Omnichannel Fulfillment

Explore trends and insights from ProShip’s brand new high-volume parcel shipping report, helping business get ahead

In today's fast-paced, customer-centric world, the efficiency and reliability of parcel shipping have never been more critical. To gain insights into the evolving landscape of high-volume shipping, ProShip recently conducted a comprehensive study, the results of which are detailed in the ProShip Report 2024.

The ProShip Report 2024 offers a valuable resource for businesses seeking to optimize their high-volume parcel shipping operations. This comprehensive study provides insights into the latest trends and best practices in the industry.

Let’s dive deeper into some of the key trends identified in this industry resource and discuss the potential implications for the future of high-volume parcel shipping.

Fulfillment Flexibility: A Growing Trend

One of the most significant trends emerging in the high-volume shipping industry is the growing adoption of multiple distribution centers. According to the ProShip Report 2024, 39% of shippers are utilizing this strategy to enhance efficiency and improve customer service.

By spreading inventory across multiple locations, businesses can reduce delivery times, minimize shipping costs, and better manage peak demand periods. This trend is likely to continue as e-commerce continues to grow and consumers demand faster and more convenient delivery options.

Factors driving the adoption of multiple distribution centers:

• Reduced delivery times: By locating inventory closer to customers, businesses can significantly reduce delivery times, enhancing customer satisfaction.
• Improved peak season management: Multiple distribution centers can help alleviate the strain on a single facility during peak shipping periods, ensuring timely order fulfillment.
• Enhanced disaster recovery: By having inventory spread across multiple locations, businesses can reduce their risk of disruptions due to natural disasters or other unforeseen events.
• Cost savings: In some cases, using multiple distribution centers can lead to cost savings by optimizing shipping routes and reducing transportation expenses.

Fulfillment Strategies: A Holistic Approach

While utilizing multiple distribution centers is a popular strategy, the report also highlights the growing trend of utilizing a mix of fulfillment locations, including stores, 3PLs, and drop ship vendors. This approach allows businesses to cater to specific customer needs and optimize inventory management.

Key findings:

• Stores as fulfillment centers: 18% of shippers are utilizing stores as fulfillment locations, offering convenient in-store pickup options to customers.
• Distribution centers (DCs) remain dominant: DCs are still the primary fulfillment location for most high-volume shippers, with 39% using multiple DCs.
• 3PLs and drop ship vendors play a significant role: 14% of shippers leverage 3PLs and drop ship vendors to supplement their fulfillment capabilities.

What Could This Mean for The Future?

As businesses continue to manage inventory across multiple locations, the demand for advanced inventory visibility tools such as order management (OMS), warehouse management software (WMS), and parcel shipping software solutions will increase. By integrating these technologies, businesses can streamline fulfillment processes, optimize shipment origin decision making to decrease fulfillment costs and increase delivery speed, ultimately giving customers an enhanced delivery experience.

For example, a OMS/WMS provides real-time visibility into inventory levels, proximity to delivery destination, and streamlined fulfillment processes, while a parcel shipping software connects to the optimal carrier mix (National, Regional, SameDay/NextDay and more) for the delivery as well as provide the shipment tracking events back to the OMS, WMS, and Ecom suite to complete the customer’s journey with the brand. [Learn more about the benefits of a fully integrated enterprise software stack.]

Additionally, the trend toward utilizing multiple distribution centers may lead to the emergence of regional fulfillment centers, which can provide specialized services to specific geographic areas. However, it is important to note that the decision to open multiple fulfillment centers should be carefully considered, as the costs associated with labor and storage space can be significant and pertinent in this economic climate.

Fulfillment flexibility will be crucial for businesses operating in an omnichannel environment. To meet the demands of customers who shop across multiple channels, businesses must have the ability to efficiently fulfill orders from various locations, including e-commerce, brick-and-mortar stores, and curbside pickup.

Shipping Preferences: A Shift Towards Expedited and International Options

While standard ground service remains the most popular shipping method for many high-volume shippers, the ProShip Report 2024 indicates a growing demand for expedited and international options. Over half of the shippers surveyed leverage these services, demonstrating a shift in industry preferences.

Several factors are driving this shift:

• E-commerce growth: The rapid growth of online shopping has led to increased consumer expectations for faster delivery times. Expedited shipping options, such as next-day or two-day delivery, are becoming essential for meeting these expectations.
• Globalization: The globalization of the economy has created a demand for international shipping services. Businesses seeking to expand their operations must have a solid strategy for shipping products across borders.
• Advancements in shipping technology: Improvements in tracking technology, packaging materials and technology, transportation networks, and transportation methods have made it easier and more cost-effective for businesses to offer expedited and international shipping options.

