Due to the pandemic and peak season, shipping carriers are continuing to adjust their operations to get packages out the door as quickly as possible. In the first half of October, the three big domestic shipping carriers, USPS, FedEx and UPS, have implemented major changes to how they process packages with fulfillment implications for your D2C business.
As of October 1, the United States Postal Service (USPS) is permanently extending their delivery windows for First Class Mail (FCM) package delivery in order to streamline delivery and increase reliability. Previously, FCM delivery windows were advertised to be 1-3 days, but have permanently extended to 1-5 days.
With this change, however, not all shipments will be delivered slower. According to USPS, 64% of FCM package volume will be unaffected, 4% will be faster (2 days vs. 3 days) and 32% of packages be slower (add 1-2 days).
This shift will disproportionately impact shipments to the coasts and more rural areas, according to The Washington Post. The main driver of slower delivery times is the postal service reducing air shipments, and moving to ground. For example, in Nevada, an estimated 75% of mail is expected to have longer delivery times than before, according to Business Insider. (See how USPS slowdowns will impact different states here.)
As we inch deeper into Q4, both FedEx and UPS are warning of delays due to record-breaking numbers of ecommerce orders being processed by hubs that are short-staffed. To address these bottlenecks, on October 13, the White House announced that FedEx and UPS have committed to begin operating 24/7 for a “90-day sprint” through the end of 2021. Together, these two carriers ship a huge percentage of the US’s total packages (40% in 2020).
Short-staffed hubs require carriers to reroute packages to other hubs and processing centers, which is one of the factors extending delivery times. For example, one of FedEx’s hubs in Portland, Oregon is only 65% staffed, and 6.4% of their volume is rerouted upon delivery every day.
Further up the supply chain, the Port of Los Angeles is set to move to a 24/7 schedule to reduce congestion, as the time it typically takes to import products from Asia has doubled over the past months.
USPS First Class Mail remains one of the most economical and fast options for shipping lightweight packages. Other lightweight economy options are available, but generally leverage the USPS network (like DHL eCommerce, or UPS SurePost) to complete delivery, and therefore are likely to experience even longer shipping times than USPS. If you ship via USPS and advertise a certain delivery time range, you should modify your communications with customers and your checkout pages in order to share accurate estimates.
The postal service’s extended delivery times actually now closely match the ground standards for UPS and FedEx. After Q4, it is worthwhile for companies shipping lightweight products to reevaluate their warehouse strategy: location matters more now for all shipments for optimizing delivery times, regardless of weight.
FedEx and UPS 24/7 shipment processing should help avoid further slowdowns, but will not return delivery times to their pre-peak and pre-pandemic windows, so you should still buffer delivery times.
The Port of LA’s 24/7 schedule may help move your inventory through faster, but you may still meet bottlenecks with freight and drayage service shortages in retrieving inventory from the port, so plan accordingly.
For more insight on peak season fulfillment, we invite you to read our comprehensive post, How Every D2C Brand Should Prepare for the 2021 Holiday Peak Season, or contact us to learn more about how the right fulfillment solution is critical to helping you navigate peak season and the pandemic.
