Locate2u News sits down with e-commerce logistics expert Nick Fanelli for a wide-ranging interview. He speaks about contentious labor employment issues, when not to prioritize orders during Christmas, and how to grow your business through logistics.
Logistics that pay off
“If you want to increase sales and margin, look at your e-commerce logistics function,” says Nick Fanelli. “The best way to understand the importance of e-commerce logistics as a revenue driver is through the customer experience.”
Fanelli recently launched his own consulting business called Shippingwise. The boutique company works with shippers from a small to medium size range. Its primary focus is finding solutions that can help companies improve margins and revenue.
Delivery is the first time a shipper experiences your brand. “It’s critical that it’s a very positive experience. Most importantly, was it delivered on time? A single bad experience means the customer is unlikely to return.”
Another thing to remember is the sale starts even before any item is purchased. “To get a customer to convert, shopping plays a huge obstacle and opportunity,” warns Fanelli.
Hungry customers ready for peak season
Peak season should not be seen in isolation. Fanelli says: “It’s a year-long process. It’s something that starts with forecasting and planning. Understanding the demand expectations and will our supply meet that.”
“Diversifying your supplier base is again really important. One supplier might be dropping the ball in a certain area or region. You want to be able to have other options. You need to have a way and a mechanism to switch volume between suppliers quickly and be able to measure that,” explains Fanelli.
Managing customers’ expectations is tricky, especially given that things are most likely to ‘go wrong’ even if with the best plan and strategy.
“Communicating to customers upfront about any real-time delays is important,” Fanelli says it’s vital to be proactive and not wait for customers to reach out to you about a delay. “Telling them ahead of the estimated delivery date if there’s an issue. And then showing at checkout when a product should arrive, not just saying 3 to 5 business days (but the exact date).”
Not everyone orders for Christmas
Some orders in December should not be considered a priority before the 24th.
“Not every customer needs their product by Christmas,” reminds Fanelli. “Remember, you had your customers before the Christmas season, too. “[It’s important to] understand which customers need it by Christmas and which don’t. This will help you prioritize, and if you need to, spend the extra money to deliver for those customers rather than just assuming everyone needs it for Christmas,” he says.
Looming labor challenges for 2024
Labor reform issues have been thrust into the Australian spotlight this year, with the Closing Loopholes Bill being introduced to parliament recently. This bill aims to give gig workers equal rights to employed workers. Although the intentions seem to be good, to make sure workers are better paid, the business sector is worried. Uber has already indicated increasing prices by 80% to cover these extra costs.
“It’s been a concern for years. It’s been driven not only by the government but also by labor,” Fanelli reckons there won’t be major labor reform changes in 2024 in the US. “But I think from 2025, it will be a concern.”
Two months ago, UPS gave package handlers a salary increase. At that time, FedEx was already struggling to maintain labor levels.
Reducing costs artificially
“These carriers and logistics providers need to reduce cost. They can use things like technology. They need to up delivery density. These companies are very hungry for volume.” Fanelli believes the impact on labor and customers will only get more complicated when it comes to carriers’ costs.
One way to artificially increase delivery density is to “deal with labor shortages,” says Fanelli. He suggests that if UPS reduces the number of days they deliver to rural zip codes, it will bring costs down. “Maybe if they only deliver Monday, Wednesday, and Friday, they consolidate more volume. That’s lower cost for them,” Fanelli says that’s a win-win situation, as it reduces customer costs too.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
