The COVID-19 (coronavirus) pandemic has already altered the entire retail industry in a matter of weeks, and many business owners are reeling from loss of foot traffic. Ecommerce is surging, which is putting further strain on already-stressed supply chains and causing shortages of most household and medical items. The growth of online shopping as people practice social distancing is good news for anyone selling on Internet marketplaces and platforms, but it is safe to say that the pandemic is affecting ecommerce shipping. This guide will outline the impacts on global supply chains at the time of writing as well as offer solutions for times of crisis and improvements to your own operation.
As for coronavirus prevention, keep up to date with the CDC’s recommendations and be sure to wash your hands, sanitize all surfaces, stay home if you’re feeling sick and limit in-person social interaction whenever possible. This too shall pass.
Communication is Key
Although creating a communication plan is one of the first steps you need to take, it deserves its own emphasis because it is one of the most important steps. Your initial communication needs to be to your team and include the business continuity plan and the steps you’re taking to protect their health and wellness. Many retailers are having to furlough their employees at this time, which is something that must be communicated immediately if it is an unfortunate part of your plan. Do not delay in telling your staff the status of their employment. For those who will be transitioning to remote work, communicate when they are expected to be available and which meetings they should plan to attend.
Once your team knows what is going on, you can turn your focus toward external messages. Work backward through your supply chain and have honest conversations about logistics and financials so you have full transparency and more data with which to make decisions. You’ll have a clearer picture about how to move forward and what your customers will want to know.
This leads us to the dreaded COVID-19 response emails. By the time you read this, you’ll have likely received dozens of messages from businesses you forget had your contact information. The bright side is that now you can unsubscribe and get rid of inbox clutter. The downside, however, is that you don’t want to become a cliche. Our advice: post a business response announcement on your website, and update your social media channels with posts linking to the response and then move on. Your most involved customers will appreciate the information, and you’ll avoid bombarding everyone else.
The State of US Supply Chains
Your business has reacted to the changing retail landscape, and your entire team and supply chain is in the loop, but what about everybody else? As it turns out, most operations are continuing as normal—the supply is on par, but the demand is outpacing it. The shortages of toilet paper, hand sanitizer and other products will be a short term problem because the major supply chains are designed to meet normal demand for these items. Right now we’re seeing unusual buying patterns, but analysis will be able to reveal a restocking schedule on par with the current demand. In fact, with truckers having far less traffic on the roads, these items should be able to be restocked more quickly.
Those experiencing the worst broken links in their supply chains are businesses that rely on international suppliers and Amazon FBA. Amazon in particular has deprioritized all products deemed “non-essential,” which covers basically everything except for household staples, medical supplies and other high-demand items. Sellers and consumers alike can expect major delays with deliveries estimated more than a month from order placement.
Overall, aside from expected delays out of quarantined areas in China and Italy, major shipping carriers have reported business as usual. This is certainly good news, but shipping is only one link of your supply chain. What about the rest of it?
The Importance of Supply Chain Mapping
Supply chain mapping is the process of auditing each product’s entire roadmap from the raw materials stage to the delivery on the end customer’s doorstep. It is a costly and laborious process, yes, but it is worth the investment because it gives you the information you need to identify high-risk suppliers, parts and sites and alternative sourcing methods in case a crisis strikes. Then, you’ll be first in line with these alternative providers—proactive while everyone else is reactive. According to Forrester, 94% of the Fortune 1,000 have experienced coronavirus related supply chain disruptions, which shows a huge majority of companies are scrambling to react.
Companies often find the value of a supply chain map far exceeds the cost of its creation, and it is the best preparation for events like natural disasters, financial market downturns and even global pandemics. Sometimes, it also reveals a need to switch suppliers in order to avoid the impact of a global catastrophe.
