Quarterly Live Group Demo Watch Now

Sifted logo

COVID-19: What Food and Beverage Shippers Should Watch For

by | Apr 14, 2020

5 min read

As COVID-19 reshapes the eCommerce landscape, food and beverage companies are seeing a unique set of opportunities and challenges when it comes to shipping.

The food and beverage sector was already expecting a 23.4% eCommerce boost for the year thanks to the rising interest in online ordering, but the COVID-19 crisis is driving grocery sales even higher with a 210% increase in the dollar value of consumers’ orders, according to PYMNTS.com.

Companies like meal kit subscription services and specialty food retailers are also experiencing a bump at the moment, as consumers look for new ways to prepare and enjoy food at home without having to visit a physical store.

If your company is part of this boom, there are several factors to be aware of when it comes to your customer experience and your shipping.  It’s time to ask questions like:

1. What’s in my carrier contract?
First, understand what your shipping characteristics and volumes used to look like and how they interacted with your carrier contract. For instance, were you getting a big discount on commercial shipping rates because you primarily shipped to business addresses? That might be irrelevant now that so many businesses are shut down and employees are working from home. Many traditional B2B shippers are now experiencing huge increases in the cost of their shipping due to the increased frequency of residential and delivery area surcharges. Add in the push toward two-day fulfillment over the last couple of years, and many businesses simply don’t have competitive ground residential rates in their contracts with the major carriers. Some are seeing shipping cost increases of 20-30% because their contracts aren’t optimized for how they need to deliver to their customers now.

2. What needs to change?
A major aspect of loss prevention for eCommerce food and beverage companies is spoilage and breakage, so you were likely reliant on your carrier’s network running smoothly and efficiently. As we have heard from the carriers, COVID-19 has eliminated those standards and the carriers have suspended their service guarantees. Late packages for meal kit subscription services is as much about missing consumer expectations as it is about actual spoilage. You might see a tidbit back from the carrier refunding the cost of shipping and reimbursing the cost of the good, but what will it take to win that consumer back? Ensuring that customers receive safe, intact delivery is a linchpin of your business, so it falls to you to reach out to your carrier and use any leverage you have to get them to get your deliveries through on time. One bit of sway you might have is increased volume. If your sales are rising, use this as a point of optimization with your carrier. They want to keep you as a customer even when this crisis has passed, so start talking about a better pricing tier and expedited service.

Look at your orders for clues to how your customers’ tastes and expectations have changed. Are you shipping larger packages now? Are they going to primarily residential areas and incurring related surcharges? What shipping speeds do customers expect? If your goods aren’t perishable, are you able to encourage them to select slower, less costly shipping speeds?

The key to your conversation with the carrier rep is to focus on service levels and consumer experience pitfall concerns. Emphasize that, because that we indeed live in an age of uncertainty and consumer needs and habits will continue to evolve, you want to stay in close contact and keep a positive working relationship with your rep. A little goodwill goes a long way.

3. What fulfillment options do I have?
As Amazon tries to balance consumer demand for certain products with the scope of its fulfillment network, some online retailers are competing for consumers’ attention by optimizing their own product lines to make direct to consumer shipping more affordable. Others are relying on their physical stores as distribution points if they are not halted by stay-at-home orders. Food and beverage companies of all kinds are pivoting their business models quickly in response, so examine your own options. Can you work with your carrier to create contract terms that allow you to profitably ship directly to consumers?

4. How can I maintain customer experience?
The key here is communication, of course. When you let your customers know what will happen with their order before, during and after the transaction, you create transparency that builds a strong relationship. Yes, they want what they ordered quickly, but most are aware of the incredible impact this crisis has had on American commerce and logistics. If you are clear with customers about what to expect, they’ll be more understanding if they have to wait.

Your shipping action item checklist

As always, plan — don’t panic! Take these steps to keep your shipping on track.

1. Examine your shipping data to understand where you were, where you are now and what’s changed. You should be starting to see trends in your carrier invoices that reflect the changes to your volume, shipment characteristics and surcharges.

2. Get in contact with your carrier and optimize contract changes that reflect these trends. Many shippers we work with are having success in securing faster shipping and discounts when they approach their carrier rep with data in hand and a cooperative attitude.

3. Examine your fulfillment network and optimize for your new normal. Some shippers have even shifted to LTL services to move shipments quickly rather than rely on their traditional shipping methods.

If you’re a shipper, we understand how overwhelming this all is. Trust us — we feel it too. We’ve just released a new eBook that helps you understand and combat some of the new surcharges you might be experiencing — take a look!

Topics: Customer Experience, Distribution Network, Food & Beverage Shipping, Surcharges
Topics

Check out related resources at Sifted.

