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PARCELindustry.com
EDITOR’S NOTE
KEEPING UP WITH THE CHANGES
By Amanda Armendariz
Our industry is a constantly shifting one, and it’s important to stay apprised of all the changes headed towards us. While this seems like a daunting task, it is a crucial one in order to stay ahead of the competition. From increased tariffs to moving sustainability targets, from shifting customer expectations to major
changes happening at the United States Postal Service, there is a lot going on right now, and it doesn’t seem to be easing up anytime soon. But no matter how volatile our industry may be, customers still expect their orders to be delivered quickly, correctly, and at a reasonable cost.
Up for the task? We certainly are. As is the case with most any industry, networking and education is key to succeeding. So, within these pages, we’ve tried to hit the highlights of the major issues facing parcel shippers today. We are lucky to have so many knowledgeable experts as our writers, and grateful that they’re eager to share their insights with our readers. Our ultimate goal is to be viewed as the premier industry resource for the small-package industry, so if there is anything that you think we should be covering but currently aren’t, I’d love to hear from you. Additionally, I’ll be at the National Postal Forum this year, so if any of you are attending, I’d love to chat with you and see what we are doing well and what we could be doing better.
As always, thanks for staying connected with PARCEL.
EDITOR’S PICK
Here are some of the most-read articles on our site in recent weeks. If you haven’t already checked them out, you might want to — there is some great information in there!
After Louis DeJoy, What Happens Next?
By Leo Raymond
How Can Packaging Manufacturers Achieve Net-Zero Goals in 2025?
By Emily Newton
UPS 2025 Fee Overhaul: Key Changes Every Shipper Should Prepare For By
Thomas Andersen
PARCEL COUNSEL
FORCE MAJEURE: A FIRST LOOK
Andrew M. Danas
Unexpected events can disrupt business relationships. A pandemic causes supply chain congestion. A warehouse is destroyed by fire. A bridge collapses. Rebel fighters close the Suez Canal. Tariffs are suddenly imposed. Unexpected events can often constitute a “force majeure,” which the law defines as “an event that can be neither anticipated nor controlled.”
In a contract, a force majeure clause is “a contractual provision allocating the risk if performance becomes impossible or impractical, especially if a result of an event or effect that the parties could not have anticipated or controlled.” There will be a force majeure rule in almost every purchasing, selling, and transportation transaction involving a parcel shipper.
In the context of buying or selling goods, both the Uniform Commercial Code (UCC) and the Convention on Contracts for the International Sale of Goods (CISG) have rules governing force majeure. One of these will usually apply in the absence of a written contract.
For transportation services, force majeure clauses will usually be found in the bills of lading, tariffs, or terms and conditions of logistics providers. Frequently invoked by carriers to avoid loss, damage, and delay claims, shippers also claim force majeure to excuse contract non-performance, for example, when they fail to tender required shipments or seek to avoid detention and demurrage charges related to the use of carrier equipment or facilities.
Often overlooked as being “boilerplate” in contract negotiations, many businesses are unpleasantly surprised when
an unexpected event makes contract performance difficult but a court rules that it is not a force majeure event.
“Acts of God,” including natural disasters and weather events; war; and government acts are a few of the many potential “force majeure” events that may excuse contract performance. However, even if specified in a contract, some events may not qualify as being a force majeure event excusing contractual performance.
Courts interpret force majeure clauses narrowly. The meaning of the words within “the four corners of the contract” will govern, unless ambiguous. Then the external circumstances and purposes of the contract can be considered. A force majeure claim may be denied if the event was not within the explicit terms of the contract; not unforeseeable or outside of the control of the parties; still allowed partial contract performance; or was not the proximate cause of contractual nonperformance.
What’s unforeseeable? Not necessarily a snowstorm or cold weather if the contract is to ship goods in mid-winter. Perhaps a pandemic, if specified in a contract before it and any effect on operations has occurred. Not the theft of cargo during a routine cargo inspection by Customs at a border truck stop.
Force majeure usually addresses events impeding contract performance
but not changing market conditions. Thus, allegedly unlawful foreign government industry subsidies making performance of a contract economically unprofitable have been held not to be a force majeure event. In such circumstances the courts have reasoned that the parties can address the risk of changing market conditions or prices in other parts of the contract.
The unexpected happens more frequently than many realize. While not every contingency can be anticipated, a well-drafted force majeure clause in a parcel shipper contract can provide some rules for contract performance or non-performance when the unexpected does occur.
All for now!
Andrew M. Danas is a Partner, Grove, Jaskiewicz and Cobert, LLP, Washington, D.C. Visit www. gjcobert.com or email adanas@ danaslaw.com for more information. The information contained in this article is intended to be general background information. It does not constitute and should not be relied upon as legal advice. Readers should contact a qualified attorney should they have a specific legal question.
Previous PARCEL Counsel columns, including those of regular PARCEL Counsel author, Brent Wm. Primus, JD, may be found in the “Content Library” on PARCELindustry.com. Your questions are also welcome at brent@primuslawoffice.com.
SUPPLY CHAIN SUCCESS
MANAGING YOUR PARCEL PROGRAM WHEN VOLUMES ARE DOWN
By Chelsea Snedden
It is much easier to manage a program when you are growing — hitting rebate incentives, climbing revenue tiers, and carriers are aggressively pushing for your business. However, there will inevitably be times of crisis and disruption — and many shippers will need to change how they function. These changing times reveal the truly talented logistics professionals who learn to adapt, adjust, and thrive.
In 2025, many shippers are reporting fluctuating volumes due to tariff concerns, post-holiday slowdowns, and a general decrease in consumer demand. Carrier contracts are typically built for growth, but what happens when a shipper knows they aren’t growing this year?
Shippers should seize the opportunity to strengthen their relationships with carriers, negotiate amid the risks, and understand their contractual obligations. Here are some proven strategies that can help ensure reliable and cost-effective logistics, even when volumes decline.
Be Informed
Reviewing current agreements is essential to assess the risks associated with lower volumes. In some cases, you may have minimum volume commitment clauses. These clauses require shippers to maintain a minimum volume — or in some cases, a minimum spend — in exchange for lower rates. Failing to meet these commitments could result in fines, or, in rare cases, contract termination, and strain the shipper-carrier relationship. Additionally, if volumes are down, you may face dropping a tier in your revenue-based incentives. Depending on
the architecture of your agreement, losing a tier may drastically increase costs.
Understanding these terms in advance can help you project out when penalties may occur based on business decisions/trajectories. In turn, you can start to plan how to mitigate risks and ensure a smoother transition.
Communicate Early and Often
It is important to monitor your trends and understand how much time you have before your position will be affected, in respect to volume commitments and revenue tiers. Don’t expect your carriers to reach out; instead, initiate a conversation and be transparent about business goals. In some cases, carriers may be willing to adjust revenue/discount tiers to accommodate the drop in volume or offer an additional grace period. If your incumbent or primary carrier is unwilling to adjust, then you now know ahead of time and can potentially look at other options and, if needed, execute a full sourcing strategy.
For example, when a client informed us that they would be decreasing shipping operations, they were advised to discuss this with their carrier. The result of the early planning and communication was an opportunity for a carrier change, which aligned with their new goals and produced savings of five to eight percent based on the new projected shipping profile. Had they not communicated, they would
have been locked into a three-year contract that would have cost significantly more.
You can’t eliminate all accessorial charges operationally; in some cases, it may come down to negotiating, and the more informed you are, the more successful the outcome.
Never Stop Improving
We always recommend that shippers leverage their data to push for best-in-class incentives across their carriers/ agreements. However, when times are tight, there is a larger microscope. Any shifts in accessorial charge occurrences should be reviewed. Ask questions like, “Why are these changes happening?” and “Are there ways we can tighten operations?” to find balance in your program. While transportation costs may jump due to a lost revenue tier, shippers can try to counterbalance this through reductions on accessorial fees. You can’t eliminate all accessorial charges operationally; in some cases, it may
come down to negotiating, and the more informed you are, the more successful the outcome. While enlisting a third party may cost some money up front, they can help identify targeted discounts and find opportunities that will save resources in the long run.
