SMB Ecommerce Shippers Diversifying Carrier Services

Considering the critical importance of the back end of ecommerce, more small-to-medium online retailers are using multiple carriers to both ensure optimal pricing and eliminate the risk of keeping all their eggs in one basket, according to a new study from Accenture.

Considering the critical importance of the back end of ecommerce, more small-to-medium online retailers are using multiple carriers to both ensure optimal pricing and eliminate the risk of keeping all their eggs in one basket, according to a new study from Accenture.

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Seventy percent of SMB online sellers said they use more than one parcel provider, and of them 73% said they do so to ensure the best price, while 68% said they do so to mitigate risk. Even when asked to picture a scenario where one provider covered all their service needs, 65% said they would still prefer to work with multiple carriers.

The study polled 1,124 decision makers in operations and fulfillment in 10 countries in North America, Europe, South America and Asia, at companies doing at least 20% of sales online channels and having 500 or fewer employees.

Even if they’re not the sole provider, carriers see significant benefit from being the primary provider, according to Accenture. The survey found that making the jump from the second to top spot increases parcel volume by 64%.

The big three carriers globally – UPS, FedEx and DHL – are used by 71% of the respondents in the U.S., Canada, Germany and France as their primary provider, according to Accenture. “Even where these providers are less dominant, they compete strongly across all business sizes in all but two countries: China and Japan, indicating a very different market in Asia,” the study found.

Also, 70% of ecommerce shippers said they use more than one carrier partner in order to ensure they get the best pricing.

In a nod to major logistics moves by Amazon and Alibaba, the Accenture study found that over one-third (36%) of SMB ecommerce shippers were using marketplaces to manage order fulfillment.

According to the survey, the top features SMB ecommerce shippers look for in parcel carriers were: easy and affordable returns service/solution and full visibility/tracking for all parties (both 79%); excellent reputation for quality service (77%); a convenient delivery window (69%); two-way communication between provider and customer to coordinate delivery (68%); and notification of delivery window on day of delivery (67%).

The growing area of cross-border ecommerce was another area addressed in the survey. While the global market is projected to reach $994 billion by 2020, representing 29% of all B2C ecommerce, according to a 2015 study by Metapack, only 26% of SMB ecommerce sellers said they fill out required customs documentation online for customers.

Increasingly, they seem to be looking to their carrier partners to do this for them. Three-quarters of respondents said “determining and completing the right customs forms” was among the most important criteria when evaluating a delivery provider.

The report cited recent acquisitions by UPS (i-parcel) and FedEx (Bongo) as evidence of the need to address cross-border service demands.

“Tailoring services has become critical for global e-tailers to successfully take advantage of these new market opportunities,” the report stated. “Providers that ensure seamless, simplified and reliable international delivery services will quickly become the primary and preferred provider that e-tailers seek.”

Mike O’Brien is Senior Editor of Multichannel Merchant

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