By: Maggie M. Barnett, Esq., COO at ShipHero
It is inescapable; COVID is still continuing to wreak havoc on the lives and livelihoods of people across the globe, and there appears to be no real end in sight. While many eCommerce retailers have likely felt the pinch from a compromised supply chain, there was some hope at the beginning of the summer that shipments and material movement might get back on track to ensure a smoother Q4 2021. But it’s just not the case.
Supply Chain Strain
We’re seeing the effects of this strain on the supply chain throughout various steps in the process. At the start of the pandemic in March 2020, there was initial concern about the arrival of products due to factories and warehouses shutting down or moving to skeleton crews to maintain social distancing guidelines.
However, the strain has now spread to just about every inch of the supply chain.
- Impromptu Warehouse Shutdowns
- COVID outbreaks in countries like China, can result in impromptu manufacturing and shipping delays. With very little warning, these facilities are closing for 5 to 10 days at a time and that length of time is certainly felt further down the line. These shutdowns have affected other Asian countries, too, where the United Nations estimates that 42 percent of all global exports are sourced.
- Loading and Delivery
- Once a product is manufactured, it must be delivered to warehouses for shipping and then loaded onto cargo carriers to make its way to the U.S. There has been a decrease in the number of available cargo containers as the time to unload materials has increased. Cargo containers are loaded and unloaded with the unloaded ones being placed back into circulation. With more and more containers sitting on ships sitting in the ocean – and not a port – these containers are not available.
This situation is also exacerbated by a delivery driver shortage. While the U.S. trucking industry has said they’ve been experiencing a labor shortage for about a decade, the true extent of this labor gap has been put into stark relief as products remain sitting on a dock or warehouse, instead of traveling where they need to go.
- Shipping Times/Speeds
- All of those obstacles lead to longer shipping times and slow shipping speeds. Which is exactly what consumers don’t want. Some larger brands like Walmart and Target are chartering private cargo carriers for shipment and delivery, but this is not an option available to many eCommerce retailers.
- Increased Pricing
- Supply and demand is in full effect, meaning that as some products and component parts become harder to source, those products might see an increase in price. This was experienced at the start of the pandemic with toilet paper and during last spring with the shortage of building materials like wood. Additionally, issues like the semiconductor chip shortage have had a far-reaching impact on industries like automotive, healthcare and consumer tech.
Awareness of the Shortage Grows
As you’ve probably already experienced, the message of supply chain breakdowns and product scarcity are huge topics in global, national and local media. This trend will more than likely continue as we creep closer and closer to Christmas, when the sight of empty store shelves on the news can send consumers into a frenzy.
It’s important for eCommerce retailers to understand that while there is an increased awareness regarding shortages and the reason for them, there is still little in the way of consumer patience for delayed deliveries. While it is logical to understand that supply chain shortages will be a persistent issue throughout 2022 and 2023, when a consumer orders something, they want it NOW. This is the Amazon-effect in all its glory, but it is also a fact of 2021 holiday supply issues.
How to Make It Better
Unfortunately, with the supply chain compromised, a lot of the control has been taken from eCommerce’s hands. However, you can look at working closely with your suppliers as you start to review inventory for the holidays.
It is said that 80 percent of revenue comes from about 20 percent of skus. If this is true for you, stock up on the items that you know sell – don’t try and grab a little bit of everything this holiday season. Instead, analyze previous sales and focus your efforts on acquiring the products you know will move.
Another idea is to clearly communicate your shipping deadlines with clients. Do the math; if your cut off date to receive orders for Christmas delivery is Wednesday, December 15th at 8am EST, state that specifically on your website, across your social channels and in your app. You want to be sure that there are no misunderstandings amongst you and your customers when the delivery of a long-wanted Christmas gift is on the line.
The outlook for the supply chain is not the best. There is very little doubt that we will still be feeling the effects in 2022 and 2023. However, in your corner of the world you can take steps to overcome materials shortages, chip shortages and the like by focusing on the things you can control when it comes to your inventory.
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, no minimums, 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.
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Maggie M. Barnett, Esq., COO
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.