This year’s Amazon Prime Day, the company’s annual summer sale, will take place on July 15 and 16. In 2018, the sale lasted 36 hours and Amazon profited $4.2 billion, selling more than 100 million products. This year, profits are expected to increase with the sale lasting an additional 12 hours.
Prime Day’s trickle effect is big. Everyone from distribution centers to delivery drivers will have an increased workload. There will be more delivery trucks on the road, more packages shipped and more orders fulfilled than any other typical day. This increase in package fulfillment will have an impact on your shipping operations.
In fact, during the period following Prime Day 2018, there was a 9.2 percent increase in late deliveries above typical levels; from these late deliveries, there was an increase in tardiness by approximately eight hours–For many customers, eight hours feels more like a day. This impact was short lived, but it illustrates the potential impact upon the carrier networks, and the service you as a shipper may receive.
The carrier networks are just that–networks, and like all networks they have limits. As networks approach their limits, performance starts to degrade. In computer networks and distribution networks alike, when they are pushed to their capacity, performance slows for everyone in the network. Unlike the holiday season, there is not a large resource surge by the carriers to handle the increased demand placed on their networks from Prime Day. The result is slower parcel delivery and an increase in the likelihood of a package arriving late. Despite the increase in shipments, there’s no additional operational support provided for the execution of Amazon’s sale. For instance, carriers operate within interconnected systems of hubs or depots. This system connects nearly all domestic addresses and many global destinations that construct the network. These networked routes are travelled by a variety of transportation vehicles, and like any network, it has limits. As the demands of a network approach the limit, network performance degradation follows.
Carrier operations during extreme events like holidays and Prime Day challenges carrier networks by increasing parcel load to a point of saturation, resulting in the degradations described earlier. As a result, carriers’ priorities must shift during Prime Day and the days that follow. Each carrier will be impacted by the sale, including FedEx, UPS, regional carriers, courier services and Amazon’s own fleet.
Be prepared, as late deliveries during “Prime Season” will likely happen again this year. Although carriers now have a better idea of what to expect, the situation could become complicated and challenging with the landfall of tropical storm Barry. The combination of increased demand and storm-related regional disruptions will most certainly propagate throughout parcel networks, and heavily impact network-wide performance within the shipping world.
If your business sells products through Amazon, it is critical that you elevate your operations prior to Prime Day. Ensure inventory supply can support an order influx and that your warehouse is operationally prepared to fulfill orders in the speedy manner customers expect.
While this surge in U.S. parcels is not in your direct control, it is important that your business understands the effects of Prime Day on your operations. A partnership with a parcel-optimization leader like VeriShip provides your company with valuable industry insights to boost operational efficiency, and helps your business flourish in a time of epic parcel expectations.
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