The resounding message to stopping the spread of the coronavirus is to limit contact with people, especially strangers, as much as possible. That effort by consumers, along with supply chain slowdowns, is impacting the fulfillment and delivery of large shipments, according to fulfillment data from Convey, a last-mile technology vendor.
Effects on fulfillment time
Fulfillment time during the coronavirus pandemic for freight packages increased 433% in May to 75.2 hours on average from 14.1 hours in April. Freight items are large items or a collection of boxes shipped on one pallet, moving as a group, Convey says. Fulfillment time is the length of time from when a shopper hits buy to when the order is picked up by the carrier for delivery. Fulfillment delays with such large items could be a result of supply chain slowdowns because these types of orders are often not held in inventory and instead are frequently “made to order” once the shopper makes the purchase versus fulfilling the order out of existing inventory, says Kirsten Newbold-Knipp, Convey’s chief growth officer.
Fulfillment time data is the average fulfillment time for all shipments shipped out at that time across the Convey platform. Shipments aren’t equivalent to packages.
And there are other issues with freight shipments and deliveries as well. “In addition to supply chain slowdowns, there are additional challenges for freight because receiving the shipments often requires interaction with the driver and in some cases letting the driver into one’s home for white glove services,” says Carson Krieg, co-founder and director of strategic partnerships for Convey. “Convey has heard feedback from its customers and carriers that consumers are refusing freight shipments because they do not want to interact with drivers due to COVID-19 fears.”
What the data is saying about fulfillment
Convey’s data is based on tens of millions of packages shipped from more than 500,000 U.S. locations across the company’s client base. Analysis excludes Amazon shipments. The vendor has 130 retail clients in many merchandise categories, including retailers The Home Depot Inc. (No. 5 in the 2020 Digital Commerce 360 Top 1000) and Eddie Bauer LLC (No. 137).
Shipment volume in May increased by 49% year over year, Convey says. While this is a significant increase, this is less than the 60% increase for April. The stockpiling from earlier weeks of COVID-19 has likely lessened, and some stores have re-opened, Convey says, leading to slower shipment growth.
Overall, on-time deliveries decreased to 75% of orders delivered on time in May from 79% in April. On-time deliveries for May of 2019 were at 90%. The surge of shipment volume and decrease in logistics and warehouse labor in April has likely created some backlogs in the supply chain, Convey says.
On-time deliveries decline
On-time deliveries for freight shipments were worse, Convey says, and still haven’t rebounded. They began declining in April, decreasing to 68% compared with 71% in April 2019. In May, 66% of freight shipments were delivered on time, compared with 71% a year earlier.
The biggest decline in on-time deliveries was at UPS, where on-time rates dipped to 75% in May from 81% in April. FedEx also saw a slight dip to 75% in May from 77% in April.
Parcel fulfillment has increased to 25.6 hours at the end of May from an average of 16.3 hours at the beginning of April. Unlike freight, in general, parcels are boxes shipped and labeled individually.
Negative customer feedback has also increased. For those customers who elected to provide feedback, 41% reported that they had a negative delivery experience in May, Convey reports. While proactive communication about delivery issues may have helped decrease negative feedback, prolonged logistics issues are likely wearing away at consumer sentiment, Convey says.Favorite