Much to shippers’ chagrin, pandemic-fueled headwinds – including labor shortages and changing consumer behaviors – continue to impact the entire supply chain. A few months into 2022, capacity constraints persist and rates remain elevated.
Companies across the industry are facing similar challenges, but capacity concerns are especially strong in the parcel space. There has been a tremendous increase in parcel demand since the beginning of the coronavirus pandemic; this can be attributed – in large part – to the growth of e-commerce. Over the past two peak seasons, parcel demand has exceeded available capacity by millions of shipments per day.
As parcel demand has skyrocketed, shippers have obviously been faced with serious capacity issues. They have also had to grapple with order fulfillment challenges, with many retailers needing to institute new ship-from-store models in order to meet consumer demand. This was especially true at the beginning of the pandemic when physical stores were closed and new inventory was difficult to source.
“I think the main thing that helped shippers going into 2021 is that they were ready for the ship-from-store process,” Logistyx President Ken Fleming said. “They had enabled the stores to be ready to be functional with respect to inventory fulfillment.”
With physical stores reopened and new fulfillment models becoming more familiar, all eyes will be on carrier capacity management in 2022. While many companies added new carriers in 2021 in order to increase their options, all carriers are operating with serious limitations during this time. Balancing those restrictions well will require companies to implement more fleshed-out carrier management strategies in the coming year.
“Carrier capacity will remain front and center going into 2022,” Fleming said. “Those challenges still exist, and we are forecasting even higher volumes going into the 2022 peak. We need to be working now to understand how to utilize capacity.”
In addition to figuring out how to manage their available capacity, many shippers are embracing multi-carrier parcel shipping applications that enable them to add new carriers to their operations quickly without going through time-consuming software changes. These technologies – including Logistyx’s cloud-based multi-carrier parcel shipping solution – essentially streamline the label to delivery process.
“Our sole focus is on multi-carrier technology,” Fleming said. “We integrate with some of the largest warehouse management applications, but we also work with small businesses that are doing self fulfillment, whether it is in a basement or a small warehouse.”
Ultimately, shippers should focus on ways to holistically optimize their capacity strategies in 2022. For some, a multi-carrier parcel shipping solution can play a significant role in that process.