Navigating eCommerce Shipping Delays: Challenges and Solutions in the Post-COVID Era

Introduction: The Shifting Landscape of eCommerce and International Freight

The global pandemic has dramatically reshaped the eCommerce and international shipping landscape, presenting both opportunities and challenges for small and medium-sized businesses (SMBs). As a digital logistics platform, we at FreightAmigo have observed firsthand the seismic shifts in the industry. To gain deeper insights into how these changes are affecting our clients, we conducted extensive surveys and interviews with over 1,800 importers and exporters from December 2020 through June 2021.

The results paint a vivid picture of the current state of eCommerce and ocean freight, highlighting the main obstacles facing businesses today. In this comprehensive article, we'll delve into the key findings of our research, exploring the impact of supply chain disruptions, escalating freight costs, and unpredictable transit times. Moreover, we'll share valuable strategies that SMBs are employing to navigate these challenges and offer actionable advice to help your business thrive in this new environment.

Let's examine some compelling data that underscores the magnitude of the changes we're witnessing:

• eCommerce penetration in the US surged by 49% from May to July 2020 (Federal Reserve Bank of St. Louis).
• The number of new small businesses opened in 2020 increased by 83% (US Census Bureau).
• 60% of survey respondents source their products overseas and rely on international freight for shipping.
• 94% of SMB importers and exporters reported facing supply chain challenges in the past year.

As we navigate this new reality together, FreightAmigo is committed to providing the digital logistics solutions and insights you need to adapt, overcome, and succeed in the face of these unprecedented challenges.

The Perfect Storm: Supply Chain Disruptions and Their Impact

The COVID-19 pandemic set off a chain reaction of events that have reshaped the global supply chain landscape. Initially, the world economy came to a near standstill as China, the world's manufacturing hub, shut down factories and ports. However, as China began to reopen in the summer of 2020, a new challenge emerged: a massive shift towards online shopping, triggering an early and seemingly endless peak season.

This surge in demand for ocean imports, combined with ongoing pandemic-related disruptions, created a severe capacity crunch in the shipping industry. The repercussions of this perfect storm have been felt across the board, with 94% of our survey respondents reporting significant challenges in their supply chains.

Key Challenges Faced by SMBs:

1. Skyrocketing Costs: The most prevalent issue reported by our respondents was the dramatic increase in freight costs. Ocean freight rates have more than tripled over the past year, putting immense pressure on SMBs' margins.
2. Shipping Delays: 53% of respondents cited extended delivery times as a major concern. Factory-to-door delivery times have nearly doubled on major Asian to US lanes, with ships often waiting in long queues to unload cargo at ports.
3. Customs and Tariff Issues: Many businesses reported difficulties navigating the complex and ever-changing landscape of international trade regulations and tariffs.
4. Inventory Management: The unpredictability of shipping times and costs has made effective inventory management a significant challenge for many SMBs.

To illustrate the magnitude of these challenges, let's look at how businesses have been forced to adapt:

• In January 2021, 34% of respondents reported raising product prices, while 26% had to reduce their margins.
• By June 2021, these numbers had increased significantly, with 46% raising prices and 32% reducing margins.

As your trusted digital logistics partner, FreightAmigo understands the gravity of these challenges. Our digital platform is designed to help you navigate these turbulent waters by providing real-time visibility, competitive quotes, and innovative solutions to optimize your supply chain.

The New Normal: Adapting to Higher Rates and Unreliable Transit Times

The Era of Unprecedented Freight Rates

One of the most significant impacts of the current market conditions has been the astronomical rise in freight rates. Over half of our survey respondents who experienced supply chain disruptions cited higher costs as the most impactful factor on their business.

The traditional peak season cycles have been disrupted since the onset of the pandemic, replaced by a continuous upward trend in rates. Moreover, securing space on vessels often requires paying premiums on top of these already elevated rates. This situation has pushed some importers and exporters to consider air cargo as an alternative, but even this mode has seen significant price increases, with air freight rates jumping by 50% between February and April 2021 alone.

The Challenge of Unreliable Transit Times

While rising costs are a major concern, the unpredictability of transit times is equally problematic for many businesses. Our research shows that 53% of respondents have been significantly affected by extended delivery times. The impact is substantial:

• Factory-to-door delivery times have nearly doubled on major Asian to US lanes.
• Numerous ships are facing long wait times at ports before they can unload cargo.
• Equipment shortages, particularly containers, have further complicated the loading and unloading process.

These challenges have forced importers and exporters to adopt new strategies, such as splitting shipments and changing ports to mitigate risks. For instance, while 60% of searches on freight booking platforms for US-bound shipments were for the popular West Coast ports in Los Angeles and Long Beach from April through November 2020, this figure dropped to 48% by January 2021 as businesses sought alternative routes.

The Rise of LCL Shipping

In response to the volatile market conditions, many SMBs are turning to Less than Container Load (LCL) shipping as a flexible alternative. Our survey revealed that 69% of respondents use LCL shipping, with 47% of those using it as their primary mode of transport.

