In part one of our guide to managing the impacts of Amazon Prime Day, Extensiv explored how Amazon Prime Day offers unique challenges to 3PL warehouses. While offering excellent opportunities to draw in new business and grow revenue, it has also brought operational challenges such as the ability to handle higher order volume, impacts to the global supply chain, and the demand for meeting delivery expectations for 3PL customers.
Finding the right technology partners to help address these ever-evolving logistics challenges can oftentimes determine the success of one 3PL over another.
Here are a few more impacts on how Prime Day and peak seasons are affecting 3PLs and their operations.
The Impact on the Costs and Availability of Delivery Partners
The sheer volume of Prime Day always has a massive impact on the cost and availability of delivery providers, as well. According to SupplyChain Drive, “For big sale days — like Prime Day — Amazon needs more truckers, and as the demand for truckers rises, rates increase.”1
Indeed, according to CNBC’s Jim Cramer, two of the biggest winners from the initial Prime Days were FedEx and UPS.2
Joshua Main, from the freight matching company Truckstop, confirms this, saying “because Amazon needs expedited loads to keep its fulfillment centers stocked, rates will definitely go up (even after Prime Day) and other companies may have to delay shipments if they lose too many 3PLs to Amazon.”
3PLs faced with this situation should do their best to ensure Prime Members are kept abreast of any delays. As Dan Clark noted, “Retailers should know where goods are at all times and when to expect their arrival. If a delay is going to happen, the customer can be alerted, which improves satisfaction.”3
To address this concern, Extensiv 3PL Warehouse Manager provides customer notifications and updates about customers’ orders, items shipped, and track shipments via email. They can also view these updates and manage billing, reports, and orders through their own customer portal.
The Impact on Ecommerce Customers
The overwhelming success of Amazon Prime Day has not escaped the notice of its competitors. Within one year, Walmart announced its own version of Prime Day. And they were soon followed by other major retailers, who hold concurrent Black Friday in July sales. These include Macy’s, Kohl’s, Best Buy, Nordstrom and Dell. To compete with Prime, many of these sales include free shipping.4
3PLs should expect that many of their other customers will follow suit. According to Techcrunch, 250 retailers will compete directly with Amazon on Prime Day in 2019, up from 194 in 2018.5 Almost every ecommerce retailer 3PLs serve these days is probably either participating – or strongly considering doing so. This is why 3PLs need to adapt new technology tools like integration with Amazon and other online marketplaces as well as best practice workflows to support customers in this growing market need.
Extensiv 3PL Warehouse Manager directly connects to 3PL customers’ Amazon accounts for Prime Day (even regular Amazon Prime orders) to be fulfilled by the warehouse. Orders will then be specially marked as “Prime Orders” so that warehouse staff can prioritize these orders while picking, packing and shipping. This helps 3PLs manage and prioritize orders during Prime Day, other peak seasons and beyond.
How Your 3PL Can Prepare
3PL’s Peak Season is no longer limited to the traditional holiday season rush. In fact, the continued expansion of ecommerce has had the effect of producing multiple short-term and intense peak seasons throughout the course of the year. These can include huge surges around Valentine’s Day, Mother’s Day, and the Back-to-School season.
The bottom line is that there is simply not much of an off-season for today’s 3PLs. They must be ready to perform at their best all year long – while still maintaining their profitability. This is why we have created the 2020 State of the Third-Party Logistics Industry Report.
Filled with insights, tips, and industry best practices, our offering will provide the guidance you need to ensure your 3PL is ready to handle year-long peak seasons productively, and gain more profit. To pre-order your copy, click here for the 2020 State of the Third-Party Logistics Industry Report.