Retailers and carrier companies have learnt from last year’s Christmas chaos caused by snow, so this year they plan on doing things differently.
With large areas of Scotland and the Northeast cut off for days or even weeks in the run-up to Christmas last year, it was hardly surprising that the non-arrival of gifts ordered online hit the headlines. The reality was not as bad as the media made out: most goods - some analysts suggest 99% - did arrive in time for Christmas and most stores stayed open, albeit with reduced footfall and burgeoning stocks.
It was, however, at significant cost.
As Andrew Starkey, delivery director at ecommerce trade body IMRG, puts it: “Everything with wheels was on the road last Christmas and fleet hire companies made a killing. Royal Mail alone spent £20m on additional staff, vehicle hire, extra trains and additional air freight.”
As with any traffic disruption, a major problem was trucks and trailers being in the wrong place at the wrong time - while some vehicles were snowed-in in Scotland, others were grid-locked in city centres due to abandoned cars. Many consignments were significantly delayed, but the retailers and distribution companies that kept customers informed and gave honest estimates of likely delivery dates at least managed to retain customer goodwill. “We put updates about delays on our website,” says Nick Fox, logistics and operations director at WDT, which owns brands including Firetrap, “but we will be more upfront about it if it happens again”.
An improved website means WDT can identify the location of its customers more easily and alert them accordingly by region. “Last year we couldn’t easily inform customers in affected regions about delayed deliveries when they placed their orders. Now we can make those details available and obvious to online shoppers,” he says, adding: “Stores were not an issue. We had fulfilled wholesale orders early and mid-season deliveries were completed in November, so inbound wasn’t a problem and the stores had stock. It was only online fulfilment that was difficult.”
Keeping things moving
For Tim Crowfoot, supply chain manager at Fat Face, inbound did present some problems, with ports closed due to snow. “We’re planning for inbound stocks to arrive a little earlier this year to avoid any problems,” he says. “With online orders, our third-party carrier was able to switch consignments to different distribution hubs to avoid those with serious backlogs.”
This is something many carriers have been working on this year. City Link, for example, has improved communications between its central and regional distribution hubs so that, in the event of disruption, parcels can be moved between hubs to avoid backlogs.
Ultimately, the company will stop collecting parcels for specific postcodes that are completely cut off. To keep its stockists informed it has also launched the My City Link feature on its website, which gives retailers virtual real-time visibility into consignment movements so any problems can be picked up immediately. It also means consumers can be alerted to delays with online orders, and call-centre staff can be kept informed in order to deal with queries.
“It helps if our stockists can share their demand forecasts with us so we have a better understanding of likely consignment traffic,” says City Link sales and marketing director Duncan Faithful.
Clipper Logistics also stresses the need for good communications. At the height of last year’s problems it was running daily conference calls between all its depot managers so everyone was informed of regional weather problems. Contingency plans were also put into effect. “We had a lot of Christmas hampers for Harvey Nichols to be delivered in Scotland,” says operations director Derek Hunt, “so we trunked them up to our East Kilbride depot [near Glasgow] and the local delivery manager took them out”.
Where possible, Clipper also switched to overnight deliveries, which helped its larger goods vehicles to avoid city streets that were gridlocked during the day. Each van was also equipped with a sack of gritting salt and a shovel, and vehicles were double-manned rather than sent out with a solitary driver.
Save and send
A common complaint last year was that parcels that had been posted first actually arrived last, as they became enmeshed in the backlog. Following IMRG’s extensive study of what happened last year, Starkey warns that not all carriers were entirely honest with retailers when it came to estimating the backlog. “Some carriers reasoned that, since the early stuff was already late, it would be better to get the new consignments out to avoid upsetting even more people,” he says.
“It is far better for retailers to keep online orders in their own warehouse until the situation improves.” An additional advantage is that, if the customer decides the delivery delay is too long and cancels the order, it is easier for merchandise to be put back into stock in good condition. Starkey also advises retailers to refuse orders from certain postcodes or regions if these areas are under snow. “It is better to lose an order than a customer,” he says, “and most shoppers will appreciate your honesty and buy from you in future”.
In emergencies, it is also important to be innovative and flexible. Carriers such as Hermes employ local agents to make ‘last-mile’ deliveries; as such, they were able to collect consignments from ad hoc drop-off points - such as pubs or community centres - and, if need be, make their deliveries on foot pushing a pram around the streets.
Switching to a new carrier at short notice in difficult times can be expensive, but MetaPack, which operates an online carrier management system, will soon launch a complete distribution system targeted at smaller retailers needing to send between 20 and 120 parcels a day.
MetaPack will work with about half a dozen carriers, aggregating total parcel volumes to give a more cost-effective rate that will also give independents greater flexibility to use alternative transport. “Retailers stick with one carrier because there is so much hassle involved in changing,” says MetaPack commercial director Steve Vass.
While home delivery is the major pre-Christmas issue for online retailers, keeping stores open and shelves filled during bad weather preoccupies the high street. Marks & Spencer is reluctant to give details of its plans for 2011 but was proactive in averting problems last year. With bad weather forecast, it increased the amounts of gritting salt shipped to its distribution centres by 50%, sent supplies of rock salt to its stores, and reached agreements with local farmers to lend snow plough support to rural distribution centres. It also added fleeces and thermal vests to the staff uniform ordering system.
“Our vehicle fleet had a £250,000 upgrade to make it more resistant to winter weather,” says an M&S spokesman, “and we had reserve vehicles placed across the country in the event of us needing additional transport capacity”. The result was minimal disruption to store stock levels and open access to stores with little risk of icy car parks or pavements.
Logistics firm DHL Supply Chain took a similar approach to keeping its own distribution centres snow-free, but development director Roger Burns also stresses the need to keep staff onside: “We have good staff relations so our people made every effort to get into work, but we also [tried to combat] anticipated problems by organising lift shares with employees who had 4x4s, and we monitored five-day weather forecasts so we could bring staff in to work overnight or draft in others for snow clearing,” he says.
Forward planning is vital to maintain staffing levels and ensure relief space is available to cope with overstocks or additional demand. As for the rest - gritting salt, fleeces, shovels, topping up bulk fuel tanks - as Derek Hunt at Clipper Logistics says: “It’s really just a matter of common sense.”