What Increased Ecommerce Fulfillment Volumes and More COVID-19 Risk Means for Your Business

You can’t watch the news without hearing of record-breaking increases in coronavirus cases, hospitalizations, and deaths. In some states and counties, government officials have halted re-opening efforts and warn of additional closures if the spread continues. While supply chain and logistics providers fall into the “essential” services function, what would a second wave mean to your 3PL warehouse? And, have you prepared for the implications that additional closures or delays in re-opening might have for your business?

As we reflect back on earlier this year when stay-at-home orders first emerged, Extensiv saw dramatic increases in order volumes from third-party logistics (3PL) warehouses using our Extensiv 3PL Warehouse Manager WMS, with some 3PLs increasing their order volume in excess of 5x. On average, 3PLs saw more than 81% growth year-over-year in ecommerce order volumes. Will this ecommerce volume continue at this level or could we face even higher numbers as the year continues?

As summer continues and coronavirus cases increase, we’ve seen 3PLs double down on two key strategies: harnessing the opportunity of ecommerce fulfillment and protecting their workforce.

Harnessing the Ecommerce Fulfillment Opportunity

While many companies saw the first round of stay-at-home orders negatively impact their business, many 3PLs used it as an opportunity to harness the increasing adoption of ecommerce and to provide services to retailers and manufacturers that lacked online fulfillment support. Many 3PL warehouses were forced to take a hard look at diversifying their fulfillment strategies to expand into ecommerce or omnichannel fulfillment and build scalability nearly overnight.

As we shared in our Special Edition: Ecommerce State of the Third-Party Logistics Industry report, consumer buying patterns rapidly shifted towards ecommerce in Q2, driving many unprepared retailers to close stores and in some cases declare bankruptcy. In fact, COVID-19 dealt a blow to brand loyalty, with 44% of U.S. shoppers having tried at least one new brand during the pandemic because their standard brand was either unavailable or took too long to deliver. This served as an opportunity for smaller businesses to step in where some of the larger retailers failed.

While some 3PLs have already adjusted their models to address higher volumes, others continue to evaluate how they can excel amidst a second wave of closures, potential labor shortages, and higher demand. Savvy 3PL warehouses continue to evaluate their strategies and ask themselves the following:

1. Can you use this time to acquire new ecommerce customers? With so many store-front only shops suffering, 3PLs can reach into their local communities and into the broader retail landscape by offering a much-needed path to fulfilling online ecommerce orders. This is the definition of win-win. You can grow your business while helping another business save their customer base and survive in a challenging time.
2. Are there ways you can reconfigure warehouse space and optimize workflows to handle more volume and throughput? Configure your 3PL warehouse for FAST principles: Flow, Accessibility, Space, and Throughput. With little time to expand facilities and limited empty warehouse space, optimizing can allow for expansion and onboarding of new customers even in an already busy warehouse.
3. Can automation software and technology enable you to create a paperless warehouse environment and scale your business? During the past three months, manual processes have stretched to their limits addressing increasing fulfillment volumes. If you haven’t implemented a warehouse management system (WMS), now is the time. By implementing WMS software, you can not only eliminate the passing of paper from person to person (a health risk), but you can also drive better accuracy and visibility in the pick, pack, and ship processes.
4. What software integrations do you need between your WMS system and key marketplaces or ecommerce shopping carts? With the second wave sure to continue the surge of ecommerce ordering, consider what systems you need to integrate with your WMS software to gain additional access points for receiving orders from end consumers and sharing real-time inventory availability or order status information. Shopping carts and marketplaces are often the main interface an end user interacts with. Any order status information that you want the end consumer to know about needs to begin and end with the shopping cart. This means that available products, product details, delivery statuses, tracking information, and other updates need to flow seamlessly between your WMS software and that shopping cart.
5. What will you do if a large number of employees call out sick? While many of these questions focus on harnessing opportunity, you also need to plan for the worst. If you have a large number of employees call out sick, consider how easy using your WMS automation and process flows are for new or temporary users. Identify what tasks can quickly be trained and what activities have automated guidance to support your new or temp staff. Ensure that you use tools like mobile barcode scanning that provide accuracy and make the it nearly impossible to complete a mispick or send orders out incomplete.

Ask yourself these questions to understand if you have truly prepared and thought through how to support and grow your business during the next wave of COVID-19. When you’ve considered these questions, ask yourself whether you have the right protections in place to prevent business interruptions and to ensure the health and wellbeing of your team. Check back later this week to hear the best practices our Customer Advisory Board shared about protecting the health and safety of 3PL warehouse workers.

To learn more about our WMS, Extensiv 3PL Warehouse Manager, and how it can help your 3PL warehouse scale to meet increased ecommerce fulfillment demand, Partner with Extensiv and Quickly Transform Your Business