The increasing popularity of LCL shipping is driven by several factors:

• It offers more flexibility for smaller volume shippers, which is particularly valuable in the current unpredictable market.
• It allows businesses to maintain inventory levels without over-purchasing in bulk.
• It can be a more cost-effective option when FCL rates are prohibitively high.

At FreightAmigo, we recognize the growing importance of LCL shipping and have enhanced our digital platform to provide competitive LCL quotes and seamless booking processes, helping you adapt to this evolving trend in the industry.

Strategies for Success: Navigating the New eCommerce Shipping Landscape

As we continue to adapt to the new normal in eCommerce shipping, it's crucial for SMBs to develop strategies that can help mitigate the impacts of delays, high costs, and unpredictable transit times. Based on our research and industry insights, we've compiled a set of actionable strategies to help your business navigate these challenges effectively.

1. Diversify Your Shipping Options

One of the most effective ways to hedge against delays and high costs is to diversify your shipping modes and lanes. Consider the following approaches:

• Compare quotes on less congested lanes to potentially find more favorable rates and transit times.
• Explore air freight options for smaller, lighter shipments that require faster delivery.
• Utilize a mix of FCL and LCL shipping based on your inventory needs and market conditions.

By diversifying your shipping strategy, you can ensure that even if some shipments face delays or increased costs, others may arrive on time and within budget.

2. Adjust Your Pricing and Margins Strategy

Given the significant increase in shipping costs, it's crucial to reassess your pricing strategy and profit margins. Consider the following steps:

• Regularly review and adjust your product prices to reflect the current shipping costs.
• Analyze your profit margins and identify areas where you can potentially make adjustments without compromising your business's viability.
• Communicate transparently with your customers about the reasons for any price increases, emphasizing the global nature of the shipping challenges.

3. Optimize Your Inventory Management

With unpredictable transit times and potential delays, effective inventory management is more critical than ever. Consider these strategies:

• Implement a robust inventory management system that provides real-time visibility into your stock levels.
• Adjust your reorder points and safety stock levels to account for longer and more variable lead times.
• Consider using a just-in-time inventory approach for fast-moving items and a safety stock approach for critical or slower-moving items.

4. Leverage Digital Logistics Solutions

In today's rapidly evolving shipping landscape, leveraging digital logistics solutions like FreightAmigo can provide significant advantages:

• Gain access to real-time freight quotes from multiple carriers, allowing you to compare rates and transit times easily.
• Utilize advanced tracking features to monitor your shipments and proactively address any potential delays.
• Streamline your customs clearance process with digital documentation and expert support.
• Take advantage of data analytics to identify trends and optimize your shipping strategies over time.

5. Plan for the Long-Term While Remaining Agile

While it's important to have a long-term strategy, the current market conditions require a high degree of agility. Here's how you can balance both:

• Develop contingency plans for various scenarios, such as extended delays or sudden cost increases.
• Stay informed about industry trends and geopolitical factors that may impact shipping routes and costs.
• Build strong relationships with multiple logistics providers to ensure you have options when faced with challenges.
• Regularly review and adjust your shipping strategies based on performance data and market conditions.

By implementing these strategies and leveraging digital logistics solutions like FreightAmigo, your business can better navigate the complexities of eCommerce shipping in the post-COVID era. Our platform is designed to provide you with the tools and insights you need to make informed decisions, optimize your supply chain, and ultimately, drive your business forward despite the challenges in the current shipping landscape.

Conclusion: Embracing the Future of eCommerce Shipping

As we've explored throughout this article, the eCommerce shipping landscape has undergone significant transformations in the wake of the COVID-19 pandemic. SMBs face unprecedented challenges, from skyrocketing freight costs and unreliable transit times to complex supply chain disruptions. However, with these challenges come opportunities for innovation and growth.

The businesses that will thrive in this new environment are those that can adapt quickly, leverage technology, and implement strategic solutions to mitigate risks. As your digital logistics partner, FreightAmigo is committed to providing the tools, insights, and support you need to navigate these turbulent waters successfully.

Our digital platform offers a comprehensive suite of solutions designed to address the key challenges faced by SMBs in today's shipping landscape:

• Real-time freight quote comparisons for various shipping modes, including LCL options
• Advanced shipment tracking capabilities
• Streamlined customs clearance and documentation processes
• 24/7 expert support to help you navigate complex shipping scenarios
• Data-driven insights to optimize your shipping strategies

By embracing digital logistics solutions and implementing the strategies we've discussed, your business can not only overcome the current challenges but also position itself for long-term success in the evolving world of eCommerce shipping.

As we look to the future, one thing is certain: the global shipping industry will continue to evolve, and businesses must remain agile and informed to stay ahead. At FreightAmigo, we're committed to staying at the forefront of these changes, continuously enhancing our digital platform to meet your evolving needs.

Together, we can transform the way you experience logistics, ensuring a hassle-free and enjoyable shipping experience even in the face of global challenges. Let's embrace the future of eCommerce shipping and pave the way for your business's growth and success in this new era.