By Robert Lerose
With the holiday season quickly approaching, many businesses are in the midst of their busiest time of the year. While brick-and-mortar stores still account for a large part of consumer activity, the steady rise in ecommerce shopping is undeniable. According to Forrester, the research and advisory firm, online purchases are projected to make up 12.7 percent of all U.S. retail sales in 2017. To meet this demand in a timely way, businesses need to have adequate fulfillment and shipping strategies in place now.
“We’ve been talking to our clients for weeks about the holidays and the key word is plan, plan, plan,” says Maria Haggerty, CEO of Dotcom Distribution, an Edison, New Jersey-based ecommerce logistics and fulfillment company. “We ask them: do you have a plan for what you’re going to sell and what your marketing is going to be for that? What’s your forecast? How much of that forecast can you break down as granularly as possible? Do you have your inventory to back it up?”
Companies should look at how they sell things, where their strongest sales are, and plan accordingly. For example, one of Haggerty’s clients sells lingerie sets. They’ve set up their warehouse so that the most popular items in a set are put close together to maximize efficiency when it comes to packing and fulfillment.
In choosing a shipping carrier, businesses need to consider a few things: Where is the shipment going? When does it need to arrive? What is the weight and the dimensions of the package? Equally important is to know a carrier’s cut-off date—the last day to ship a package in order to have it arrive by a designated time, such as before Christmas—which can differ by carrier.
Shipping rates are determined by many factors, including the weight and the dimension of the package. For example, Haggerty says, it’s cheaper to ship a pound of rocks than a pound of feathers because the rocks are in a condensed box, but the feathers will require a larger container, which drives up the cost. Businesses may want to consider using a fulfillment partner “because we’re all negotiating the best rates with the carriers and getting that factor down,” she says.
Navigating overseas shipping
Businesses that ship high volume orders need to shop around to find a carrier with the best rates. “UPS or FedEx will do, but you’ll be charged a lot for it because their core business is the small package,” says John Kelemen, vice president of national accounts east/special services for Pilot Freight, a freight forwarder with locations near Kennedy Airport and upstate. “Sometimes it makes sense to run a point-to-point truck rather than pay a per pound rate.”
Kelemen says that businesses should invest in the proper packaging for their products to protect the contents and ensure that it arrives intact to the customer or distribution center. The retailer should also tell the customer to report any packaging that is damaged. “If they do that, it holds the transportation company liable for concealed damage. If they don’t do that, freight claims are often denied if there is damage to the product,” Kelemen says.
International shipping involves a set of protocols that can get very complicated for businesses that have never done it before. Kelemen says that businesses should familiarize themselves with the International Commerce Terms or Incoterms, which spells out the responsibilities of all parties, such as who pays for what. Small businesses that don’t import or export huge amounts of product typically go through a third party broker like Pilot, which has offices overseas and can negotiate favorable terms.
The holiday season puts extra pressure on businesses that have not planned their international shipping far enough in advance, whether they export or import.
“We’re getting into or are at the tail end of the peak season as far as the Christmas rush,” says Michael Meierkort, the president of international freight and transportation solutions at Livingston International, with offices on Long Island and in the Buffalo area. “If you’re just thinking about getting into importing from Asia in the last 30 days or so, be aware of seasonality factors: costs are going to go up this time of year and space is at a premium.”
For example, Meierkort says, to import something from China to the New York area would take about 25 to 30 days, plus up to seven days longer upon arrival for customs clearance and delivery. While the peak season for ocean freight is winding down, the peak season for air freight runs to the end of November, “but your cost is higher, so that will have a different impact on your supply chain,” he says.