For instance, we all know how pesky the Peak Residential Surcharges can be. The application and fees often change year over year, and the last time you negotiated your agreement, it may not have been as prevalent. In a recent example, a shipper realized its peak charges were approximately $1 million, which was its largest accessorial in 2024. By negotiating a better discount for this surcharge, the shipper saved around $300,000, which helped offset the cost of dropping a tier due to reduced volume.
Exhaust All Options
Shippers should also explore the market for better options, especially during the RFP process. While smaller shipping volumes may disqualify them from bulk discounts or preferred rates with the major carriers, incorporating smaller, regional carriers or the USPS can help manage
rising costs and maintain profitability. These carriers often have simpler pricing structures and flexible service offerings that better suit reduced shipping demands.
Shippers who compare options are more likely to secure competitive rates, optimize delivery times, and avoid overpaying for services that no longer match scaleddown operations.
Staying Ahead of the Game
Navigating a shrinking shipping program doesn’t have to mean sacrificing cost-efficiency or carrier relationships. Encouraging open communication, leveraging shipping
data for strategic negotiations, reviewing contractual obligations, and exploring market alternatives can help shippers proactively adapt to changing volumes. These strategies can protect profitability for shippers and foster future growth when demand rebounds.
Transportation Consultant
Supply Chain. She works with clients to model transportation scenarios, interpreting complex agreements as the primary data analyst. She brings a future-oriented, data-backed, and sustainability-minded perspective to managing parcel transportation programs.
Chelsea Snedden is a Senior
at Körber
NAVIGATING CHANGE IN A MODERN REVOLUTION: A LOOK AT THE USPS IN 2025
By Tammy Tippins
The United States Postal Service (USPS) is like that steadfast friend who is always there, but whose imperfections become apparent when you need them the most.
From delivering holiday cards to transporting e-commerce packages from Amazon, Shein, or your favorite small business, the USPS handles over 142 billion items annually, reaching every address in the country. However, in 2025, with the surge in online shopping and a new administration making waves, the USPS is at a crossroads, caught between its historic mission and modern pressures from e-commerce and calls for efficiency from the Department of Government Efficiency (DOGE).
Today, it remains about connection, but the landscape has changed. E-commerce surged during the pandemic and continues to thrive, with packages now constituting a significant portion of USPS revenue, resulting in a reported $625 million increase in shipping income last year alone. This boost has been a lifeline as First-Class Mail (think letters and bills) continues to decline, down 45% since 2001 due to email and autopay. Online retail
giants and small Etsy shops alike rely on the USPS for “last-mile” delivery, as it’s often cheaper than private carriers like UPS or FedEx, particularly in rural areas those companies might avoid.
Despite this e-commerce boost, the USPS reported a staggering $9.5 billion loss in 2024, doubling its deficit since 2022 to a total of $32 billion. The reasons? A combination of pension obligations, rising labor costs (over 75% of its budget), and an operation struggling to keep up with the times. Delayed mail and package chaos have frustrated customers, while the agency’s 600,000+ workers and 200,000 vehicles, soon to include electric models, strain its finances. As a self-funded entity, it doesn’t rely on taxes but on stamps, shipping fees, and a $15 billion borrowing limit it has already maxed out. Enter DOGE, the Trump administration’s new efficiency task force led by Elon Musk. As of February 2025, Musk is eyeing the USPS for a major overhaul, with whispers of privatization or reducing it to basics (think mail only, not packages). DOGE’s mandate is clear: trim the fat, stop the financial bleeding, and possibly let private players take over what the USPS can’t handle.
The e-commerce landscape complicates the situation. Amazon, the USPS’s largest customer, uses it for last-mile delivery but is also building
its own network, reducing USPS’s share of its packages from 60% in 2017 to 31% by 2019. If DOGE removes the USPS from the package delivery business, rural shoppers and small businesses could face higher costs with private options or no service at all. On the other hand, supporters argue that a leaner USPS could focus on its core mail service, allowing companies like Amazon or FedEx to innovate in e-commerce delivery without the burden of a 250-year-old mandate.
The United States Postal Service (USPS) is currently undergoing a major transformation under its “Delivering for America” 2.0 plan, which aims to modernize operations and ensure financial stability. These changes have significant implications for various aspects of postal and shipping services, including the cessation of SurePost deliveries, the removal of incentive pricing for consolidators, alterations to Destination Delivery Unit (DDU) injection practices, and the closure of USPS facilities.
As part of its network optimization efforts, USPS is shutting down or repurposing smaller facilities and consolidating operations into larger, more efficient hubs known as Sorting and Delivery Centers (S&DCs). This is intended to reduce costs, modernize infrastructure, and improve long-term efficiency. However, these facility closures can disrupt service, especially in
areas where mail processing is moved to distant hubs or across state lines. While Postmaster General Louis DeJoy, who is soon to step down, has paused some consolidations to address service concerns, the plan continues to reshape the flow of mail and packages through the system.
These changes are part of a broader effort to transform USPS into a more competitive and self-sustaining entity. Although the long-term goal is to enhance efficiency, the immediate effects include cost increases for shipping partners and potential service disruptions during the transition. Consumers may experience higher shipping rates as consolidators adjust, and the postal landscape is evolving to favor USPS’s direct services over hybrid models like SurePost.
The stakes are high in 2025, and USPS is at a critical juncture, balancing the need for modernization with the challenge of maintaining reliable service. As these changes unfold, it will be crucial to monitor their impact
on both urban and rural communities. The future of USPS depends on its ability to adapt and innovate while remaining true to its mission of providing prompt, reliable, and efficient mail service for residents and everything from small businesses to corporate shippers. USPS is more than just a logistics machine; it’s a lifeline, delivering medications, ballots, and the personal touch of a handwritten note. With over half a million jobs and a network handling nearly half the world’s mail, it’s an institution
worth preserving or at least reconsidering. The looming audit by DOGE could lead to tough decisions: slimming down, improving e-commerce efficiency, or transitioning to private sector control. Whatever the outcome, the iconic eagle-logo truck still carries a piece of America’s story, and its future hangs in the balance.
Tammy Tippins is Director, Professional Services at Intelligent Audit.
PACKAGING
REVOLUTIONIZING E-COMMERCE: THE RISE OF AUTOMATED PACKAGING SOLUTIONS FOR A SUSTAINABLE FUTURE
By Deepa Pandey
Automated e-commerce packaging uses cutting-edge technology and smart machines to make the packaging process faster and easier for online orders. These systems handle tasks like measuring, packing, sealing, and labeling products with incredible precision. By doing so, they boost efficiency, cut labor costs, and reduce waste.
The result? Faster and more accurate order fulfillment while ensuring products stay safe during delivery. Automated packaging is reshaping logistics, helping retailers keep up with the fast-paced growth of online shopping. With its focus on speed, cost savings, and sustainability, it’s becoming a game-changer for businesses aiming to stay ahead in the e-commerce race.
The global automated e-commerce packaging market has been gaining significant traction in recent years. With a market size of US$ 659.63 million in 2023, this sector is forecasted to expand at a CAGR of 13.7% during the period 2024 to 2034, reaching an impressive US$ 2708.11 million by 2034. This growth reflects the increasing demand for efficient and sustainable packaging solutions in the rapidly growing e-commerce sector.
Key Market Insights
North America’s Market Dominance
In 2023, North America emerged as the leading region in the automated e-commerce packaging market. The region’s dominance is attributed to the high adoption of advanced
packaging technologies and a robust e-commerce infrastructure.
Asia Pacific’s Promising Growth
The Asia-Pacific region is anticipated to grow at a remarkable pace during the forecast period. The growth is fueled by the rapid expansion of e-commerce in countries like China, India, and Southeast Asian nations.
Segment Insights
By Type: The fully automated segment is expected to witness significant growth, driven by the need for high-speed and precise packaging solutions.
By Application: The food & beverage industry dominated the market in 2023, as the sector demands efficient and secure packaging solutions to maintain product freshness and safety.
Understanding Automated E-commerce Packaging
Automated e-commerce packaging leverages advanced machinery to streamline the packaging process for online orders. This includes automated systems for measuring, packing, sealing, and labeling. Automated systems not only ensure faster order fulfillment but also enhance product safety during transit, making them indispensable for modern logistics operations.