A Mix of Service Options

In addition to the growing demand for expedited and international shipping, the ProShip Report 2024 also reveals that high-volume shippers are increasingly utilizing a mix of shipping services to meet their specific needs. While standard ground service remains the most frequently used option for cost-effectiveness, shippers are strategically leveraging expedited, international, and even same-day services based on urgency and delivery distance.

Key findings from the report:

• Standard ground service remains the most popular: 38% of shippers primarily use standard ground service.
• Expedited and international shipping are on the rise: 25% of shippers utilize expedited services, while 25% leverage international shipping.
• Same-day delivery is gaining traction: 10% of shippers offer same-day delivery options, indicating a growing demand for immediate fulfillment.

What Could This Mean for The Future?

As consumer expectations continue to evolve, the demand for expedited and international shipping options is likely to grow further. This increased demand will intensify competition among carriers, leading to lower prices and improved service offerings. Additionally, advancements in shipping technology, such as drones and autonomous vehicles, may provide new opportunities for faster and more efficient delivery of packages.

To stay competitive and meet the growing demands of customers, many shippers will need to upgrade or invest in advanced shipping solutions. By leveraging elite shipping software, businesses can access a wider variety of carriers and service offerings, enabling them to meet the diverse needs of their customers.

Technology Outlook: The Rise of Automation

Another key trend identified in the ProShip Report 2024 is the growing belief in the transformative power of automation. 36% of shippers surveyed believe that automation will significantly impact parcel shipping in the coming years.

Automation technologies, such as robotics, artificial intelligence (AI), and more, have the potential to revolutionize the shipping industry by:

• Increasing efficiency: Automated systems can streamline processes, reduce manual labor, and minimize errors, leading to increased efficiency and productivity.
• Reducing costs: Automation can help businesses reduce labor costs, improve inventory management, and optimize transportation routes.
• Improving accuracy: Automated systems can enhance accuracy and traceability throughout the shipping process, from order fulfillment to delivery.

Addressing Labor Shortages

Labor shortages and rising labor costs emerged as the most significant concern among shippers in the report. To address the challenges of labor shortages and rising labor costs, businesses should consider implementing automation solutions. While automation can help reduce the need for manual labor, it is crucial to invest in workforce training and upskilling to ensure a smooth transition and maximize the benefits of these technologies.

Optimizing Your High-Volume Parcel Shipping

To stay competitive and meet the growing demands of customers, businesses should embrace automation and technology. AI-driven route optimization and data-driven decision making can streamline operations, reduce costs, and improve efficiency.

Manually analyzing and executing vast amounts of shipping data can be cumbersome and time-consuming, especially for high-volume shippers. Implementing robust shipping software can not only record data collection but also execute complex business rules, empowering businesses to make informed and automated decisions on carrier selection, cost reduction strategies, and more.

What Could This Mean for The Future?

As the benefits of automation become more apparent, businesses are likely to invest in these technologies to gain a competitive advantage. While the introduction of automation technologies may lead to job displacement in some areas of the shipping industry, it is also expected to create new job opportunities in areas such as technology, data analysis, and logistics management. If businesses want to get ahead, they should focus on strategies that will harness the full potential of automation.

In the future, the relationship between humans and machines in the shipping industry is likely to evolve. As automation becomes more prevalent, it will handle routine and time-consuming tasks, human oversight and decision-making will remain crucial. Humans will continue to play a vital role in developing and managing automated systems, ensuring that they are used effectively and efficiently.

Embracing the Future of High-Volume Parcel Shipping

The ProShip Report 2024 provides valuable insights into the evolving landscape of high-volume parcel shipping. As a thought leader in the market, ProShip is uniquely positioned to offer detailed and thought-provoking knowledge to the parcel shipping industry.

Key trends identified in the report include:

• Fulfillment flexibility: The growing adoption of multiple distribution centers to improve efficiency and customer service.
• Shipping preferences: The increasing demand for shipping options outside of just ground, driven by e-commerce growth.
• Technology outlook: The potential of automation technologies to revolutionize the shipping industry.

To learn more about the trends and insights discussed in this blog post, download the full ProShip Report 2024. If you're interested in learning how ProShip's industry-leading shipping solutions can help you navigate the challenges and opportunities of high-volume parcel shipping, please contact us to schedule a discovery call today.