FedEx’s 7-day shipping means more deliveries all week long, and contractors will have to expand their capacity to handle it all. But are you ready to tackle the deeper shifts in e-commerce driven shipping, such as greater variability in routing and increased resource needs? Here’s what you can do to prepare.
FedEx’s plans to deliver packages seven days a week starting in January next year, or even earlier for some markets, should come as no surprise. E-commerce growth is roaring, and there is big business in getting packages to people as quickly as possible. More and more of us expect near-instant delivery—online shoppers now want their goods within two days, not two working days, and many people can’t wait to enjoy their new purchases while relaxing at home on Sunday.
It’s only a matter of time before next-day shipping becomes the new normal all week, and companies across the industry are racing to adapt. Amazon Prime is building its own delivery network, and Uber Freight plans to put its fleet management software to good use in the micro-delivery market. Even UPS has entered the fray with 7-day shipping, which will help balance its load more easily throughout the week.
For contractors like us, is this all wonderful news? Online shopping demand is likely to stay strong for years, and companies like FedEx must rely on ISPs to offer swift and precise deliveries. All this means more revenue for ISPs ready and able to do the work. But how does it affect the bottom line margin?
That said, FedEx competing on e-commerce deliveries with Amazon also brings unique challenges that the network is not ready for just yet:
1. Weekend shipping makes package tracking down to the hour essential. If you’re expecting a package before dinner, you want to know if you can squeeze a workout or a grocery run around it rather than waiting at home all day.
2. Your regular drivers won’t be driving 7 days a week, and part-timers aren’t always easy to schedule for the weekends. Between their unfamiliarity with your company’s routes and high turnover, part-timers require more investment in training and systems that are easy to learn and use.
3. Current daily static routes will become more dynamic and have more stops and day-to-day changes. The boundaries around work areas must flex so that drivers can share capacity if needed, but not so much that it makes their own routes inefficient. Of course, this should all be automated to save time and capacity.
4. Package volume will vary greatly, even more than it does today. Sunday shipping means more last-minute deliveries, and seasonal spikes will become sharper as next-day delivery over holiday weekends becomes the expectation.
We can’t afford not to adapt our fleets to this new, e-commerce-driven demand. Being efficient and responsive has never been more crucial, and ISPs that can meet these new needs will be the ones to thrive in the new delivery landscape.
Thankfully, these issues can be addressed by a robust, efficient, easy-to-use route management system. We’ve built a customized route optimization platform that uses live tracking, intelligent vehicle routing, and big-data analytics to help ISPs trim redundancies and read the patterns of e-commerce demand. Drop us a line at firstname.lastname@example.org, and let’s chat about what our platform and consulting services can do for your business.