It’s no secret that the shipping industry has seen significant changes in the last few years. Retailers have had to adjust their operations due to port delays, labor shortages, and inflation. As we move into 2023, there are several key trends that retailers should be aware of. From load balancing to sustainable packaging and fast order fulfillment, here are seven shipping trends to watch out for in the new year.
1. In 2023, Supply Chain Concerns Will Persist
Anyone who’s tried to order a simple item online lately knows that supply chains are majorly screwy right now. Thanks to a global pandemic, war conflict, and port delays, shipping and manufacturing delays have become the norm rather than the exception.
In February 2022, only about 34% of container vessels arrived at their destination with no delay. And according to our research, 39% of brands say shipping and manufacturing delays and shipping costs will continue to be a top supply-chain-related challenge over the next 12 months.
Fortunately, most retailers acknowledge it will take time to unravel the challenges associated with shipping delays and the supply chain. In the meantime, there are some things consumers can do to ease the burden.
2. More Efficient Shipping with Load Balancing
No retailer wants to be known as a company with terrible shipping. Customers expect efficient shipping; anything less can damage a company’s reputation. Shipping is one of the most significant expenses for a retailer. So, this is where load balancing has come in.
Load balancing is a popular method of reducing shipping and warehouse costs by distributing shipments evenly across multiple carriers. Getting products closer to your customer through distribution centers helps to avoid service disruptions and delays. Studies have shown that load balancing can save up to 25% on shipping costs. In addition, load balancing can reduce your total costs by up to 13%.
While load balancing has many benefits, it is not without its challenges. It takes coordination and a good warehouse management software system to work efficiently. However, the savings are definitely worth the effort. Load balancing has only gained popularity in recent years, but it is expected to grow even more as retailers realize the benefits.
3. Agile Supply Chains
Agile supply chains are designed to be highly flexible and responsive, so businesses can quickly make changes as needed. Shifting from ‘just-in-time’ to a more stable ‘just-in-case’ model allows brands to respond to more supply chain setbacks.
While it may be impossible to insulate one’s company from another global pandemic, operating with more robust inventory levels may help companies to overcome supply chain obstacles and maintain the integrity of fulfillment channels. In other words, the days of “set it and forget it” shipping are long gone.
Businesses need to be prepared for anything and everything, which means having a supply chain that can quickly adapt as needed. Recently, I discussed this same challenge with Shopify and other leaders in fulfillment; you can find the full article here.
4. The Future of eCommerce is Green
As the world becomes more conscious of the need to protect the environment, sustainable packaging is set to become one of the most critical industry trends.
Order fulfillment companies are already beginning to place a greater emphasis on sustainability, with 46% of customers indicating that they are more likely to purchase a product online if they recycle the packaging.
In addition to meeting customer demand, this shift will also help reduce eCommerce emissions, which currently account for six times as much pollution as products purchased in-store.
Placing their sustainable shipping and returns values at the forefront of their offering makes it easier for customers to buy in. Sustainable packaging isn’t just good for the environment – it’s good for business too.
5. Keep Customers Happy with Transparent Shipping
Customers today expect more than just fast delivery times; they also expect accurate delivery times. That’s why delivery time accuracy and transparency are becoming increasingly important for businesses of all sizes.
Customers expect brands to be upfront about delivery times with today’s supply chain disruptions and ever-changing shipping costs. After all, no one likes getting their hopes up for a package that ends up being late.
But it’s not just about meeting delivery expectations—it’s also about setting realistic ones in the first place. Brands that overpromise and underdeliver risk damaging customer relationships beyond repair. Research shows that 32% of customers have abandoned a cart because “the estimated shipping time was too long” and 22% because “there was no guaranteed delivery date.”
Looking ahead to 2023, developing transparency and trust around shipping will be critical to building long-term customer relationships—relationships strong enough to weather any industry challenges that come your way.
6. Shipping Cost Relief is in Sight
We all know how important shipping is to eCommerce. And, after a rocky few years, 2023 is shaping up to be a good year for shipping. Thanks to continued innovation in logistics and transportation, we can expect cheaper shipping costs and less port congestion.
While there may still be some disruptions in the supply chain, retailers are finally starting to feel some relief. According to the Freightos Baltic Index, in Q4, the global average cost of shipping a container is $3,429, compared to a whopping $10,396 in October 2021. Lower container costs and fewer backlogs should help retail brands keep shipping rates lower for consumers. So far, so good!
7. 3PLs: Make eCommerce Shipping Easy
As eCommerce businesses continue to grow and expand, many find they need more help than they can handle. This is where third-party logistics providers (3PLs) come in. 3PLs specialize in managing all aspects of the shipping process for their clients, from warehousing and fulfillment to transportation and tracking. By partnering with a 3PL, you can free up valuable time and resources so that you can focus on what you do best.
With pre-negotiated contracts and a network of fulfillment centers spread across the country and worldwide, a 3PL can offload the time and stress of managing shipping logistics in-house while keeping costs down. As e-commerce continues to grow, we can expect even more innovation from 3PLs as they strive to provide the best possible service to their clients.
Order Fulfillment Solution for the Modern Retailer
If you’re feeling overwhelmed by the logistics of shipping in 2023, never fear! ShipHero is here to help. We’ve outlined the seven most important shipping trends for retailers this year, and we’ll continue to monitor these trends as they evolve.
Plus, ShipHero offers an end-to-end, full-service fulfillment solution that leverages the reach of our seven owned and operated warehouses (strategically placed across the country and Canada). So, if you’re looking for a way to outsource your supply chain and shipping needs, consider partnering with a 3PL like ShipHero. Let us take care of the fulfillment so you can focus on what you do best – selling products!
Maggie M. Barnett, Esq. COO of 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 ability to provide guidance and mitigate 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.
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