Quarterly Live Group Demo Watch Now

Sifted logo

What Shippers Need to Know about COVID-19

by | Mar 12, 2020

4 min read

Just declared a pandemic by the World Health Organization, COVID-19 is affecting all of our lives in one way or another, even if we aren’t facing the disease directly — from canceled trips to postponed events to working from home.

Our economy is certainly being affected by the disease, but for companies whose livelihood depends on shipping, the challenges are even more daunting. Now is the time to plan and prepare to protect your business.

 

COVID-19 effects on your carrier contract

The law of supply and demand, as well as common sense about human behavior, suggests that big-box retailers of staple goods and household products will see substantial increases in sales, while smaller, specialty sellers will experience a decrease in orders because they lack the resources of the larger chains to acquire and distribute goods efficiently. As quarantines and seclusion sectors occur, these larger retailers might put even more of their resources behind online sales, enhancing their advantage.

In this situation, the smaller shipper will likely encounter even more of the challenges they already face today in competing with larger-scale companies. Fewer orders will mean fewer shipments and a lower carrier spend, in turn resulting in significant drops in their earned discount or volume incentives with their carrier.

Carriers often call these earned discount tiers your incentive discount tier because they’re designed to encourage you to maintain particular volume levels. We’ve already shared with you that pricing tiers aren’t necessarily the be-all-end-all of your parcel spend, but you can work with your carrier to limit the effects of COVID-19 on your tier status.

 

How to address COVID-19 with your carrier

There are several steps you can take to hold COVID-19 shipping costs down immediately and in the future.

 

  • Contact your carrier now.
    Be proactive and don’t wait for a line of other shippers to form. Get a plan in place to mitigate your risk. The carriers will respond much better before panic rules the day.

 

  • For the remainder of 2020, request that your carrier freeze your earned discount tier to the discount tier that you worked together to target during your recent carrier contract optimizations.
    During this time of economic uncertainty, shippers and carriers will need to work together to endure the complexities linked to COVID-19, but waiting is not to your advantage.
    When you ask for this, expect your carrier rep to push back and tell you not to worry. While panic isn’t necessary, this is an area in which you should hold firm. Insist that they consider locking in your discount for the rest of the year and suspending all possible shipment minimums tied to your discounts so you can have some certainty in your shipping costs. Even a small swing in your discount could blow your budget.

 

  • When the crisis has passed, investigate new pricing structures with your carrier.
    In a perfect world, shippers should look for pricing that eliminates pricing based on committed volume and let a free market prevail based on real-time competitive pricing and exceptional service standards instead. No one likes to be surprised when things go south, but being prepared helps with the anxiety and allows for planning.

 

  • Watch for COVID-19 to become an exception.
    Like natural disasters can cause carrier delays (service failures), COVID-19 could start affecting service levels. Will the carriers consider COVID-19 an allowable exception? It’s unclear at this time. Carriers could also suspend premium services that require drivers to interact with the public in affected areas, like signature-required service or white-glove delivery.There is an opportunity for goodwill to prevail here on both sides, but it will likely be contingent on the carriers’ ability to not act from a position of power as is too often the case in their approach to uncertainty. Watch for service issues carefully by ensuring you’re signed up for alerts via your carrier’s website.

 

Don’t panic — just prepare
The time to pause and contingency plan is now. Notice I didn’t say to put your emergency plan into action. The shipping world is already feeling the impacts of this pandemic — the National Retail Federation said they expected imports to drop 13% at U.S. ports. Spend the time now to imagine the potential impact of COVID-19 on your business and protect your bottom line by making smart decisions about your shipping.

Topics: Carrier Invoice Auditing, Carrier Optimization, Contract Optimization, COVID-19, Service Guarantees
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].