Key Benefits of Automation
1. Enhanced Efficiency: Automated systems significantly speed up the packaging process.
2. Cost Reduction: Lower labor costs and minimized material wastage lead to substantial savings.
3. Reduced Errors: Automation ensures consistent quality, reducing the risk of packaging errors.
4. Scalability: These systems can easily adapt to fluctuating demand, ideal for businesses with seasonal spikes.
5. Sustainability: Automated systems optimize material usage, facilitating eco-friendly practices.
Drivers of Market Growth
Surge in E-commerce
Sales
The rise of online shopping, especially post-pandemic, has created a pressing need for efficient packaging solutions. Automated packaging systems enable businesses to manage increased order volumes without compromising on speed or accuracy.
Demand for Customization
Consumers increasingly expect personalized packaging. Automated systems’ ability to adapt to varying requirements provides a competitive edge to e-commerce businesses.
Supply Chain Optimization
Efficient packaging processes streamline supply chains, enhancing resilience against disruptions. This capability drives the adoption of automated e-commerce packaging solutions.
Labor Shortages
The global difficulty in finding skilled labor has pushed companies to invest in automation to maintain productivity and efficiency.
Technological Innovations in Automated Packaging
Advancements in technology have significantly impacted the automated e-commerce packaging market. Key innovations include:
Robotic Arms: High-speed and precise handling of goods.
AI-Powered Systems: Enhanced decision-making for packaging optimization.
3D Scanning: Accurate measurement of product dimensions for customized packaging.
Eco-Friendly Materials: Integration of recyclable and biodegradable materials in packaging processes.
Sustainability Trends
The demand for sustainable packaging has risen sharply. Automated systems that facilitate the use of eco-friendly materials are helping businesses meet stringent environmental regulations while aligning with consumer preferences for greener solutions.
E-commerce Purchase Trends
Globally, 2.71 billion people purchased online in 2023. This number is projected to grow to 2.77 billion by 2025, driven by increasing internet accessibility and consumer convenience. By 2024:
20.1% of retail transactions will occur online.
E-commerce revenues will surpass US$ 6.3 trillion.
The US and China will lead in online purchases, with 270.11 million and 915.1 million consumers respectively.
Challenges in the Market
Despite the promising growth, the automated e-commerce packaging market faces several challenges:
High Initial Costs: The installation of automated systems requires significant investment.
Integration Issues: Ensuring compatibility with existing logistics and IT systems can be complex.
Technological Dependence: Over-reliance on technology may lead to operational disruptions during system failures.
The automated e-commerce packaging market is poised for substantial growth, driven by technological advancements, rising e-commerce sales, and the increasing demand for sustainable solutions. Businesses that embrace automation stand to gain a competitive edge by enhancing efficiency, reducing costs, and improving customer satisfaction.
Deepa Pandey, Principal Consultant at Towards Packaging, has experience across various aspects of the packaging sector, including regulatory compliance, packaging design, material innovations, and sustainability.
THE IMPORTANCE OF PACKAGING IN REVERSE LOGISTICS
By Tony Sciarrotta
Packaging significantly impacts the efficiency and cost-effectiveness of reverse logistics by protecting returned goods, reducing environmental impact, improving cost efficiency, and enhancing customer satisfaction.
Protective packaging materials such as bubble wrap, foam inserts, and sturdy corrugated boxes ensure that goods remain intact throughout their journey in the reverse supply chain. In addition, the use of tamper-proof and waterproof packaging also helps prevent loss or contamination, especially for sensitive items such as electronics, pharmaceuticals, and perishable goods.
Indeed, poor packaging can lead to product damage, increasing repair and replacement expenses. Additionally, oversized or excessive packaging results in higher shipping costs due to increased weight and volume. By designing packaging that is both protective and space-efficient, companies can reduce material usage and transportation expenses. Smart packaging solutions, such as collapsible boxes and modular packaging, help maximize storage efficiency and minimize handling costs.
Standardizing packaging helps reduce the time and labor required for processing returns. Barcode labels, RFID tags, and smart packaging technologies further enhance tracking and visibility throughout the reverse supply chain. These innovations help companies monitor returned goods, assess their condition, and determine the most appropriate next steps — whether that involves restocking, refurbishing, recycling, or disposal. Well-designed packaging also minimizes the risk of errors and delays, ensuring that returned products reach the right destination promptly.
Packaging also plays a vital role in shaping customer perceptions. Customers expect a hassle-free and convenient return process, which includes easy-to-use and secure packaging. Prepaid return labels, resealable boxes, and clear return instructions improve the customer experience by
simplifying the return process. When customers feel that returning a product is straightforward and well-supported, they are more likely to remain loyal to the brand and make repeat purchases. Additionally, damaged or poorly packaged returned items may lead to disputes or dissatisfaction, harming a company’s reputation. Investing in high-quality return packaging ensures that customers receive the same level of care and professionalism as they did during the initial purchase.
Environmental Impact
The rise in e-commerce and product returns has led to an increase in packaging waste, making it imperative for businesses to adopt eco-friendly packaging solutions. In 2022, for example, the e-commerce sector generated about 3.88 billion pounds of plastic packaging waste, marking a 14.6% increase from the previous year, according to advocacy group Oceana.
Companies are increasingly using recyclable, biodegradable, and reusable packaging materials to minimize their carbon footprint. Reusable packaging, such as returnable containers and mailers, not only reduces waste but also lowers packaging costs in the long run. Additionally, lightweight and space-efficient packaging materials reduce fuel consumption during transportation, further contributing to sustainability efforts.
Challenges and Innovations
While packaging is essential
in reverse logistics, it also presents challenges. Balancing protection, sustainability, and cost-efficiency can be complex, as businesses must find solutions that meet multiple objectives simultaneously. Additionally, the unpredictability of returned goods — varying in size, condition, and category — makes standardization difficult. To address these challenges, companies are adopting innovative packaging solutions, such as smart packaging with IoT sensors that provide realtime tracking and condition monitoring. Advances in biodegradable and compostable packaging materials also offer sustainable alternatives without compromising product protection. Companies are also exploring on-demand packaging solutions, where packaging is customized based on the specific needs of returned goods, reducing material waste and transportation costs. Businesses that prioritize innovative and sustainable packaging solutions can optimize their reverse logistics processes, improve operational efficiency, and strengthen customer loyalty. As the importance of reverse logistics continues to grow, investing in smart and eco-friendly packaging will be crucial.
Tony
Sciarrotta is Executive Director of
the Reverse Logistics Association. The RLA offers various tools, white-papers, and monthly webinars that provide best practices in managing reverse logistics.
How Consumer Behavior and Expectations Can (and Should) Influence Your Transportation Strategy
By Berkley Stafford
Quick! Name the three biggest factors affecting the supply chain in recent history. Easy, right? COVID-19, Amazon, and AI/ML. You understand intimately how each of the three has changed the way you approach your transportation and supply chain operations. But how much are you looking at consumer behavior and expectations when developing your logistics and transportation plans?
A 2024 proprietary McKinsey survey of more than 1,000 US consumers showed some marked differences in consumer expectations compared to 2022.
Less prioritization of speed. Ninety percent of consumers are willing to wait two or three days for deliveries — especially if it means avoid shipping costs.
More sensitivity to costs. Ninety percent of consumers are likely to abandon shopping carts that feature high shipping costs for standard items.
Emphasis on reliability. Consumers might be willing to trade off slightly
slower delivery speeds for more assurance that packages will arrive on time within the promised delivery window.
Demand for optionality. Consumers place importance on flexible delivery options and return policies.
Interest in sustainability. More than one-third of consumers are willing to pay an additional one or two dollars for more sustainable shipping.
Each of these consumer expectations should be directly shaping your transportation strategy in 2025 and beyond. Here’s a closer look:
1. Speed and Reliability: The New Balance
Consumers increasingly expect fast and reliable delivery services. The rise of e-commerce giants like Amazon has set a high bar for delivery times. McKinsey found 90% of US online shoppers expect two- to three-day shipping and that almost half will shop elsewhere if delivery times are too long. To meet
these expectations, you need to optimize your supply chain operations, invest in advanced logistics technologies, and partner with reliable carriers.
