It is a carrier market after post-COVID-19. When the 2020 outbreak began, the carriers were unprepared for the peak increase. Imagine shipping peaks like a treadmill. Fitness guru or not, we will want to start at a slow yet increasing pace.
You may step to the opposites side of the treadmill or stand directly on the moving part and adjust the speed accordingly. Either way, we end up on the moving tread. Then after a couple of minutes, you change the speed at a higher rate. The same applies to peak seasons in carriers and 3PLs.
But COVID-19 sped up the rates. Instead of warming up the treadmill user, it started at full speed. What happens when we start at full speed? Some may urgently turn it off, pull the emergency stop, or get flung off the equipment. There were no stop buttons for carriers, and it created havoc when the orders flung off the treadmill, so to speak.
With this, the market flipped to the shipping carriers, and brands have not been the same since.
How the Carrier Market Flipped During the Pandemic
The carriers started altering existing shipper relationships that ranked around the enterprise level. They made changes that would best suit the fulfillment system, whether it not if it ever benefited the shipper. Meanwhile, upcoming brands had an unfair shake.
“How did the carriers make decisions that best suited themselves and not the shippers?”, you may ask.
Carriers unfairly treated shippers by:
- Selective Parcel Handling.
- Volume Caps.
- Significant Sub Charges.
Important to note that these factors did not change after the peak seasons of COVID-19. We all know that fulfillment is what many countries economically rely upon.
But, once the economy was going downhill, fulfillment companies had the rug pulled from underneath their feet. It charged brands millions of dollars globally to stay afloat.
Most carriers stated they wanted their services to be better but not bigger. They preferred to keep their values in delivery but not scale with newer companies. Beneficial for the carriers, but what about the shippers? They were left hanging in fulfillment.
Brands and companies were at the mercy of carriers for their products to be fulfilled. Two years later, the first initial outbreak of COVID-19, and things have not gotten any better.
How do brand owners and shippers, the backbone of the economy, overcome the carrier market flip? Our answer: Niche approaches.
What is a Niche Approach?
Many are familiar with distributing inventory, but what about services? The niche approach to fulfillment proposes the idea of separating special services. If we walked into a store, (grocery, convenience, hardware, etc.), we would see aisles. Most aisles are assorted with plaques hanging from the ceiling.
Walmart is a good example. Each board has a number and a few listed items from the aisle. Yet, our brains may associate it with different products. If you were looking for flour, yet saw the board listed baking soda, salt, cake supplies, and birthday candles, you would assume flour was on that aisle.
Why? Because we associate flour with baking more so than cooking. It is in a niche category. Fulfillment can be the same way. In this scenario, say your company is the grocery store, and each aisle is the niched services.
The niched aisles group together to make a whole grocery store. And, if the corporation is good about their buyer journey, they align their aisles for an easy continuous process.
How Do We Find Our Niche Approach?
Now that we are familiar with the niche approach, how do the brand leaders, (or grocery stores in our example), find our niches to segregate into aisles? In other words, how do we adopt a diversified approach to the shipping program?
Reverse engineered steps to figure out our niched approach:
- Identify the shipping levels needed for fulfillment.
- Find separate carriers to specialize in those departments of programs or services.
- Create a redundancy plan.
- Form shipping matrices that align with the needs of the shipping carrier.
Another way to guide the shipping through the niche approach is to remember our Four M’s:
- Monitor: Once the program is in place, the company needs to monitor transit, inductions, deliveries, and above!
- Manage: After we retrieve the monitored information, the company needs to use that entail to manage the network. As peak times evolve, there may be hotspots developed amongst carriers and problems caused. Companies can shift their distribution amongst other fulfillment sources to support the lack in those areas. This is where we incorporate planning for redundancy.
- Make Known: Publish information between clients based on carrier information to work through upcoming issues.
- Map: Take the developed program, and map it with 3PL or carrier services. The point of this process is to align visually with the company’s expectations. Tip: Differentiate carriers or warehousing by pinpointing with colors on a printed or digital map. For instance, regional carriers can be yellow, international carriers can be blue, warehousing can be purple, etc. This method saves the company money and time.
Although it sounds simple, these methods are easier said than done! If you do not want to deal with the stress, look for a 3PL that decreases the workload!
Navigate Carriers Market with Niche Approaches and Reliable 3PLs
After our grocery store example and the Four M’s, we should have a well-rounded idea about niche approaches. But plans without execution will not succeed. But, we can overcome the carrier market with these approaches in action.
Like our grocery store example, the aisles differentiate each group of products displayed to make a cohesive store. Why do brands need to be any different? By segregating the services with various carriers, we develop a better all-around experience.
3PLs establish better niche approaches through expertise, strategies, and reliability. But, here at OceanX, we can guarantee above and beyond services because of our connected carrier networks. And, post-pandemic, we can firmly say if a brand has not hired a 3PL to help them with the carrier conflicts, now is the time!