Why You Might Need to Switch Suppliers
Increasingly in the last year, economists have been advising businesses to start localizing their supply chains in order to avoid Chinese tariffs. A recent BizBuySell survey found that as of February 2020, the cost of doing business had increased by 37% for U.S. small businesses, and 46% of them were losing customers. There was a clear price to pay, even before the coronavirus outbreak, and now the stakes are even higher.
Localizing your supply chain can mean either finding US-based suppliers or building a new factory here in the States. Either way, you’d be taking advantage of the diverse American resources and being better prepared for a disaster because you’re not putting all of your eggs in one basket. Furthermore, making the switch would boost our economy by revamping the manufacturing, farming and other blue collar sectors whose work has been suffering due to outsourcing and automation. A return to an all-American supply chain would create jobs, train employees to be highly skilled workers and even reduce carbon footprint because of shorter transportation distances.
There are other benefits to localizing your supply chain: saving on energy costs, moving away from ethically questionable labor practices in third-world markets and being able to keep up with an ever-quicker trend cycle because you don’t have to wait for overseas shipping.
How to Leverage New Ecommerce Technology
As the ecommerce landscape evolves, so too does the technology that helps online retailers realize their full potential. There are software solutions that offer everything from CRM to accounting automation to logistics and order fulfillment specifically tailored to ecommerce sellers. This makes it easier than ever to update existing shopping carts, point of sale, payment processors and other systems in favor of multipurpose solutions.
For example, with Visible, we work with many different software providers to deliver our rates and savings to shippers, we operate our own pick/pack/fulfill warehouses, multi-carrier freight brokerage services and even tailored custom, on-demand packaging materials. All of these activities work together in a supply chain, so why risk a disjointed process with multiple software systems having to integrate with each other when you could get it all in one?
The idea driving Visible is to connect shippers with all of these resources using strategic partnerships with shipping industry leaders who can help you optimize your business. As a result, you have a more streamlined supply chain, happy customers and the weight of potential logistics nightmares off your shoulders.
Choosing a Shipping Carrier
When you’re getting started building out your ecommerce supply chain, one of the most important partnerships you’ll have is with your shipping carriers. The overall theme is to choose a carrier that will give you the best rates for the products you sell, but there are important questions to ask yourself that should factor into your decision. Here are some ideas:
- Where are you shipping? This will affect if you choose a local, regional, national or international carrier.
- How granular do you need your tracking info to be? If you want your customers to be able to track their orders, you will want to take this into account.
- How big and heavy are your packages? The weights and dimensions of your shipments will determine your rates.
- What is the extent of the carrier’s insurance? This can affect cost, as well as your need to source additional insurance.
- What is the pickup schedule and minimum? Where you are on the carrier’s route is the difference between same-day shipping and next-day shipping, and you might have to pay additional fees if you don’t meet the minimum.
- Speaking of fees, what are the additional fees? Some carriers charge extra to deliver to residential addresses, to provide shipping supplies or to deliver on weekends.
There are several factors to consider, and it can be a headache to sort through all the information. That is why it is wise to invest in a shipping software that can do the work for you and ensure you get the best rates every single time.
Save on Shipping Costs
Visible’s “inverted dimensional” shipping rates take each package’s measurements and automatically determines whether it would be more cost effective to ship it based on weight or based on dimensions. By leveraging our unique postal partnerships, expertise and high-volume shipping rates, we help clients save an average of 20% on e-commerce shipments. How do we do this? We employ a multi-carrier strategy to get you the best rates every step of the way and then apply the savings on top of an already-optimized price point. This helps you avoid the “accessorial costs” that can be accrued by sticking with one carrier, and those fees add up. As a result, Visible helps companies such as Stamps.com, Endicia, Pitney Bowes and 25,000 others save millions per year on shipping.
Contact Visible Today
Visible Supply Chain Management has thousands of satisfied customers and clients that rely on our company for their various shipping and logistics needs. We’re here to help you today. Contact us at 877.728.5328 to start the conversation about how we can help your company.