What this means for your transportation strategy:
Invest in Last-Mile Optimization: Route planning software can improve delivery efficiency without increasing costs.
Adjust Delivery Options Based on Product Type: High-value or time-sensitive items may still require expedited shipping, while others can leverage economy shipping models.
Increase Distribution Network Density: More localized fulfillment centers reduce transit times without requiring faster transport speeds.
2. Transparency and Communication Matter More Than Ever
Modern consumers value transparency and real-time communication. They want to know the status of their orders at all times. Implementing tracking systems and providing regular updates can enhance your customer satisfaction
and build trust.
What this means for your transportation strategy:
Offer Live Tracking & Notifications: Visibility tools powered by IoT and GPS tracking can provide real-time location data.
Proactively Communicate Delays: Inform customers about potential disruptions. You’ll build trust even in unpredictable situations.
Automated Customer Updates: AI-driven chatbots or automated email/SMS updates can reduce customer service inquiries and improve satisfaction.
3.
Cost Sensitivity:
The Free Shipping Dilemma
While free shipping remains a strong incentive, consumers are becoming more strategic about their spending. Shopify notes 58% of consumers would stop buying from a brand after three shipping delays.
What this means for your transportation strategy:
Offer Tiered Shipping Options: Providing consumers with economy, standard, and expedited shipping choices aligns with different budget needs.
Use AI to Optimize Shipping Costs: AI-driven logistics management can dynamically select the most cost-effective carrier per shipment.
Consolidate Shipments Where Possible: Encouraging bulk ordering or optimizing multi-item shipments can help your business reduce per-package shipping expenses.
4. The Rise of Sustainable Transportation
Environmental concerns are becoming more prominent among consumers. Many prefer to support companies that prioritize sustainability. A 2023 survey found 66% of US consumers are willing to pay more for sustainable products. Incorporating eco-friendly practices, such as using electric vehicles or optimizing delivery routes to reduce carbon emissions, can help you attract environmentally conscious customers. What this means for your transportation strategy:
Invest in Greener Logistics Solutions: Consider using electric vehicles (EVs), optimizing truck loads, or leveraging rail freight to cut emissions.
Offer Carbon Offset Options: Give customers the ability to offset emissions with their purchase.
Minimize Packaging Waste: Reducing box sizes and using recyclable materials contributes to your sustainability efforts.
5. Personalization and Flexible Delivery Options
Personalized experiences are highly valued by today’s consumers. Tailoring delivery options to individual preferences, such as offering same-day delivery or flexible time slots, can significantly improve customer satisfaction. What this means for your transportation strategy:
Implement Delivery Time Slot Selection: Allow customers to choose specific windows for package drop-offs.
Enable In-Store and Curbside Pickup: Retailers like Target and Walmart
have seen increased engagement with click-and-collect services.
Develop Subscription-Based Delivery Models: Amazon’s Subscribe & Save model has shown how recurring deliveries can enhance customer retention.
6. Cost Efficiency: Balancing Affordability & Service Quality
While speed and personalization are important, cost remains a critical factor. Consumers expect competitive pricing without compromising on service quality. You must find a balance between offering affordable shipping options and maintaining efficient operations.
As supply chain costs fluctuate due to fuel prices, labor shortages, and increased e-commerce demand, you must refine your transportation strategy to remain cost-efficient without sacrificing service levels.
What this means for your transportation strategy:
Offer Cost-Effective Shipping Solutions: Tiered pricing models can help you cater to different customer expectations.
Optimize Carrier Selection: AI-powered logistics tools can select the most cost-efficient carriers and routes.
Reduce Last-Mile Costs: Leveraging localized distribution networks can lower expenses while maintaining service quality.
Adapting to Consumer Expectations
To stay competitive, you must continuously refine your transportation strategy based on shifting consumer demands.
Focusing on flexibility, cost-efficiency, and sustainability will ensure long-term success in a rapidly evolving market.
It’s worth taking a step back to reassess whether you’re providing the right level of service for your customers — too much, and you’re incurring unnecessary costs; too little, and you risk losing business. Striking the right balance can not only improve customer satisfaction but also enhance margins and long-term retention.
E-commerce continues to grow following a boost in 2018 and again with the COVID-19 pandemic in 2020. To capitalize on the continued growth with online shopping and demand for same/ next-day delivery, major retailers started to implement micro-fulfillment centers (MFCs) in 2021. MFCs are smaller, typically automated warehouses located closer to the customer and are stocked with high-demand items based on local consumer needs.
Quickly following the increased use of automated MFCs, technology suppliers focused on expanding their capabilities and marketing strategies. In 2023, there was a surge in grocery retailers adopting the use of MFC, mostly adjacent to their stores. The pharmaceutical industry is another space getting into MFC, with the growth in online pharmacy services, sensitive products, and accuracy requirements. Parts distribution is yet another growth area, both to keep manufacturing equipment running and because more people are working on equipment at home as a hobby or for cost savings. There are hundreds of micro-fulfillment centers today; however, there are multiple studies suggesting there will be thousands by 2030.
MFCs are strategically located to allow delivery or enable customer pickup, providing same-day/next-day delivery. This places many of these facilities in urban or suburban locations near retail stores. As noted, most of these facilities are automated, including goods to person technologies, which take up less square footage and automatically bring products ordered forward to workstations. These products are then delivered to the consumer’s front door.
With Benefits Come Challenges
The main benefit of the MFC strategy is faster delivery/reduced lead time to the consumer, including within hours of the consumer ordering online. In addition, it provides lower shipping costs, increased order accuracy, improved inventory management, and overall enhanced customer satisfaction. This doesn’t come easy, as there are numerous challenges to establishing MFCs. Some of these challenges include finding the real estate/space in the specific area, limited inventory in the system, and the coordination/logistics involved in sustaining the operations. With these challenges and most projects requiring a high investment, it is wise to spend the time planning. The planning process includes gathering the required data, such as inventory history, order history, and item master details. It also includes alignment with the business objectives, including customer service levels and key performance metrics. Are you looking to provide same-day service, in a specific region with 100% accuracy and on-time delivery? It is also critical to align on the potential growth projections and scalability of the application. Many of the automated solutions have modular/scalable designs, but you need to have your volumes, inventory, and growth per year defined.
If you are not familiar with the MFC automated concepts, then you could involve a consulting or integrator partner to evaluate the various options. It is likely you need to develop an ROI for the MFC strategy, which includes logistics savings, operational savings, and costs including real estate, building construction, added inventory, automation/technology investments, and other costs/benefits. Once you have a proven
strategy, it is critical to find the right automation partner to engage with for the system design, fabrication, installation, testing, and commissioning. Most companies have resources/ partners for building construction and real estate, but likely not with automation partners that provide this technology.
In terms of the technology and providers that can provide MFC solutions, there are hundreds, but the following information highlights a couple concepts. Shuttle technology is a goods-to-person technology that can be leveraged for MFC. It is typically installed in lower clear heights and uses robots to navigate aisles to bring totes with products forward to workstations to fulfill orders. There are many suppliers of shuttle technology suitable for MFC designs. AutoStore is a specific goods-to-person application that is integrated by many providers and is a common solution for MFCs. It is a space-efficient design, with a compact grid layout and is modular/ scalable. The best way to describe the AutoStore is automated elevators that are used to retrieve totes with products and deposit them at workstations for fulfillment. It is a denser and more space-efficient system than a shuttle, because there are no aisles; the totes travel along the top of the system. The AutoStore is also a system that requires a lower clear height. The typical system height ranges from 25 to 28 feet, plus local fire code clearance above the system, which is typically 6.5 feet. The shuttle has similar height requirements.
To maintain a successful MFC strategy, it is critical to keep the system stocked with the right products and inventory levels. This is an area where artificial intelligence (AI) can help by analyzing large data sets to provide insight for optimizing the MFC processes. But if you aren’t ready for that technology, then ensure you have the proper sales and operations planning, as well as related supply chain software tools to maintain the system’s efficiency. Accurate demand forecasting improves stock management by correctly forecasting the demand, making sure you have the right inventory stock in the MFC. And, efficient order routing optimizes the routing of orders through the fulfillment center for faster picking and delivery of orders.
