Interparcel warns SMEs on rising supply chain expenses

Australian logistics company Interparcel has revealed a significant increase in year-on-year supply chain costs which could impact small and medium-sized enterprises (SMEs) during the forthcoming busy business season.

The study indicated a 10.8% year-on-year rise in postal service charges and a 12% increase in shipping costs. Steve Zammit, CEO of Interparcel, emphasised the impacts of soaring fuel prices, labour market volatility, and increased warehouse costs on these figures.

The Australian Bureau of Statistics reported a significant rise in postal and courier costs over the past 12 months. These increased costs are affecting customer behaviour in the eCommerce sector.

"Major courier companies have invested in larger warehouses, distribution centres and technology to support and handle the growing demand in the eCommerce industry, ensuring they can keep up with rising parcel delivery volumes – but this comes with higher costs that are affecting customers," said Zammit.

Zammit warned that SMEs must become more efficient in their operations. "This means that SMEs need to get savvy with their operations now, more than ever. Businesses should run a business check every six months, with a bigger focus around processes and procedures, particularly in shipping."

To deal with increasing economic pressures within the shipping industry, Zammit offered five recommendations for eCommerce businesses to streamline processes and minimise costs.

The first recommendation is to offer more checkout options to reduce cart abandonment. "Offering customers choices at checkout is crucial for eCommerce businesses to help reduce the demanding issue of cart abandonment. After all the hard work to drive traffic to your website, whether through ads or influencers, the last thing you want is to lose a customer at checkout because you're only offering one shipping option," Zammit said.

He added, "For example, if a customer needs the product for the weekend or as a gift, it is highly likely they will abandon the cart if only standard shipping is available. Offering multiple shipping options like express or same-day delivery can prevent this."

The second tip involves using shipping technology to save time on routine tasks. Zammit stated, "The deployment and use of shipping technology enables businesses to focus on growth. Automating manual processes in particular can free up more time for other business priorities. At Interparcel, we've been helping small and medium-sized businesses operate efficiently for 15 years and we're seeing a lot of retailers are still doing work manually, such as creating shipping labels and preparing orders for pickup. However, this can all be automated, saving time and reducing errors. Our platform allows you to import orders, select courier services, process labels, and update customers with tracking information."

Regular health checks on business processes also form part of Zammit's advice.

"There's a lot that businesses can control, one of which is performing regular health checks every six months. Implementing simple improvements such as re-organising your warehouse can make a big difference in time management. For example, if your most frequently bought items are stored in the back, re-arrange them so these are closer to the dispatch area to save time. Small adjustments like this, combined with efficient shipping management, can have a major impact on the business and the post-purchase experience for your customers," stated Zammit.

Considering customer delivery preferences is also crucial, according to Zammit. "Without offering these critical choices, you risk losing sales. At Interparcel, we provide technology that allows businesses to offer calculated rates at checkout for platforms such as Shopify and WooCommerce.

"This ensures that customers have options, such as Australia Post for standard delivery, or have other alternatives such as Fedex Express or StarTrack for express deliveries. It's important to consider your customer preferences as some may prefer CouriersPlease because they know drivers could deliver at certain times, while others may prefer using Australia Post parcel lockers due to busier schedules," he explained.

Zammit also suggests leveraging international shipping to stay competitive. "One strategy businesses can implement to help maintain competitiveness is exploring international markets. We're seeing a huge demand for Australian eCommerce products, especially in New Zealand and the USA.

"Setting up your business to ship internationally is straightforward and relatively competitive compared with shipping domestically. Shipping to New Zealand, for example, often takes the same time as shipping within Australia. This can open up new revenue streams for businesses, especially in times of rising costs."