Lucia Liskova, Content Editor at Calculates by Amasty shipping SaaS for e-commerce.
A New year, and new challenges. There are several changes upcoming in 2021 which we anticipate will affect the shipping industry.
Let's have a quick look at the major global trends and changes to expect in E-commerce shipping this year.
Whilst it is 2021, and the eco-friendly agenda is at the forefront of many industries, manufacturers can still be found putting orders into boxes often much larger than the product themselves, whilst wrapping them in excessive amounts of plastic packaging materials. Bad packaging is not only a danger to the environment but also increases pollution, plastic waste, and emissions for transportation. Not to mention that shipping unnecessary large packages increases your shipping costs as well.
Packages that are too big take too much space in the delivery vehicles, be it a truck, aircraft, or ship. Thus the carriers are loaded inefficiently, and oftentimes are shipping packages that are up to 80% air. Why, as a retailer would you pay for shipping air to your customers?
The reason to use Smart Packaging is to find an optimal package based on product dimensions for every order and request real-time rates from your carrier with package dimensions. This way retailers avoid using excessive packaging materials and can save money on shipping. Companies such as Arka, Lumi, Packhelp or LivingPackets offer optimal, customized, and biodegradable boxes to use for packaging. This gives retailers the option to save on their shipping costs and contribute to the protection of the environment. Not to mention, being eco-friendly is a great branding strategy for any online E-commerce.
Effect of Brexit on Shipping
The Brexit transition period formerly came to the end on the 31st of December 2020. What comes next for retailers importing or exporting from the UK?
Any E-commerce owner needs to expect an increase in landed costs in the upcoming year. Landed cost includes shipping cost, various taxes, customs duty, and value-added tax (VAT). The European Union will impose tariffs on anyone shipping to the UK. Another change is VAT. UK-based businesses will no longer be responsible for the collection of VAT on products sold to EU consumers, and EU-based businesses will not collect VAT on products sold to the UK. This could potentially make refunds harder or almost impossible to get. Furthermore, customers can expect longer delivery dates caused by stricter border control and random product pre-inspections on the UK borders. Retailers shipping to the UK after Brexit must prepare to obtain an EORI number, which is obligatory for any E-commerce company exporting or importing outside of the UK.
Increase in the USPS shipping rates
USPS is introducing new shipping prices on its shipping services. This change will take effect on January 24, 2021. USPS stated that proposed prices would raise shipping prices by around 3.5% for Priority Mail and 1.4% for Priority Mail Express. The change varies from product to product. According to USPS, the major changes were based on market conditions. For example, new prices will include an increase in the price of a Small Flat-Rate Box from $8.30 to $8.45.
Increase in the FedEx shipping rates
USPS is not the only carrier to increase its shipping rates. FedEx has announced some major changes as well. The first round of changes will take effect on January 18 and the rest is scheduled for February 1, 2021. The main change is in FedEx Express, FedEx Ground, and FedEx Freight surcharge. There will be changes on how additional Surcharges will be assessed, the introduction of High-Cost Service Area Surcharge, certain U.S. locations will be assessed an International Out-of-Delivery-Area Surcharge. Details on all the changes can be found on the official FedEx website.
The Federal Aviation Administration finalized the last details for operating unmanned drones, which could support more commercial delivery vehicles soon. The last changes in the rules indicated all drone operators must have remote pilots with certifications to be shown to the authorities if asked. The first drones to be permitted to fly according to the FAA will be small drones accompanying delivery vehicles, small drones flying short distances over people, and drones flying at night. Industry advocates stated that there are still many steps ahead of us before drone delivery can take off in the US.
Amazon, Google´s Alphabet, and UPS hope to deliver by drone soon. There have been around $1.7 million drones already registered.
One of the major recent shipping trends was to offer free shipping based on simple terms like a subtotal threshold. 2020 saw this trend boom. However, free shipping isn’t really free and someone needs to pay for it. The truth is that the majority of the small to medium-sized E-commerces can’t afford free shipping and they should find opportunities on how to involve free shipping within their business. In 2021 more and more customers are getting used to the idea of free shipping so online stores should be competitive.
The most innovative approach to free shipping was offered by Amazon. Their Prime subscription includes free shipping, which was launched as an experiment originally. In 2021 it already seems to be an ordinary service offered by an e-commerce giant. The idea can be picked up by large e-stores.
Dropshipping is thriving and is expected to have a compound annual growth rate of 28.8% by the end of 2025 according to Grand View Research. The market is expected to rise due to the high demand for online shopping. The dropshipping scheme allows for selling goods where the retailer doesn’t need to keep goods sold in stock. Thus, the retailer doesn’t need his own warehouse. It is worth researching this topic, reading some dropshipping guides for beginners or learning from dropshipping success stories.
International Shipping and Global Trading
The total value of the annual world shipping trade had reached more than $14 trillion in 2019, according to the International Chamber of Shipping. The term associated closely with international shipping is landed cost. Landed costs include all the costs involved in shipping across borders. Calculating landed cost depends on the country of export and import. Landed cost directly influences the profitability of your E-commerce business. No wonder, many online E-commerce companies turned to various shipping extensions and shipping plugins for help. Companies such as Calcurates helps to customize, display, and hide the landed costs depending on the country of origin or product description for more shipping flexibility. The whole process is automatized and is suitable for any E-commerce.
Accurate Delivery Dates
Even though customers are willing to wait longer for their shipments during difficult times, as we have seen through the pandemic, it is still important to display as accurate delivery dates as possible for your customers at the checkout. Displaying accurate delivery dates increases customers’ trust and satisfaction, it is transparent, efficient, and convenient for both retailer and client, saves time, and avoids delivery delays.
Shipping like Amazon
When it comes to shipping, few do it better than Amazon, making it almost impossible for anyone to step in. The key to their logistics is efficient interactions with thousands of sellers who use the service called Fulfillment by Amazon (FBA) to have their stock featured on the website. Amazon’s net sales in 2019 amounted to $280.05 bn, a figure primarily driven by e-retail sales according to Statista. No wonder many E-commerce retailers want to copy their strategy and ship like Amazon. As the Statista study shows, two of the most important reasons for e-shoppers to buy on Amazon is free shipping and fast delivery. Amazon further says that the most popular product category to be shipped is electronics.
The biggest changes to watch out for in shipping this year will include advances towards Smart Packaging and efforts to ensure packaging orders are completed in a sustainable and optimal manner, reducing waste and inefficiency. Following this, Brexit and its impact on shipping goods across borders will also be a change of some magnitude, whilst the growth in dropshipping, and the changes in the shipping prices of FedEx and USPS are also ones to watch.
Make sure your E-commerce is ready for all the changes coming in 2021. The bottom line here is to keep up and follow all the new trends to stay ahead of your competitors, remain profitable, and offer the best possible customer service. Try searching for shipping solutions like Calcurates on Magento which can help you to calculate, customize and display the real-time rates from major carriers, USPS and FedEx included, estimated delivery dates at the checkout, and much more.