Shippers need to keep up with consumer demands of same-day (within hours) delivery requirements, and automated MFCs provide a viable solution. These smaller, automated facilities are less expensive than building another large distribution center, and the optimized placement of these facilities could drive your e-commerce forward. However, nothing should be done without a complete analysis of your current logistics network, distribution facilities, store sites, and internal supply chain capabilities to execute a MFC strategy. Model scenarios with the addition of MFCs and test the impact to your business. If right for you, and with a proven strategy, the exciting work can begin with designing the systems and selecting a partner to move into the MFC future.
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Norm Saenz is Partner and Managing Director, St. Onge Company.
By Jackson Wood
PRACTICAL STEPS TO TACKLING GLOBAL TRADE CHALLENGES IN 2025
Global business leaders may be in for a bumpy ride in 2025 as they navigate the increasingly complex challenge of moving goods across international borders. With rising tariffs and trade barriers, geopolitical volatility, and emerging compliance issues, especially related to Environmental, Social, and Governance (ESG) regulations, businesses involved in cross-border commerce are seeking ways to temper the impact of these trade issues while keeping goods flowing in the face of potential supply chain disruptions.
With the advent of pressing new supply chain challenges, over and above typical business operations issues, what strategies are global business leaders deploying in 2025 to mitigate risk and drive profitability? According to Descartes’ 2024 Supply Chain Intelligence Benchmark Survey, leading companies are adopting a three-pronged approach to supply chain resilience:
1. Using global trade data to identify new opportunities and mitigate risk. 2. Employing supply chain intelligence as a key customer service differentiator. 3. Leveraging technology to drive growth.
Knowledge Means Power (and Profits) Agility. Flexibility. Resilience. As the international trade landscape becomes increasingly complex and volatile, global companies are building their supply chain strategies around these three concepts — and they’re relying on global trade intelligence to guide their paths. Whether companies need to adapt to newly imposed tariffs, keep up with rapidly changing sanctions and compliance regulations, or dampen the effects of regional instability in a supplier’s locale, global trade intelligence is the cornerstone of supply chain resilience. By leveraging granular global trade data, businesses can develop contingency plans to mitigate supply chain risk, helping them quickly find suppliers and customers in alternative
markets, spot supply and demand shifts, and optimize trade lanes.
The 2024 Descartes survey of industry leaders across Europe, the Americas, and Asia-Pacific highlights the importance of global trade intelligence in helping companies tackle the mounting complexity of conducting business in the international marketplace. Most respondents pointed to global trade intelligence as the primary capability they need today to deliver the greatest business value in the next two years; more than a third (36%) identified trade intelligence as critical to rapidly identifying new suppliers and customers to overcome setbacks in existing markets, while 27% of respondents prioritized global trade analytics to help them gauge supply and demand potential on a country-by-country basis.
Compliance Complexity Causing Headaches
On the regulatory front, accurate trade intelligence is critical to ensuring
compliance and mitigating risk on the international stage. With the new US administration threatening a swath of new and increased tariffs — coupled with retaliatory trade measures from China and other targeted countries — and the geopolitical conflict in the Middle East and Ukraine driving frequent changes in sanctions and restricted party lists, businesses rely on timely, accurate trade data to minimize their exposure to illicit parties.
Adding further complexity to their compliance practices, in accordance with the Uyghur Forced Labor Prevention Act (UFLPA), organizations are responsible for removing forced labor across all tiers of their supply chains — a virtually impossible endeavor without a technology-driven global trade intelligence strategy.
Global businesses are taking heed of the increasingly complex compliance requirements and the essential need for comprehensive, timely trade data in order to comply with rapidly shifting regulations and demanding supply chain monitoring expectations. Indeed, about a quarter of respondents identified supply chain mapping (26%) and ESG compliance (25%) as the main capabilities required to deliver the greatest business value in the next two years, according to the Descartes survey.
Customer Service Advantage
Although charged with tackling emerging global trade challenges, business leaders cannot afford to let their focus drift from delivering exemplary service to their customers to keep the revenue flywheel spinning. In pursuit of improving the customer experience, global trade intelligence is a significant asset, helping organizations identify, analyze, and vet the best suppliers, accelerate alternate sourcing decisions in the face of supply chain disruptions, and optimize cost structures to enable competitive pricing.
The Descartes survey found that 38% of respondents view global trade intelligence as a customer service differentiator, while 35% view it as a competitive asset. Notably, two times more high-growth companies believe global trade intelligence gives them a
competitive advantage (44%) compared to organizations with shrinking or flat growth (22%). Organizations with shrinking/flat or less than five percent growth also had the highest percentage of respondents who view trade intelligence as a necessary evil (six to seven percent, respectively).
Technology Underpins Growth Strategies
Supply chain leaders attempting to manage today’s global trade challenges using manual practices and outdated systems are behind the eight ball when it comes to remaining competitive and profitable. Given the slim margin of error and the importance of speed-to-market today, organizations are turning to technology to help them drive revenue growth and strengthen their supply chain resilience.
The 2024 Descartes study found that 61% of global business leaders consider technology extremely or very important to their growth strategy; only one percent say technology is not important. When asked about their plans for meeting trade challenges to ensure growth, the most common response was “investing in technology” (38%), outranking other strategies such as outsourcing (eight percent), cutting costs (11%), or investing in internal resources (19%).
Notably, the Descartes research revealed a distinct correlation between companies with higher growth rates and their emphasis on technology investment to manage trade challenges and respond quickly to supply chain disruptions. For instance, given the complex research and fast response time required to effectively strategize alternative international trade plans, high-growth organizations increasingly rely on AI-powered technology for number crunching, automation, and visibility.
In fact, according to the 2024 survey, 50% of fast-growing companies emphasize technology investments. Unsurprisingly, the importance of technology to an organization’s competitive strategy was highest in fast followers (43%) and early adopters (30%) of technology, underscoring the connection between an appreciation of technology’s strategic role and a positive growth outlook.
Tech Investment Payoffs
More and more businesses engaged in international commerce are turning to global trade intelligence technology to reduce risk through supply chain optimization and supplier diversification and to help them make informed shortand long-term business decisions in support of sustainable growth.
When calculating the ROI of their technology investments, 27% of supply chain intelligence decision makers rated “enhanced supply chain flexibility / resilience” as the primary business return used to measure success, according to the study, with a quarter of respondents prioritizing revenue growth. Notably, respondents with >15% growth were least concerned with metrics of reduced risk (nine percent) and most focused on enhancing supply chain flexibility (31%) and revenue growth (23%) — an affirmation of the key role supply chain resilience plays in driving growth.
Facing geopolitical volatility, shifting trade policies, and a mix of unpredictable supply chain disruptions, today’s business leaders must tackle an increasingly complex global trade landscape. Companies are adapting by focusing on strengthening supply chain resilience through strategic planning, technology, and compliance, leveraging global trade intelligence as the common denominator to drive supply chain agility, competitive differentiation, and revenue growth.
Jackson Wood is the Director, Industry Strategy, operating across Descartes’ Global Trade Intelligence business. Jackson works collaboratively with Product Management, Global Marketing and Commercial Operations partners to help develop and deliver solutions that address the increasing complexity and volatility of today’s global trade environment. With a keen focus on both the present and emerging needs of Descartes’ customers, Jackson leverages his 15+ years of experience in market research, strategic planning, change management, and corporate development to provide meaningful insights that help increase and amplify the value clients realize from Descartes’ solutions. Jackson joined the organization in December 2019 and brings over a decade of trade compliance industry experience to his role.
By Josh Dunham
THE EVOLUTION OF SPEND MANAGEMENT
In recent years, parcel spend management evolved in unimaginable ways. A new era is now upon us.
Years ago, as a beginning sales rep for one of the world’s largest parcel carriers, I was surprised to find that the shippers who most often secured favorable terms and conditions in their carrier negotiations were not those at companies with the greatest shipping volume or the gravitas to demand lower costs. Those who secured the best terms and conditions were those who knew their shipping data best, and understood in deep detail, at least as it was then defined, the vital factors of their success.
