Super-sizing E-commerce Deliveries

Tags: E-commerce, Last Mile Delivery, Supply Chain

Heavy, bulky e-commerce orders serve up delivery challenges that are as oversized as the merchandise being delivered.

When Marcia Turner decided to buy two sofas at Pier 1, she knew she'd have to pay a delivery and set-up fee because she didn't have a vehicle that was large enough to haul the furniture home.

The $169 fee was the same whether she ordered in the store or online, so Turner made the purchase online through Pier 1 affiliate Ebates.com, a third-party cash-back site. The $174 rebate she received made it easier for Turner to accept the steep delivery fee. "I thought the delivery price was high, but I didn't have other options," says the Western New York resident.

Like millions of other consumers, Turner is conditioned to expect "free" shipping when ordering online, regardless of what she purchases. Online shoppers don't always realize that delivering oversized goods such as furniture, appliances, and big screen TVs requires far more expense, effort, skill, and communication than the typical e-commerce order.

"If drivers can't find the front door when delivering a book, they walk around looking for it. Imagine two people doing that while carrying a sofa," says Chris Bell, head of custom supply chain at online home goods retailer Wayfair.

Manufacturers, retailers, and carriers, though, are acutely aware of the many challenges large e-commerce deliveries present, particularly in the last mile. Among the issues:

  • Because of their size, cost, and packaging, deliveries typically can't be left outside.
  • Customers need to be home to accept delivery, so good communication and tracking are essential.
  • Depending on the service level provided, delivery personnel might need to set up and test the items.
  • Delivering oversized items often requires at least two strong people.
  • Because delivery personnel come into homes, they need more than muscles—they must also be personable and have customer service skills.
  • Since oversized goods can't be put on a conveyor in a warehouse, moving them is more labor-intensive than other types of merchandise sold online.
  • Bulky oversized merchandise is more likely to get damaged than other types of e-commerce goods. Inspecting orders before delivery can add to the timeline.
  • Large items take up more space in trucks, so they're more expensive to ship.
  • Returns of oversized items are costly and time-consuming.

In spite of these issues, as consumers continue to feel more comfortable buying large items online, those making, selling, and transporting them are forced to find ways to address the challenges.

After deciding that outsourced fulfillment didn't give it enough control over the process, Wayfair brought it in-house. The Boston-based retailer, which offers more than 10 million products, now uses a network that includes27 of its own last-mile delivery facilities and seven consolidation and crossdock centers.

"Until about four years ago, a third party took the order from the supplier to the customer," says Bell. "Today, we still have hundreds of partners that include truckload and less-than-truckload carriers, but 60 percent of the orders flow through our own middle-mile and final-mile hubs."

Pilot Freight Services, which specializes in home delivery of what it refers to as "H3D" (heavy, hard-to-handle) cargo, knows that its transportation and logistics services are an extension of the retailer's brand. For that reason, Pilot's final-mile delivery services include value-added options that coincide with a brand's consumer promise.

"Some retailers offer various levels of service that consumers can choose from, but it depends on the commodity, its value, and what the retailer wants to provide," says Mark Fierek, Pilot's vice president of e-commerce sales.

One of its service levels lets Pilot do a quality check in the distribution center after receiving furniture from the manufacturer. If there's damage—a chipped corner or broken leg—Pilot gets retailer authorization to use a local furniture technician for the repair before scheduling delivery.

"When our customers use this 'deluxing' service, we see a 98.7-percent stick rate inside customer homes," says Fierek.

SEKO Logistics, a freight forwarder and third-party logistics provider based in Illinois, recently introduced its "Save the Sale" program, which offers an in-home process for addressing potential product problems during delivery.

For example, if SEKO delivers a new smart TV in a carton with a tear, the customer might worry the product is damaged and refuse delivery.

"We have a small window of opportunity to address this so the retailer doesn't lose the sale and the customer is happy," says Brian Bourke, SEKO's vice president of marketing.

The SEKO driver addresses the situation immediately by connecting the consumer with customer service—either SEKO's or the participating retailer's—to explore possible options that will help avoid a return.

"When you ship big and bulky items, returns are incredibly expensive because the retailer can't recover the cost of returning a refused item and shipping another one," explains Bourke. "We're trying to mitigate that loss."

Another challenge with last-mile delivery involves customer communication. It's not just about consumers expecting the ability to track and monitor shipments. The customer also has to be home to allow entry and accept delivery.

"Scheduling is the biggest problem, because the driver has to be at the pickup location at the right time and the consumer needs to be home for that drop-off," says Valerie Metzker, head of business development at Roadie, the first "on-the-way" delivery service.

Roadie lets consumers use a combination of real-time GPS tracking and telephone communication.

"If you're expecting your love seat delivery at 3 p.m. Tuesday, we send text updates," she says. "That means if you're dropping off your dry cleaning and get a text that your delivery will arrive in five minutes, you know to hustle back home. You can't get this down-to-the-minute visibility with a less-than-truckload or parcel carrier."

Is finding drivers who can embrace that level of communication, handle product set-up, and provide acceptable—if not superior—customer service skills another challenge given the truck driver shortage?

One reason for the driver shortage actually works in favor of the final-mile oversized delivery segment, notes Fierek, who has deep experience with this as chairman of the board of the Specialized Furniture Carriers. Millennials, he says, don't want long-distance, over-the-road work so they migrate to final-mile jobs because they can be home every night.

"You can make a decent living in this space," he adds.

In addition, platforms such as uShip, which connect shippers with carriers, allow drivers who prefer to drive regionally to fill their unused capacity with oversized orders.

"Thousands of high-quality owner-operators with small truck fleets operating regionally and nationally can deliver great service from origin to destination," says Mike Williams, CEO of uShip.

Last-mile delivery of oversized goods is evolving as more shoppers like Turner order big and bulky items online and companies gain experience delivering goods in ways that meet consumer expectations for speed, quality, and service. They aren't there yet, though, as 2018 research from uShip shows: More than one in five consumers surveyed have ordered something that arrived damaged and more than one in seven ordered something that was never delivered.

"Oversized deliveries are ripe for disruption," says Bell at Wayfair. "We're using technology, people, and processes to change what normal looks like. We're transforming what used to be a poor experience into one that's not only seamless, but also one that customers would enjoy having again."






Visit Our Sponsors