Parcel Carrier Diversification 101

Parcel Carrier Diversification 101

Last mile delivery has never been more important to businesses. In 2023, the global last mile delivery market was ...
Read More
RILA LINK 2024 Recap: The Cutting-Edge of Retail Supply Chains

RILA LINK 2024 Recap: The Cutting-Edge of Retail Supply Chains

At the end of February, supply chain leaders from the nation’s largest retailers converged in Dallas for the ...
Read More
Sifted’s Caleb Nelson Named 2024 “Pros to Know” Award Recipient

Sifted’s Caleb Nelson Named 2024 “Pros to Know” Award Recipient

KANSAS CITY, Missouri - Sifted, the trailblazer in Logistics Intelligence™ is proud to announce that Caleb Nelson, ...
Read More
Meet Sifted at LINK 2024

Meet Sifted at LINK 2024

At the end of February, the top supply chain leaders from some of the nation’s largest retailers will converge in ...
Read More
Parcel Carrier Comparison Guide

Parcel Carrier Comparison Guide

In the intricate landscape of parcel shipping today, shippers navigate a complex web of carriers, each with its ...
Read More
Amazon Shipping, Seller Fulfilled Prime, and More: Matt Snyder’s Insights and Advice to Sellers in 2024

Amazon Shipping, Seller Fulfilled Prime, and More: Matt Snyder’s Insights and Advice to Sellers in 2024

Amazon took the supply chain world by storm in 2023. They announced Amazon Shipping, a FedEx and UPS competitor ...
Read More
2024 Shipping Industry Outlook: Top Trends Driving Down Costs + How to Capitalize

2024 Shipping Industry Outlook: Top Trends Driving Down Costs + How to Capitalize

Over the last few years, soaring shipping costs, unpredictable rate hikes, and a challenging logistical landscape ...
Read More
Sifted Celebrates Achievement as 2023 Top Tech Startup by Food Logistics, Supply & Demand Chain Executive

Sifted Celebrates Achievement as 2023 Top Tech Startup by Food Logistics, Supply & Demand Chain Executive

Kansas City, Mo – Sifted, a leader in Logistics Intelligence, has been recognized as a 2023 Top Tech Startup by ...
Read More
11/27/23 Parcel News Update

11/27/23 Parcel News Update

1. Amazon’s Volumes Surpass FedEx and UPS Amazon delivered more parcels in 2022 than UPS, according to internal ...
Read More
11/20/23 Parcel News Update

11/20/23 Parcel News Update

1. USPS Announces Tentative Rate Increases for 2024 The United States Postal Service has announced rate increases ...
Read More
11/13/23 Parcel News Update

11/13/23 Parcel News Update

1. Experts Share Attention-Grabbing Items from 2024 GRIs Supply Chain Dive interviewed industry experts, including ...
Read More
2023 Holiday Shipping Deadlines

2023 Holiday Shipping Deadlines

It’s the most wonderful time of the year? It will be if your customers receive their orders on time. The major ...
Read More

How Sifted Works

Connect to
your account

Sync
your data

Power your
dashboards

Get Your Logistics
Intelligence Demo

Strategic ways to prevent loss down the line

Services you could be utilizing right now for savings

Ways to cut material costs without cutting quality

Are you an FBM (fulfillment by merchant) Amazon seller?

Check out our Marketplace Intelligence solutions to protect your bottom line.

Shipping Insights & Alerts
Get updates and track the things impacting your business most

Decision Support
See how supply chain adjustments pay off before you pay out

Carrier Management
Streamline how you manage your carrier operations and contracts

Business Automation
Let software do what it does better than people can

Seller Insights
Measure and monitor with confidence.

Sales Visualization
Shed new light on your sales data.

Fee Analyzer
Understand the impact of ever-changing FBA fees.

FBA Audit & Recovery
Secure money you’re owed from Amazon.

Blog
Discover news, tips, and industry best practices

DIM Weight Calculator
See how DIM is impacting you

Podcast
Hear from industry experts on LeaderShipping

Case Studies
Learn how other brands use
Logistics Intelligence

Carbon Calculator
Calculate your CO2 Emissions

Thought Leaders
Meet the people behind the technology

Guides
Download free reports and expert how-tos

Demo
Get a personalized tour of our software

About Sifted
Get to know Logistics Intelligence

Logistics Intelligence
For parcel shippers

Marketplace Intelligence
For Amazon FBA sellers

Let's get you to the right place!

SIFTED DASHBOARDS
For parcel shippers

AMAZON Marketplace Intelligence

Not sure if you have an account? Email [email protected].