Importantly, they used this data — which included the average weight of their parcels, their total surcharge spend, the zones they shipped to most, how much they paid in minimum charges, their total shipping spend, and their average cost-per-parcel — to make a compelling business for discounts and other concessions. At the time, gathering this intelligence was a monumental task that required a dedicated consultant for support and a shipping department with the time and the expertise to draw insights from lengthy carrier invoices and massive Excel spreadsheets.
But despite the difficulty, many shippers were quite successful in managing their costs down. But there were significant limitations, among them the gain share business model of parcel consultants. The status quo then — and one which remains common today — of paying consultants a percentage of the savings they secured, typically over three years, was costly. More than a few
shippers ended consulting engagements as gain share fatigue set in only to renew when parcel shipping costs again began to rise.
Parcel Spend – An Anomaly
Spend management efforts began to take off with the emergence of the business intelligence and Software-as-a-Service solutions now ubiquitous in business today. This was particularly true in the procurement function, where e-procurement software gave purchasing departments the ability to identify and eliminate maverick spend — purchases that occurred outside of preferred contracts — by enabling users to easily access them online.
But parcel shipping spend remained an anomaly. First, there was no data standard among carriers, making the normalization of shipping data nearly impossible. Secondly, each parcel shipment was, in effect, an ad hoc event, with costs further complicated by a constantly changing litany of factors from surcharges, to new rules and fees on everything from specific zones to parcel dimensions and weights.
Parcel shipping costs were also complex and governed by carrier contracts that included numerous pages of fine-print details and exceptions. As a result, most shipping departments and financial departments had little visibility over their parcel shipping data, let alone the ability to proactively manage it. Advancements in data science would change that.
Data Science Changes Everything
The ability to consolidate massive
amounts of shipping information into data lakes, and the ability to employ powerful analytic technologies like generative AI and machine learning, enabled organizations to gain a radically more detailed understanding of their shipping data than massive spreadsheets or even consultants allowed. Even so, parcel spend management remained a reactive endeavor.
That changed when advanced modeling capabilities enabled predictive analytics and led to the industry’s first parcel intelligence platforms as we know them. Now for the first time, shippers had visibility over their shipping data and were able to pose “what if?” scenarios to determine how various changes — such as the introduction of a new surcharge or the carriers’ annual general rate increases — would impact their bottom line.
With this singular development, parcel spend management became a proactive, not just a reactive, effort. Now shippers could test how different approaches, (for example, transferring air express shipments to less expensive ground options, or negotiating a different threshold for volume-based discounts) would impact their costs.
The Future of Spend Management Is Here
The next chapter in parcel spend management is here. Whereas parcel spend management evolved from a reactive to a proactive activity, we have now entered a time when shippers are increasingly called on to provide actionable solutions that lower costs.
And as in the past, a corresponding technological shift is underway.
The predictive analytics now inherent in parcel shipping platforms and transportation management systems is being augmented by prescriptive analytics that go beyond predicting likely outcomes to identifying steps shippers can take to keep costs in check. This ability to prescribe effective actions transforms parcel spend management into a forward-looking endeavor that changes how shippers address many common tasks, including:
Enterprise-wide cost controls:
Seamlessly integrated with Enterprise Resource Planning (ERP), financial — including accounts payable — Customer Relationship Management (CRM), and other systems of record, today’s parcel shipping platforms enable shippers not only to manage down their own transportation costs, but also provide financial leaders with recommended actions that impact the larger demand and fulfillment process; for example, seeing how different parcel dimensions and
packaging strategies impact shipping costs and warehouse operations.
Scenario planning: Shippers can now receive and test optimal responses to any number of criteria that go beyond predicting how everything from carriers’ general rate increases to regulatory shifts will impact costs, and steps shippers can proactively test and take to address them.
Carrier selection and multi-carrier optimization: Armed with data on service levels and predicted costs, predictive analytics identifies the optimal carrier for specific shipments based on a thorough vetting of everything from surcharges to on-time delivery performance.
Carrier Agreement Management: Prescriptive analytics arms shippers with insights not only on how terms and conditions in contracts impact parcel spend, but also suggests ways shippers can work more effectively with their carriers to best respond to surcharges — among them those for fuel, zones, and oversized parcels —
when crafting an agreement optimized for their unique shipping profile.
Armed with these capabilities and the critical skills they possess, shippers are front-and-center in the spend management efforts of the organizations they serve, even as industries come to realize the singular impact that parcel shipping performance has on any business that depends on fast access to supplies or that sells products online. Now more than ever, shippers will not only predict what lies ahead, but will shape and guide the cost-saving strategies that are crucial for business success today.
Josh Dunham is the co-founder and CEO of Reveel. Founded to help shippers level the playing field for carriers, Reveel’s Shipping Intelligence Platform uses Parcel Spend Management 2.0 technology to provide parcel shippers with the actionable insights they need to lower their shipping costs right now, and an Analytics Hub that enables them to drill down into even the most complex shipping data.
9 IDEAS TO HELP WITH YOUR SHIPPING ISSUES & QUESTIONS
Consumers and businesses have always wanted everything fast, accurate, and at a low cost. To deliver this level of expectation, a shipper needs to continue looking for ways to improve and optimize their overall business and operations. Taking a good look at how your shipping software and transportation management systems are working can help make you more competitive and profitable. And that is exactly what these 9 solution providers want to talk with you about.
Banyan Technology is simplifying parcel shipping with LIVE Connect®, a real-time freight management platform that streamlines over-the-road (OTR) rate management, shipment execution, and visibility. Our Parcel Savings+ program enhances cost efficiency by leveraging strategic carrier partnerships, enabling businesses to reduce parcel spend through exclusive volume-based discounts and optimized shipping strategies. Whether used as a standalone TMS or an API-driven integration, LIVE Connect automates rating, predictive pricing, automated freight bill auditing, and real-time intelligence for multi-mode freight execution including Truckload, LTL, final-mile, and parcel shipping.
CT Logistics offers intelligent freight and parcel management solutions through a standalone TMS or as an API-driven integration for existing systems. Shippers, 3PLs, and supply chain partners leverage CT’s TMS to streamline Truckload, Less-Than-Truckload (LTL), final-mile, and parcel shipping with real-time rating, execution, and visibility from a single interface. These innovative technology applications automate multimode freight management by reducing manual tasks through AI-powered insights, predictive pricing, real-time business intelligence, and automated document generation and delivery. Offering enhanced visibility and control throughout the entire shipping process, users maximize operational efficiency and cost-savings.
Keep your parcels on par. Find a partner with the logistics experience to give your team the best user experience. A trusted leader in spend management for nearly 70 years, CTSI-Global and Honeybee TMS are your global logistics ecosystem. Streamline address validation, labeling, rating, parcel manifesting, tracking, and predictive analytics. Manage parcel and freight, streamline payment processing, optimize shipments, and engage with real-time analytics. Custom logistics consulting empowers you to quickly adapt to evolving supply chain scenarios.
GTMS creates logistics solutions that are driven by technology. We focus heavily on highly negotiated carrier contracts to enhance your business’s performance and bottom line — all this without sacrificing service. Technology allows us to quickly and efficiently tell our customers where they can save on parcels, LTL, TL, and international. Licensed OTI/NVOCC
Our state-of-the-art technology allows us to help you route, track, audit, and report on every single shipment from anywhere in the world. GTMS provides a true end-to-end solution for your company’s logistics and inbound buyers helping you create a better customer experience.
www.gtms.us
With rising costs, tariffs, and fraud, shippers can’t afford errors — yet 80% of freight invoices are wrong, causing major financial loss. Since 1996, Intelligent Audit has helped companies recover millions through multimodal freight audit and payment solutions. But we go beyond auditing and recovery. Our Business Intelligence tools turn messy data into insights, while AI-powered Anomaly Detection exposes fraud and hidden costs. Our Modeling Tools optimize carrier mix, networks, and parcel operations.
Intelligent Audit empowers shippers to ship smarter — faster, more profitably, and with fewer exceptions.
