The U.S. parcel market is the largest sector of the logistics industry. In 2017, the U.S. parcel market was worth $84 billion and 12.7 billion shipments, reports the Journal of Commerce, and the vast majority of those shipments weighed less than 5 pounds. With the rise of e-commerce, demand for parcel has skyrocketed, and shippers are struggling to secure available capacity and affordable rates. Shippers need to understand the top trends in parcel shipping for 2019 to develop their logistics strategies and maintain control over logistics spend.
Companies Will Turn to Big Data Analytics for Customer Awareness
Logistics are evolving to reflect the increased demand placed on the industry. Across the spectrum, logistics costs are increasing. This is the result of diminished capacity and tightening driver availability. As a result, companies are looking for any and all means to reduce costs and meet consumer demands. As explained by Post&Parcel, the use of big data analytics to understand consumer awareness are one of the most significant trends in parcel shipping for 2019.
The 2019 Transportation Management Trends for all Shippers to Know
In fact, 94 percent of parcel carriers plan to use data analytics to improve customer awareness in 2019. Meanwhile, shippers can leverage big data to give customers what they expect– an indeed cross channel customer experience. As the value of big data increases, shippers will need to invest in new technologies, such as the Internet of Things and cloud-based platforms, to collect and analyze data. Furthermore, the value of big data lies in connected systems, so integration between systems will be a top priority for carriers and shippers looking to expand customer awareness in the coming year.
Faster, Easier Pickup Will Be Among Top Trends in Parcel Shipping for 2019
Another trend in parcel shipping for 2019 that will dominate the market will involve how customers receive their orders. According to Forbes, shippers and carriers face increasing pressure to meet customers’ expectations, shorten delivery windows and pick up products in unconventional locations. Pop-up distribution centers, self-service kiosks, buying online and pick up in-store (BOPIS) delivery options are coming to the forefront of parcel management. The goal is simple— get packages closer to consumers and the ultimate delivery destination.
In addition to faster, easier pickup, free next-and two-day delivery will become the standard throughout the industry. This is an approach to stay competitive with Amazon, but it will have an additional ramification as major retailers, including Walmart and Target, logistics strategies to offer free, rapid delivery of parcels.
As last-mile delivery service picks up the slack of expanding the parcel market, the demand from consumers will rise exponentially. Sixty-seven percent of consumers abandon their purchases if delivery takes longer than expected, and this is a 16-percent increase from abandonment rates in 2017. Ultimately, shippers offering faster, lower-cost shipping will see an increase in profitability and business.
Carriers Will Use Self-Service Kiosks to Reach More Shippers
The last mile conversation must also include the use of self-service kiosks to access parcels. While self-service kiosks are commonly associated with the pickup leg of logistics, involving consumers picking up their purchases, they will make a new emergence in 2019. Carriers will begin to implement self-service kiosks to give shippers the freedom to send packages last-minute and without the delays of manual paperwork. This may be possible with carrier-developed apps and more. Of course, carriers will also need to expand their networks to allow customers to pick up products such as parcels to. Yes, we are going back to consumers picking up products at non-traditional locations. The size of these kiosks will vary greatly, but it is easy to assume they will appear like Amazon pickup locations and using a wall of lockers for fast package pickup. The same process could be repeated in reverse too, giving consumers another option for returning packages to shippers.
Parcel Will Rise as the Most-Valuable Part of E-Commerce Shipping
The value of parcel logistics is expanding, and it is essential to successful e-commerce practices. With the market tighter than ever and rates set to increase, shippers will take note of their value and be willing to pay a premium, even at the cost of their profitability. As a result, according to Mark Solomon of FreightWaves, one of the other significant trends in parcel shipping for 2019 will revolve around the use of predictive analytics to proactively manage parcel operations in the warehouse and throughout the logistics network. The same concept will apply to carriers, using predictive analytics to allocate delivery resources where necessary, and the results of carrier performance will be made public. This will effectively encourage shippers to do business with carriers that can meet their standards and delivery expectations.
Consumer Expectations for Faster Delivery Will Increase
Consumers are willing to pay a premium for faster delivery, reports Deena M. Amato-McCoy of Chain Store Age. This represents a significant change in how carriers and shippers will approach parcel shipping. If consumers are willing to pay more for faster delivery and access to their purchases, shippers can use this information to redefine their parcel strategies to give customers more delivery options. In other words, shippers can work to reap these parcel costs and offer free shipping, but they could provide same-day or even next-day delivery at a premium price, enabling competition with Amazon.
Align Your Small Package Shipping Strategy to These Trends Now
Shippers need to reevaluate their small package shipping strategies to focus on the top trends in parcel shipping for 2019. Understanding what to expect from parcel demand and the parcel services and delivery options available will help shippers reach more consumers and build positive experiences.