A perfect storm is pushing parcel volumes to unprecedented heights: COVID-driven B2C eCommerce + the normal holiday rush + the second COVID wave. Parcel carriers are warning shippers that they may not be able to handle their volumes due to the severe strain on their capacity. That’s why going forward, it will be more important than ever for shippers to have a multi-carrier parcel management solution in place to diversify their carrier portfolio and help manage delivery disruption risks.

For its recent quarter that ended Sept. 30, UPS reported a 13 percent consolidated volume increase compared to the same period in 2019. Simultaneously, its revenues grew by close to 16 percent from the previous year, topping $21 billion.

The UPS report came on the heels of FedEx reporting robust volume for its first quarter of fiscal year 2021 that ended Aug. 31, with its own hefty revenue growth of 13 percent overall year-over-year. FedEx Ground saw its revenue jump 35 percent during the quarter on what it said was “primarily due to residential delivery volume growth, including the sharp increase in demand resulting from stay-at-home orders and other responsive measures to the COVID-19 pandemic.”

Carrier capacity crunch adds to consumer concerns

Just because carriers are doing well financially, there may not be a trickle-down to retailers and eCommerce businesses’ bottom lines, especially those retailers who rely on the holiday rush to round out their earnings.

Carriers are reportedly telling some of their largest shippers that there may be limits placed on the number of parcels they will accept during the holidays as their capacity is stretched to their current limits.

Shipping and delivery issues are primary concerns to many holiday shoppers who still expect discounted and free shipping, quick delivery times, and the ability to track their packages.

Scalefast’s “2020 Holiday Hold-ups Report” revealed that shipping issues ranked high on the list of concerns for holiday shoppers. Leading the concerns were a lack of discounted or free shipping (42 percent), followed by long delivery windows (29 percent), and no or poor tracking for shipping timelines/delays (21 percent).

A multi-carrier solution?

To help reduce disruptions during this peak of all peak shipping seasons, retailers are looking beyond the major carriers to ensure their items arrive at customers’ homes in time.

According to an article in Supply Chain Dive, carrier diversification can help avoid inefficiency. It reported that Convey’s survey showed that sophisticated shippers used to be about 60 percent more diversified than others; that percentage is upward of 80 percent now. 

Of course, while it may help keep packages flowing during the busy holiday season, expanding a carrier network to include regional and local carriers is not without its issues. This is because most local delivery carriers lack the kind of technology that larger regional or national carriers have, leaving shippers with manual shipping processes that can add time and costs to shipments—the opposite effect of what they are striving for. Using a multi-carrier parcel management solution that can automate interaction with a diverse network of local delivery services is essential to implementing omnichannel shipping strategies in an attempt to beat the carrier capacity crunch and deliver what the customer wants this holiday season and beyond.

Visit us to set up a free, personalized demonstration of Transtream multi-carrier parcel management solution to see how it can help you manage a growing and diverse network of carriers.