Every day, over 500 million packages and freight shipments travel across the United States. For these deliveries to arrive successfully at the 155 million addresses of those customers, the contact details on each package need to be correct. Avoid the headaches and unnecessary costs associated with bad shipping addresses when you use Melissa’s USPS® CASS Certified™ Global Address Autocomplete and Verification tools to ensure information enters your system correctly. Address verification is a crucial step for your shipment processing to avoid botched deliveries and hefty secondary delivery charges. Visit our website for a free trial.
Stop by ProShip at booth #238 at NPF to discover how to elevate your parcel shipping strategy. Learn about the advantages of our partnership with USPS, including complimentary access to their on-platform engine and carrier API. See how our shipping software provides unmatched carrier flexibility and choice, empowering you to optimize operations and deliver exceptional customer experiences. Our team will be ready to show you how ProShip helps enterprise shippers streamline processes and drive efficiency.
Sendflex’s mission is to help shippers adapt quickly to the growing complexity and volatility that has crept into parcel industry with the growth of e-commerce and B2C supply chains. Our parcel transportation management system (TMS) is the first cloud-native platform that enables medium- to large-sized shippers and 3PLs configure no-code optimization instructions to simulate, plan, and orchestrate high-speed execution throughout the order creation to invoice process. Sendflex reduces margin erosion and waste, while optimizing customer delivery experiences.
Sendflex.com
FreightOptics is a shipping software platform designed to help businesses reduce parcel spend and gain total control over their transportation data. Users get real-time visibility into shipping activity across 100+ parcel and freight carriers with a single login. The platform automates audit and recovery, contract negotiation, and claims management, while using advanced analytics to flag surcharge errors, identify rate discrepancies, and surface actionable savings opportunities. Backed by Zero Down Supply Chain Solutions, FreightOptics empowers shippers to streamline operations, cut costs, and make smarter decisions with powerful analytics, full transparency, and fast, measurable results.
www.zdscs.com | 954.753.7006 | info@zdscs.com
THE FUTURE OF SUSTAINABLE LOGISTICS: Overcoming Barriers
globally are willing to pay more for sustainable shipping. This discrepancy between expectations and financial commitment creates challenges for businesses striving to integrate sustainable logistics solutions while maintaining cost efficiency.
and Embracing
SOpportunities
By Greg Hewitt
ustainability is no longer just a buzzword — it’s a business imperative for companies looking to ensure long-term success. For small and medium-sized enterprises (SMEs), integrating sustainable logistics practices can offer both challenges and opportunities as they navigate an evolving marketplace.
DHL’s Global Sustainability Survey 2024 underscores this shift: many SMEs recognize the importance of sustainability — two-thirds consider it “very important” or “extremely important.” The survey explores the sustainability priorities of SMEs across 11 markets and nine industries, revealing valuable insights about both progress and ongoing hurdles, like putting these priorities into action. Financial constraints remain a common challenge, with over half of the businesses surveyed allocating only one to three percent of their operating budgets toward sustainability initiatives. This begs an important question: if sustainability is a priority, what factors influence companies’ ability to invest?
Consumer Demand vs. Investment Dilemma
Consumer expectations can significantly shape corporate sustainability strategies, yet paradox remains. A recent National Retail Federation (NRF) report demonstrates the growing pressure on businesses to reduce their carbon footprint and adopt circular economy principles. However, while many consumers advocate for greener supply chains, only 23%
Regional differences further complicate the landscape. For example, some markets, such as India (51%) and China (47%), show higher consumer support in paying for sustainable options. In contrast, German SMEs struggle to secure internal and customer buy-in, with 74% identifying it as a major challenge. This hesitancy suggests that SMEs need to bridge this gap with greater incentives, support, and education on the long-term economic benefits of sustainable practices.
The Rise of Regionalized and Green Logistics
Businesses are increasingly developing regional supply chain strategies to meet consumer expectations, shortening transportation distances, cutting carbon footprints, and improving operational efficiency by localizing production and distribution. This approach supports the broader goal of reducing Scope 3 emissions — those produced by supply chain partners.
Many businesses find that Scope 3 emissions make up most of their carbon output, with transportation offering a significant opportunity for reduction. According to the International Transport Forum, fuel combustion accounts for 30% of all transport-related CO2 emissions.
Additionally, resilience has become a key driver of sustainability strategies. The COVID-19 pandemic and geopolitical instability exposed weaknesses in global supply networks, prompting businesses to rethink sourcing and distribution strategies and accelerating the shift toward regionalized supply chains. SMEs are responding by investing in localized logistics infrastructure to not only cut emissions but also strengthen supply chain reliability.
However, balancing sustainability with cost-effectiveness presents logistical and financial challenges for SMEs. More businesses are adopting green logistics solutions, such as alternative fuels, electric delivery fleets, and carbon offset programs. Sustainable Aviation Fuel (SAF) adoption is gaining traction, allowing businesses to lower their environmental impact in air cargo operations. The “book and claim” approach allows companies to invest in lower-carbon transport options without overhauling their supply chains. At the same time, electrified last-mile delivery is expanding, aligning with industry goals to reduce greenhouse gas emissions and fossil fuel dependence.
Despite these advancements, many SMEs remain uncertain about how to effectively integrate sustainability into their supply chains.
Breaking Barriers: Seven Steps to Sustainable Logistics
While financial constraints and consumer hesitation present challenges, businesses can take proactive steps to overcome these barriers. A structured approach to sustainability and gradual implementation helps companies balance cost concerns with environmental responsibility. Seven practical steps to sustainability include:
2. Setting Measurable Sustainability Goals – Establishing clear, measurable targets for emissions reduction and waste minimization.
3. Investing in Green Logistics – Exploring eco-friendly transportation methods and circular economy models.
4. Optimizing Packaging and Reducing Waste – Using recyclable materials and minimizing excess packaging.
5. Engaging Customers in Sustainability Efforts – Educating consumers on eco-friendly practices and incentivizing greener choices.
6. Leveraging Technology for Efficiency – Use data-driven solutions to optimize routes, reduce fuel consumption, and enhance supply chain transparency.
7. Collaborating with Sustainable Partners – Partnering with environmentally responsible suppliers and logistics providers to create a more sustainable value chain.
With this approach, businesses can align with evolving market expectations and contribute to long-term environmental sustainability.
Policy and Regulatory Trends in Sustainability
Government policies and regulations influence accelerating corporate sustainability efforts. Many countries implement stricter emissions regulations and incentivize sustainable business practices through tax credits and grants. The European Union’s Green Deal, for example, aims to make Europe climate-neutral by 2050 and imposes more stringent sustainability reporting requirements on businesses.
Meanwhile, in the United States, the Securities and Exchange Commission (SEC) has proposed rules requiring publicly traded companies to disclose climate-related risks and greenhouse gas emissions, creating greater transparency. These policies push businesses to take sustainability more seriously, ensuring that environmental responsibility becomes a core component of corporate strategy rather than an afterthought.
Looking Ahead: Sustainability in 2025 and Beyond
Sustainability will continue to shape business strategies in 2025 and define business success in the coming years. Companies that proactively adopt green logistics and leverage emerging technologies will gain a competitive edge. The findings from the DHL Global Sustainability Survey highlight the urgency for businesses to transition from acknowledgment to action.
In 2025 and beyond, businesses must recognize sustainability isn’t just about responsibility — it’s a strategic advantage. Companies that invest in sustainable supply chains, adopt technological advancements, and collaborate with stakeholders will lead the charge to a more sustainable and resilient global economy. Businesses can build a future where sustainability and profitability coexist — and the time to act is now.
For more than 30 years, PARCEL has delivered the information and solutions 1000s of industry decision-makers want and need to help them handle, package, ship, and deliver more small packages, more efficiently, and more effectively from coast to coast, across the borders, and around the world. ARE YOU AND YOUR COLLEAGUES MISSING OUT? Sign up for a FREE SUBSCRIPTION today!
Greg Hewitt is CEO, DHL Express United States.
PUSHING THE AUTOMATION ENVELOPE IN THE PARCEL INDUSTRY
By Brad Radcliffe
There has been a flurry of automation activity in parcel over the past decade, and while some in the industry may have a bit of automation fatigue, we’ve only scratched the surface. Inside the four walls, most of the current parcel infrastructure is built around manual systems developed 30-40 years ago. Even though a number of companies have made an effort to automate key nodes in their networks, parcel is still dominated by a preponderance of outdated, manual systems. There are lots of opportunities for parcel operations to automate in the next decade. But what are they? And where do we start?
