How Ware2Go Delivered 12,000 Backlogged Orders in Time for the Holidays

Topic At-a-Glance

• The 2020 ecommerce boom created an excess of 7 million packages per day that final mile carriers didn’t have the capacity to deliver.
• An ecommerce aggregator was limited to two truckloads of pickups per day at their single distribution center. by their carrier and eventually built up a backlog of 12,000 orders that were ready to be shipped. 
• Ware2Go distributed the merchant’s inventory among 3 distribution centers, giving the merchant additional pickups at each location.
• In only 2 weeks, Ware2Go processed and shipped the merchant’s 12,000 backlogged holiday orders in time for the holidays

The 2020 holiday shopping season was the first peak season merchants had to navigate after the ecommerce boom. Many had pivoted their businesses that year to support direct to consumer (D2C) sales. In fact, 35% of merchants reported that they opened an online store for the first time in 2020. 

While merchants were learning new digital sales channels and pivoting their fulfillment operations to support ecommerce shipping, major carriers were scaling up quickly by hiring additional labor and no final mile carriers had the infrastructure to support the 10 years of ecommerce growth that happened in a matter of months leading up to peak season.

In order to ensure on-time delivery performance, carriers had no choice but to enforce shipping limits on high-volume shippers like ecommerce merchants. This meant that no matter how quickly merchants were able to fulfill their holiday orders, they were limited in the number of orders they could actually ship each day. This made it difficult for merchants to forecast or set proper order deadlines to ensure shoppers received their gifts in time for the holidays. In fact, Ware2Go’s 2021 merchant survey revealed that 17% of merchants missed their holiday delivery deadlines in 2020 due to these carrier caps. 

In the middle of the 2020 peak season, a large ecommerce aggregator came to Ware2Go when they saw that their holiday sales had surpassed their forecasted order volume. With only a few short weeks left in peak season, they had a backlog of 12,000 orders fulfilled and ready to be picked up. that their customers were expecting to receive before Christmas.

Although their fulfillment center was able to pick and pack orders quickly enough to keep up with the sudden spike in demand, they were limited by the 2 pickups per day they were allowed at their Atlanta distribution center. They were only able to ship 1,700 orders per day no matter how quickly they fulfilled them. The cutoff date to get orders out the door in time for Christmas was December 18th, and was rapidly approaching.

Why Is Delivery So Important During the Holidays?

The holiday shopping season is  a great opportunity for brands to interact with and acquire new customers. According to a study by Facebook, of the consumers who discovered a new brand on social media last year, 45% made the discovery when searching for a gift for someone.

Giving new customers a frictionless delivery experience can help turn first time shoppers into lifelong customers. In fact, our consumer survey data showed that 79% of consumers are more likely to make a repeat purchase after a fast shipping experience.
With the rising cost of pay per click (PPC) advertising and limitations to audience targeting stemming from Apple’s privacy updates, merchants should be looking carefully at their customer acquisition costs (CAC). It’s no secret that retaining an existing customer is less expensive than acquiring a new one, so merchants would be wise to wow their new holiday customers with speedy delivery at a time when many of their competitors will be struggling to keep up with peak season demand.

Distributing Inventory for More Pickups

The major limiting factor for the ecommerce aggregator with the backlog of 12,000 orders was that they were fulfilling all of their orders from a single fulfillment center. Carrier pickup caps are generally set per location, so if they distributed their inventory they would be able to gain additional pickups at each additional location. This particular merchant had most of their order volume distributed on the East Coast, so they needed to dilute their inventory along the East coast to stay as close as possible to their end customers to keep their final mile time in transit (TNT) low.

Ware2Go had multiple high-capacity east coast distribution centers, and on December 1 they began to pick up the merchant’s backlogged orders and distribute them between two additional east coast distribution centers. 

In just 2 short weeks Ware2Go moved over 20 truckloads of inventory to the new distribution centers, processed, and delivered their 12,000 backlogged orders. UPS picked up 5 full truck loads a day for  the next 2 weeks, enabling the merchant to keep their promise to their customers and get orders in the hands of gift-givers in time for the holidays.

2021 Peak Shipping Season

This year, carriers are more prepared than last. However, even with increased seasonal hiring across the industry, carrier networks will be an estimated 5 million packages over capacity per day. According to our merchant survey, 17% of merchants missed holiday delivery promises last year due to carrier pickup limits, and 23% are concerned that they will not be able to meet consumer shipping expectations this year.

Carriers will undoubtedly have to enforce pickup limits this year to ensure on-time delivery. If your business is looking for a solution to get ahead of this year’s carrier caps with distributed warehousing, reach out to one of our fulfillment experts today.