With skyrocketing parcel volumes, e-commerce shipping software has
become a necessity for shippers across many verticals. In this QAD
Precision Report we look at the questions to ask when choosing an
e-commerce shipping solution.
This week, Amazon’s Prime Day marked the unofficial start of peak
parcel shipping season. This year is shaping up to be a peak season
unlike any other. Black Friday is just six weeks away. Although it
began as a bricks-and-mortar sales event, Black Friday deals are now
ubiquitous online too.
Amazon’s Cyber Monday takes place four days later on 30 November.
Last year, online sales for the five days between Thanksgiving and
Cyber Monday exceeded
However, the biggest online shopping event takes place on 11 November
— Alibaba’s Singles’ Day. Last year, online shoppers spent $38.4
billion during the sale.
In 2019, 103
billion parcels made their way around the world. This year, the
figure is likely to be even higher.
In the US, a number of major retailers saw e-commerce volumes
skyrocket in the second and third quarters. Some experienced growth of
more than 100 percent. While brick and mortar stores were shut,
shoppers turned to e-commerce merchants, omnichannel retailers and
This surge in e-commerce orders was not unique to the US. Between 25
and 80 percent of shoppers in France, Germany and the UK, did
more than half of all their shopping online during lockdown.
E-commerce volumes spiked in Australia too. After the World Health
Organization declared that Covid-19 was indeed a pandemic, e-commerce
volumes grew 80 percent in 8 weeks.
The full impact of the global pandemic on holiday shopping and parcel
shipping is as yet unknown. However, given this unprecedented growth,
carriers are expecting a busy peak season.
UPS and FedEx both announced seasonal surcharges in August. For the
most part, these target large volume parcel shippers.
UPS’s surcharges apply to companies shipping
25,000 or more packages a week. These shippers will pay between
$1 and $4 extra from 15 November 2020 through to 16 January 2021. The
difference in price is for ground and air services.
FedEx will apply surcharges to companies shipping more than 35,000
parcels a week using either FedEx Express or Ground. The
surcharges will apply to shipments made during the periods of 5 to 16
October, and 16 to 29 November.
In addition, FedEx will calculate surcharges based on pre-pandemic
volumes between February 3 and March 1. An additional fee of $1 per
parcel will be applied to ground deliveries when shippers exceed 110
percent of February volumes. Furthermore, FedEx will charge up to $4
per parcel if volumes exceed 500 percent of pre-pandemic volumes.
Even the US
Postal Service is adding additional charges for the holiday
season. The USPS will charge an extra 24c to $1.50 per parcel from
18 October through to 27 December.
Parcel shipping volumes have grown on average 19 percent a year since
2013. The pandemic may have caused an unexpected increase in volume
this year. Nevertheless, e-commerce volumes are only trending one way
With growing volumes, a single carrier and/or manual workflows to
manage the shipping process is becoming untenable for many organizations.
shipping software allows shippers to automate this process. This
results in operational efficiencies and better customer service.
Furthermore, e-commerce shipping solutions offer access to a multi
carrier network. These can include major, global players as well as
national and regional carriers.
A multi carrier e-commerce shipping strategy has two major benefits.
Firstly, shippers gain access to more shipping options and more
capacity. This allows them to meet customer demands at times when
capacity is tight.
Secondly, and perhaps most importantly, e-commerce shipping software
can result in significant savings. These include:
Automatically assigning every parcel to the lowest cost rate and
service that will meet the delivery date
Monitoring shipping volume by carrier to avoid peak season volume surcharges
Consolidating shipments bound for the same geographic destination
There are a multitude of e-commerce shipping solution providers. When
it comes time to choose a solution, here are three important questions
The first question to ask yourself is this: where are you shipping?
Some e-commerce shipping software solutions are strong domestically,
but cannot support global shipping operations.
Are international deliveries a significant, or growing, portion of
your shipping operations? If so, you will need a solution that offers
As well as accessing a worldwide network of multiple carriers, your
e-commerce shipping software should localize. In other words, you will
need multilingual, multi-currency and multi-date capabilities. All
documentation will be automatically generated, including carrier label
printing, in the correct language and format.
Furthermore, if international shipping is a growing part of your
business, you may need a solution that includes export
An integrated solution will allow you to do both. This could include
customs declarations, global documentation, customer screening,
license determination and so forth.
Are you experiencing growing volumes? If so, you will need an
e-commerce shipping solution that will allow you to manage this easily.
Many solutions offer parcel tracking, but visibility is not enough in
itself. High volume shippers need global parcel tracking with delivery
exception management capabilities. This allows for real time
tracking of all shipments, with all carriers from a single portal. If
a parcel is at risk of missing its delivery date, staff will be alerted.
Furthermore, high volume parcel shippers should audit freight
invoices for unexpected charges or service levels not received.
Manually checking invoices for discrepancies is a time sink. However,
auditing software can automatically check and reconcile
invoices. Automated solutions can do this for invoices that are
hundreds of pages long and include tens of thousands of line items.
A final consideration is returns. Customers return 30 to 40 percent
of all purchases from e-commerce merchants and other online sellers.
For comparison, only 10 percent of in-store purchases are returned.
If your e-commerce volumes are growing, the number of returns will
too. Your e-commerce shipping software must allow you to manage orders
and returns. When goods come back, they need to do so as efficiently
and as cost effectively as possible.
If your shipping volumes have been steadily increasing over the past
few years, you need to take that into consideration. In addition, if
increasing cross-border or international sales is part of your
strategy, your solution needs to support that too. Finally, if you are
diversifying your product line, you need to take that into account as
well. This is particularly the case if your goods have dual use
applications, are restricted or contain hazardous materials.
Forecasting the future can be an imprecise business. However, when
choosing an e-commerce shipping solution, this is necessary. Given the
time and investment requirements, your solution provider needs to
offer ongoing support as you grow your business.
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QAD Precision, a division of QAD Inc., provides industry-leading global
trade compliance, and multi carrier transportation
execution solutions from a single, integrated platform. An
ISO-certified company, QAD Precision assists companies to streamline
and transportation operations, optimize deliveries, and increase
logistics ROI. QAD Precision’s scalable and extensible solution easily
integrates with existing ERP and WMS solutions. Industry leaders in
every region of the world rely on QAD Precision’s global support
centers to leverage thousands of carrier services and manage millions
of global trade and shipping transactions every day. For more
information about QAD Precision, visit www.qadprecision.com.
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