The Changing Dynamics of Parcel Shipping
Parcel distribution networks were built around a Pareto distribution system — a statistical concept, also known as the 80/20 rule, that posits that around 20% of customers or delivery locations generate about 80% of overall shipping volume. This principle allows operations to optimize logistics by focusing on those high-volume areas first.
Around 2020, the distribution Pareto shifted dramatically as the COVID-era e-commerce boom changed the makeup of what the parcel industry handles, with more small parcels and more large parcels — typically non-conveyables and non-sortables. A great example is exercise equipment that’s much too large for normal conveyor and sortation systems in distribution centers. Simply put,
this material mix was pushed through a funnel of warehouse infrastructure that wasn’t designed to handle it. As the number of non-conveyables increased from three percent to eight percent of packages, even newer facilities as little as 10 years old struggle to keep up with an influx of volume unable to be handled on existing automated systems. Take a facility designed to move 1,000 parcels per hour through the door. An influx of non-conveyable items could bring that throughput down to around 600, reducing capacity at a typical 60,000-parcel-per-hour facility to around 40,000-45,000 per hour.
New trends in packaging present their own difficulties. The shift from weight-based to volume-based charges has incentivized shippers to use efficient packaging, leading to a wider variety of packaging types, like polybags, jiffy bags, and flats, traveling on conveyors that may have only been designed with standard corrugate boxes in mind. This causes challenges for the parcel handling infrastructure and puts up another hurdle that makes it difficult to completely leave behind manual sortation.
The Upside and Downside of Trying New Approaches
At this point, the impact of Amazon on parcel goes without saying. Half of its business revolves around improving its own parcel network, but unlike other players, it is not tied to decades-old systems in hundreds of legacy facilities. Amazon builds its systems quickly, from the ground up, never ceasing to innovate.
Of course, not even the most successful businesses completely avoid mistakes along the way. But a “fail fast, fail often” philosophy — experiment, adopt what works, and move on from what doesn’t — enables faster progress beyond established ways of doing business. By contrast, companies with huge, established networks populated by legacy typically have near zero tolerance for experimentation. When a parcel carrier evaluates new automation technologies, it must weigh potential advantages against its network’s sensitivity and appetite for risk. If you’re operating an air hub where minutes matter, are you willing to risk introducing an unknown, unproven technology into your legacy operation? The challenge is finding a way to capitalize on new technologies without upsetting the applecart.
The Elusive ”Holy Grails” of Parcel Automation
Two major areas could be considered the holy grails of parcel automation, with various providers and technologies in hot pursuit of a solution. But the criticality of these processes and the risk-averse nature of parcel operations are real headwinds, to say nothing of the actual technology development necessary to provide viable solutions. The first is the loading and unloading of inbound and outbound trucks, which, in its current state, involves a lot of manual touches. This process feeds downstream systems and is also the first decision point that determines whether a parcel enters the system as a non-conveyable, a small,
or part of the regular mix — qualitative decisions that parcel handlers are asked to make now with greater frequency than in the past, and an added challenge for potential automation solutions. The second target is a solution to automate the sorting of packages to delivery vehicles in the proper sequence in which they’ll be unloaded on the delivery route. This process involves merging small packages, normal packages, and non-conveyables together at the load position.
These two tasks bookend the shipping process and a reliable automation solution remains elusive, due to the unpredictability and variety of the product mix and intense performance requirements. Given these challenges, operations looking to keep up with the changing parcel landscape concentrate most automation efforts elsewhere, mainly on processes up and downstream of the sorter, with a combination of more established technologies (robotics and so on). It’s just a matter of determining the best technology to make that happen and where in the process to apply it.
Where Automation Can Make the Most Impact
In parcel networks with many hubs, smaller facilities are typically last on the automation list. A boost at a small hub that moves volumes in the neighborhood of 4,000-10,000 parcels an hour is much less impactful than a boost at a larger hub that handles six times that volume, and that gulf in relative impact dictates a larger focus of automation efforts on medium and large hubs.
The next frontiers beyond medium and large hubs are first- and last-mile facilities. In fact, many of these facilities are dual purpose with both outbound and inbound flows. Unlike automation solutions targeting the “holy grail” applications listed previously, the technology for these applications is much more mature. That shows in two key ways: performance and cost. Rather than requiring one system for inbound and one for outbound, there are solutions to automate last-mile facilities that are now bidirectional, and there are
examples of facilities implementing these systems for a cost equal to or less than the manual-intensive sorting systems from 20 to 30 years ago.
Putting All the Pieces Together
Operating a high-volume, modern, automated facility is akin to being a maestro for an orchestra. Facilities are designed to work at a certain rate, and the biggest challenge is finding a way to balance unload, sort, and load so that everything flows properly and reliably. The key to making automation work is finding experienced leaders who can manage technologies to play their parts in the symphony and understand how their individual roles affect everyone up and down the line. In the current landscape, automation is not the complete solution. Building that complete solution requires a blend of technology and process to support your end goals.
Brad Radcliffe is Vice President, Parcel, FORTNA.
MAUREEN GOODSON AWARDED THE 2024 MEGAN J. BRENNAN AWARD
In January, Maureen Goodson was recognized as the recipient of the fourth annual Megan J. Brennan Award for Excellence in honor of her outstanding leadership in the logistics industry. This honor, bestowed by Women in Logistics and Delivery Services (WILDS), recognizes those women in the logistics, postal, and delivery industries who exhibit the leadership and collaborative traits for which Megan J. Brennan, the first (and, to date, only) woman to hold the position of Postmaster General, was so well-known. As the latest recipient of this prestigious honor, Goodson joins previous award winners Pritha Mehra, Tammy Whitcomb Hull, and Kate Muth. Goodson, the retiring National Postal Forum (NPF) CEO (how fitting we profile her in our NPF issue!), was recognized for her exceptional leadership in collaborating among industry, regulatory, and postal stakeholders. Goodson stated, “It is an honor to receive the fourth annual Megan J. Brennan Award of Excellence from the WILDS organization. To receive the award from an organization that epitomizes partnership and leadership in the industry, is
the most important award I could receive as I finish my 30-year career.”
Goodson began her tenure with NPF in 1996 after she left the banking industry. She jumped right in as Manager of Registration for the National Postal Forum’s bi-annual event. Since postal classification reform was being introduced at the time, the event in Anaheim was considered a can’t-miss for mailers. This was somewhat of a challenge for Goodson; she had never even been to a convention, let alone managed the registration and on-site attendance of 7,000 attendees! But she stepped up to the plate and certainly proved her mettle.
In 1998, she drew on her master’s in finance and became the Director of Finance for the forum, a position she held until she became the Executive Director of NPF in 2013. Over the next decade-plus, in partnership with the USPS and the NPF board of directors, she developed and executed a strategic vision that drove growth and improved operational efficiencies.
This resume demonstrates how she certainly met the award criteria, which
include appreciation for the employees of an organization, the ability to work collaboratively, and the desire to look at problems and opportunities holistically.
PMG Louis DeJoy concurred, stating, “It has been my pleasure to work with Maureen. Her dedication to providing postal customers with the best education and networking opportunities at the National Postal Forum has been of the highest caliber, and she has been a true partner in terms of providing the Postal Service the necessary tools and infrastructure to have successful Forums.”
Shoshana Grove, Chair of WILDS, agreed. “For more than three decades, Maureen has been the face of the National Postal Forum (NPF) for many of us. I have had the privilege of working with her both as a USPS program manager and as a private sector contributor. She has been the cornerstone of the event’s success year after year and has always supported WILDS participation in the event. Her warmth and dedication are unmatched — she seems to be everywhere at once. During her tenure, NPF has always provided an exceptional and engaging educational and networking experience for participants, while fostering customer loyalty to USPS. Maureen’s contributions to the Postal Service and our industry have been immeasurable.”
WILDS is a nonprofit organization created to promote women’s leadership in the postal, delivery, and logistics industries and to address the challenges women and minorities regularly face in these industries. For more information, visit www.shedelivers.org.
