As consumers become more comfortable ordering big and bulky items online, e-commerce shippers find they may need a new distribution strategy.
Also known as Ugly Freight, these items come in many forms: indoor and outdoor furniture, sports equipment, and much more. Anything that’s not a conveniently sized parcel box can slow down your fulfillment and delivery operations. Consequently, fulfillment costs rise, and consumers are disgruntled over longer delivery times.
Difficultly handling ugly freight may only be a symptom of a larger problem with your distribution and fulfillment strategy. Here’s a look at three methods we have helped implement to manage these issues.
Three E-Commerce Distribution Strategies for Ugly Freight
In the e-commerce segment, three distribution strategies dominate. While these strategies can be structured to include Ugly Freight, flexibility in the network is critical to creating a model that provides the necessary level of customer experience.
Large retailers may blend all three strategies based on commodity, owned fleet or assets, geographical limitations, competitive landscape, and retail price points.
Strategic Partnership
One strategic provider engineers and provides end-to-end service to meet the requirements and expectations of the retailer.
This strategy includes customization to the retailer’s desired customer experience, IT integration between partner and retailer, and collaboration between the partner and retailer’s customer service team.
The partner is responsible for meeting or exceeding all SLAs and owns the experience by controlling and managing frictionless handoffs of shipments between multiple providers or links between distribution centers or direct-ship vendors, pick up, and final mile delivery to the consumers.
The partnership includes customer service and communication to the consumer, providing transaction visibility to the shipment while in transit, and surveying the experience. In most of these strategic partnerships, the partner also facilitates and manages reverse logistics for the retailers.
Monthly or quarterly business reviews are facilitated to review performance and strategize for peak periods, as well as uncontrollable events. The strategic partnership provides a single point of contact for accountability and continuous improvement.
Unbundled
In this model, the retailer controls the customer service and feedback loop. The retailer engineers and manages its own end-to-end service.
The processes are similar to the strategy partnership model, except the retailer has decided to bear the cost of controlling and managing fulfillment and the customer service loop.
The retailer unbundles each leg of the shipment lifecycle, starting with warehousing through the first, middle, and final mile. The retailer effectively builds and manages its own end-to-end distribution network of providers.
This strategy affords the retailers complete control and ownership of their customer experience. It provides flexibility to quickly shift away from poor service providers by leg or segment and can allow the retailer to go to market for competing bids by segment more frequently.
This distribution model can be more cost-effective on paper but requires experienced resources to manage it. However, analyzing the overhead cost of coordination and multiple partner management can quickly overturn the business case.
Standard Network
The retailer strategically decides to offer only shipping and delivery services that will align with the service capabilities of a static common carrier or network. This strategy typically includes curbside delivery, no-signature deliveries, and no assembly or in-home service offerings.
To diligently monitor the final mile, the retailer/shipper and the provider must develop a closed-loop model to meet expectations for visibility, milestone tracking, and customer satisfaction follow-up.
How EFW Manages Ugly Freight
With Ugly Freight, the final link in the chain can be the most difficult and is typically the most critical. The overall customer experience is won or lost within the final mile leg of the transaction.
Look for a partner like Estes Forwarding Worldwide with operational expertise to engineer a closed loop or specialized operational process. This process must be rooted in an end-to-end customer experience for insight into every aspect of the process. Network connectivity is critical to capturing and measuring a company’s bundled performance and maintaining visibility into milestone completion.
Carrier profiles and scorecards for each leg of a bundled solution ensure SOP and SOW compliance and promote continuous improvement.
Handling Ugly Freight requires a logistics partner with the experience, network, and technology to handle operational execution efficiently. Using a provider with a network of vetted, trusted final mile partners significantly increases the success of e-commerce logistics companies and retailers in meeting or exceeding consumer expectations.
Currently, there are no existing asset-based providers with a single IT system that is a single source for the full scope of Ugly Freight requirements.
Companies like EFW have developed a blended network of specialized providers that have been engineered and built over time by single-source strategic providers to facilitate end-to-end services in the Ugly Freight sector. Your preferred option becomes the provider who has built the best end-to-end network that meets your requirements and expectations.
While retailers may feel they can duplicate this network on their own, they often overlook the total cascading value of the services being provided, and the quantifiable return from improved customer experience, defect reduction, and reduced overhead.
The provider shoulders the investment for technology, customer experience management, training and performance management while overseeing hundreds of carriers. The result is a seamless, frictionless end-to-end solution that presents a unified face to the customer and provides a single point of contact for the e-commerce shipper.
