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5 Parcel Shipping Trends for 2022 (and How to Combat Them!)
We all know 2021 was a doozy for shipping. Well, expect more of the same in 2022. Supply chain issues are creating huge challenges for parcel shipping. Here's how it all unfolds: Consumers are buying more but expecting faster delivery. The long-trusted strategy of just-in-time inventory is being put to the test. Suppliers can't keep up with product demand. Cargo space is in huge demand while driver shortages are at its worst. All of this is driving shipping prices up and shippers scrambling to find shipping carriers to deliver their goods.
To help you navigate these issues in 2022, we're sharing insights on what's causing these disruptions and providing ways you can make the most of a challenging situation.
Trend 1: Warehouse and inventory management issues continue to plague shippers
Just-in-time (JIT) supply chain management has been the staple for inventory optimization for the last 60 years. Then COVID-19 hit, and the just-in-time inventory process turned into a not-even-close inventory problem. While JIT won't completely go away, the supply chain management is expected to go through restructuring. Meanwhile, we're looking at another year of suppliers and manufacturers who can't move inventory because of the cargo space shortage.
How to get ahead of inventory management issues
Replace your centrally located storage facility with multiple micro-warehouses closer to your customers. Ask your third-party logistics (3PL) provider how its transportation management system (TMS) can tie together shipping operations at all your facilities. You'll get a bird's eye view of your total supply chain operations and counseling from a logistics expert on which speed of service will give you the best value for your budget.
Trend 2: Inflation further impacts shipping costs
Inflation rates going into 2022
Inflation has settled in for the long haul — some experts are saying it could last well into 2023. It's not something you want to hear, but supply chain issues are at the heart of it. And, who ends up feeling the crunch? Shippers and their customers. The good news — from a shipping perspective, anyway: Higher consumer prices may slow consumption, which will eventually help bring shipping prices down.
Strategize your shipping plan to save money
Reevaluate your parcel shipping spend and send habits. What services do you absolutely need to satisfy your customers and which ones can be pulled back? 3PL experts can help you evaluate your shipping needs and show where you can make adjustments. You might find your business is eligible for reduced e-commerce shipping rates. Also, consider ways to recapture some of your shipping expenses.
Trend 3: Logistics providers make measurable technological advances
Expect logistics to work smarter, not harder
When the world is hit hard, logistics gets smarter. In 2022, you can expect autonomous package processing from 3PL providers to help shippers accurately choose right-size packaging for their products. Algorithms from 3PLs let businesses quote shipping prices more accurately. These innovations are particularly useful to businesses with growing e-commerce shipping and activity.
See what technology is out there
Ask your 3PL experts how TMS technology can bring efficiency and cost-savings to your business. You'll avoid dimensional weight issues and minimize guesswork. You can't always get rid of shipping surcharges, but you can help control them.
Trend 4: Peak season to start earlier than ever
Consumers are shopping earlier
Remember when you had months to recuperate after peak season? You can kiss that goodbye. Thanks to a tumultuous supply chain and all sorts of shortages, you're smart to begin preparing for 2022 peak, well, now. Consumer spending will continue to rise in 2022, even with higher price tags on most products. And the trend of holiday shopping in July will only get stronger.
Plan sooner for peak season
Reevaluate your peak shipping prep calendar for 2022. Start now to review parcel shipping services. Contract with parcel carriers and work out the details of your shipping expectations and contract pricing. Your 3PL can help you create a shipping strategy, forecast peak pricing and plan for capacity issues.
If you’re planning on a busier season than usual, it could be a good time to consider scaling from parcel shipping to LTL shipping.
Trend 5: Year-round reverse logistics
Increases in consumer and B2B returns
You thought returns were a problem before the pandemic? In 2021, shoppers were expected to return 30 to 40 percent of their online purchases. That trend isn't expected to slow down in 2022. If you sell to big box retailers or other resellers, you'll likely see returns making their way back to you in their reverse logistics process. And in your B2B transactions, you may receive items returned for repair or refurbishing.
Create a reverse logistics strategy
Your 3PL expert can help identify the lifecycle of your product and determine its value at each transaction. Dig into the four Rs of reverse logistics and see how to get the most out of your product. You can potentially squeeze more money out of a product than you might realize.
2022: Your year to shine in parcel shipping
So, how long will these supply chain issues last? Of course, no one knows for sure. But there's no point waiting for it to get better. Innovation is often the result of catastrophes. It's time to adapt your business to the new normal, and a 3PL can help you navigate the process. Stick with Worldwide Express, and we'll help you make the most of a tough situation.
Request a consultation and learn how we can help shape your logistics in 2022.