can better understand where the problems occur and why they keep repeating.
Online retailers need to review any holiday package theft to avoid refunds on lost packages.
Use shock/impact indicators
Impact indicators monitor any shock or damage the package endures, calculate it and report it back. It also alerts handlers in real-time to be cautious. Indicators aren’t expensive and they can protect your packages from costlier damage, making them promising long-term investments.
They also give you peace of mind, as you’ve taken the necessary shipping precautions from your side. The rest is up to the carrier.
Can I Hold a Carrier Liable for Shipping Damage?
You can hold a carrier liable for shipping damage if you can prove that the parcel was in good condition before it was handed over to the courier. Carriers like FedEx, USPS, UPS and others all have policies in place that can help you determine if the damage was caused by them.
After the package is passed to the carrier (in good condition), if any damages or delays occur, or if the package doesn’t arrive, you can hold them liable.
How ShipHero Reduces Shipping Damage
ShipHero Fulfillment helps brands and 3PLs reduce shipping damages to cut back on losses and improve their customers’ experience.
Fully-trained & professional fulfillment staff
ShipHero’s dedicated teams of fulfillment experts pick, pack and ship your orders with care.
We use the right packaging for each order
We don’t use boxes that are too big, and our fulfillment team is trained to use the best cushioning and dunnage for each item.
Insurance claims for shipments
ShipHero Fulfillment offers shipper’s insurance that covers both damaged and missing goods at a declared coverage rate of $1 per $100.
Conclusion
Package damages and theft result in losses and affect your bottom line, so it’s crucial to take thorough, protective measures. If your customers receive damaged goods or have them stolen, it’s important to identify the cause.
Sometimes, your company won’t be liable, and if it is, identifying the cause saves you from repeating the problem. If you need help guaranteeing reliable, secure delivery, then reduce your shipping damages with ShipHero. We’re already helping Fortune 500s and thousands of fast-growing DTC brands deliver orders safely.
If you’re new to ShipHero Fulfillment, please schedule a meeting today with our experts to learn more about how we can help you get your orders picked, packed and delivered with our fulfillment service. No setup fees, simply pay as you go. ShipHero works to ensure that organizations invest in the solutions that match their needs, to improve productivity, revenue, and success.
Click HERE to Schedule a Meeting Today
Maggie M. Barnett, Esq., COO
ShipHero
About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.
Follow Maggie on Twitter & LinkedIn.
Nov 19, 2021 | newsroom
ShipHero is proud to announce the direct integration of Klaviyo with our post-shipment tracking feature, PostHero. PostHero already provides ShipHero’s fulfillment clients with the ability to track their shipments through to final delivery. Now, with the introduction of Klaviyo workflows, ShipHero clients can provide visibility to their customers, triggering email and text notifications as a package moves through the shipment process.
This type of direct integration will further help to raise the profile of ShipHero Fulfillment clients by offering them the same transparency of their bigger rivals. It is also a huge benefit to customer satisfaction as the guesswork of where a package might be can now be eliminated.
More Power with PostHero
PostHero already tracks packages across carriers and provides insight by giving you the tools you need to truly understand your fulfillment process, even after the package has left the fulfillment warehouse.
The Klaviyo integration brings all the power of Klaviyo’s workflows to ShipHero Fulfillment. These workflows are powerful! Tracking certain triggers within ShipHero enables Klaviyo workflows. These customizable workflows put the power of customer satisfaction in the hands of ShipHero’s Fulfillment clients.
Here’s how it works:
- ShipHero has set up four key triggers within the Klaviyo integration.
- Each of these triggers can also be associated with a Klaviyo workflow.
- ShipHero clients can then customize these workflows to reach out to clients based on the status of their package.
Current event triggers are:
- 1st Scan – This indicates that the package has left the ShipHero warehouse and is now in the hands of the carrier.
- Delivery Success – This indicates that the package has been successfully delivered to its final destination. It should now be in the hands of the customer.
- Return to Sender – This indicates that the package is being sent back to its origination point (in this case the ShipHero warehouse because of an issue with the address, etc.).
- Failed to Deliver – This indicates that the package made it to its final destination but actual delivery was not possible.
In each instance above, the workflow can be set-up to address each of these triggers. For example, when the package leaves the warehouse, a ShipHero Fulfillment Client might want to send an email to their customer letting them know it’s on the way. They can also include shipment information, like a tracking number.
Once delivery success has been triggered, the client might want to send a follow-up email thanking the customer for their purchase and prompting them to leave a review. Or maybe sending a coupon code for a % off their next purchase as a thank you.
All of these emails can be automated within Klaviyo’s workflows, giving ShipHero Fulfillment clients true control over their customers’ post-purchase/post-delivery experience. Klaviyo workflows can be accessed via ShipHero’s Fulfillment dashboard.
More Visibility for Increased Success
“We know how important the post-shipment experience is for customers,” Aaron Rubin, ShipHero’s Founder & CEO said. “As an eCommerce consumer myself, I want to know where my stuff is. With a direct Klaviyo integration, we’re so glad we can give that kind of visibility to our clients.”
Currently, the Klaviyo integration with PostHero is available for ShipHero’s Fulfillment clients. For further details regarding the Klaviyo integration and how it can positively impact your fulfillment business, current ShipHero clients should reach out to Client Support.
About ShipHero
ShipHero is a US based, leading provider of cloud-based eCommerce fulfillment solutions that gives online retailers and third-party logistics providers the tools to ship more efficiently anywhere in the world. With more than 5,000 customers located around the globe, ShipHero offers online retailers a suite of services ranging from warehouse management software to outsourced fulfillment as a service. Some notable customers include Mars, Universal Music Group and Canadian Tire. Additionally, ShipHero is the official fulfillment network partner for Shopify, and is rapidly scaling a network of warehouses throughout the US to meet the growing demands of today’s online retailers.
