Last year was a terrible Christmas for many families in the United States. The majority of those families were those that put off their online holiday shopping until the last minute. UPS and FedEx were the two companies that were in the spotlight last year with an estimated 2 million late packages that did not get delivered on time for Christmas. This was due to both bad weather and the lack of planning and preparation these companies had to perform.
The holiday shopping season in 2013 was a record breaking one with more customers than ever shopping online with Amazon, Target, and Wal-Mart to name a few. However, the shipping companies were not the only ones to blame for the disastrous holiday shipping dilemma. Many of the large online retailers were offering customers expedited shipping and/or guaranteed delivery without actually paying the additional fees to the shipping company for that service. For example, if you ordered a product online and the company promised to deliver in two days that doesn’t necessarily mean that the company paid UPS or FedEx to get the package there by those specific days. Retailers were not expecting to pack and ship the amount of orders they did nor were they expecting bad weather around the country or UPS and FedEx to not have the ability to support the large number of packages going through the system. All of these were issues that lead into packages not being delivered on time.
For the upcoming holiday shopping season in 2015 retailers and logistics companies are altering their plans for the massive amount of expected purchases. Shipped goods are expected to rise as much as 11 percent when compared to last year. So you may ask, what are they doing different from last year to support this growing industry of online shopping? More and more of the big box retailers with online and brick-and-mortar stores and also some of the smaller ones are offering more and more options to place your order online and then pick it up in store a short time later. They are also preparing to ship some orders from store locations instead of from a central warehouse, which could significantly decrease transit time.
UPS and FedEx are hiring about 10 percent more seasonal workers than last year to help process, sort and deliver packages. They are also investing enormous amount of money to more efficiently run their operations such as automated sorting.
With these adjustments in place the online stores and shipping companies are supposed to be a lot more effective at delivering packages on time than they were last year.
If you had a position of authority in one of the big box online retailers such as Amazon, Target or Wal-Mart, how would you improve operations?
For three years I worked in the logistics field in and around Jacksonville, North Carolina. I did logistical planning and execution of aircraft for both passengers and vital air cargo that needed to get transported overseas. I had completed extensive amounts of paperwork that had to get done in the preparation for the movements, particularly inspections of the cargo for banned/hazardous materials. Hazardous material needed to be properly documents, packaged, labeled, and then inspected in order for me to sign off on it, which then held me liable if anything had happened with the cargo on the aircraft.
As part of the cargo, vehicles also needed to get loaded onto cargo aircraft. Vehicles were a challenge because they had to be calculated for center of balance and based on that measurement a load plan would be created for the aircraft. If anyone is not familiar, the center of balance is the point at which a vehicle would remain in equilibrium, or balanced on both sides. This was an important part of loading vehicles – to heavy of an axle towards the front or back of the aircraft and not enough weight on the other side could be disastrous.
In an attempt to cut costs and save time, the management at our office decided to invest in a weigh-in-motion scale. This system was outfitted with four scales and a laser system. When a vehicle was driven over the scales, it would automatically take the weight of each individual axle (similar to a highway truck weigh station) and the lasers would capture the exact dimensions. This information is then transferred to the computer and printed out a center of balance ticket which was used in planning the aircraft configuration.
A very simple process, with one major flaw. The system was a mobile unit on a trailer and had to be packed after every use. Due to this it took a little over an hour (and a small team of people) to set it up and get everything calibrated correctly. There was a team of only three of us that were initially trained and knew how to properly work this system, which is plenty knowing that once it is set up the system is extremely easy to use. What the management did not think of is that we were on a constant rotation cycle, moving from city to city or state to state every couple years. With this high turn-around there was no planned way for anyone to pass on the knowledge about the system and how it works. The system has now been sitting idle for over a year. It is a shame to know that such an expensive, valuable system is not being used because the proper training did not occur to get people up to speed. A good idea on paper, but the needs of the workers at the terminal must be considered.
As management, would be your solution to create a smoother transition into this system?