Split shipments are a part of the supply chain management and operations and play an integral role in eCommerce logistics strategy. In this blog post, we will explore split shipment and discover why it is used in the supply chain.
When a customer purchases multiple products online, there are chances that the products could be shipped and delivered in multiple batches. This method of delivery is known as split shipment. Consequently, customers might receive different products at different dates and times even though they placed the order simultaneously. Split shipments most frequently occur when the items ordered come from different locations.
Let us discuss various aspects of split shipments.
Why are Shipments Split?
There are multiple reasons for splitting shipments. One reason is that the individual Stock Keeping Unit (SKU) where the products are stored has warehouses in different areas. Some products might be stored in warehouses, while others might be in the physical store. Consolidating the order will be time-consuming and expensive. Instead, they are shipped from their current location, thus saving time and money for the retailers and the customers. Furthermore, if the customer orders bulky products, they might not fit in one container. Also, sometimes some ordered products are immediately available while others are not.
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There are instances where the customers deliberately order split shipments, especially during holidays when they have to gift multiple people. They order the item and ship it to the intended person individually. The retailer can address this split shipment if they offer to ship gifts for the same locality together.
Can Packaging Cause Split Shipments?
Packaging is one of the causes of split shipments. The decision to split the shipments into multiple packages depends on the product size that the customer orders. For example, if the customer orders fragile items, they require considerably more packaging material and must be shipped carefully. In that case, the shipment carrying fragile items must be planned to ensure the package is not broken or damaged.
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Shipments also are cost dependent, so the cost of shipments depends on the dimensions of the package. The bulkier the package, the higher the cost of shipment. Alternatively, if the package is too small, it might be delayed or not packed properly.
Why and how do Retailers Avoid Split Shipments?
Increased shipping expenses are also a valid reason. The greater the number of shipments you send, the higher the cost for you or the customer. In countries such as the U.S., postal service fees depend on shipping zones, resulting in varying costs for the same destination.
Europe adopts a different carrier system. Within the EU, carriers often change when crossing borders, leading to higher fulfillment costs. Consequently, it may prove more economical to transport goods between Distribution Centers in different countries rather than fulfilling orders from one country’s DC to customers in another.
Reducing packaging waste poses a significant challenge, especially for environmentally conscious brands. While eco-friendly packaging strategies are available, shipping multiple packages contradicts the sustainability goals of such brands.
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Receiving multiple packages for a single order creates an unpleasant customer experience. It can be perplexing when separate packages arrive on different days. On the other hand, holding the order until all items are available for fulfillment is not an ideal solution either. The key lies in effectively managing customer expectations from the beginning. If an order needs to be split, informing the customer as early as possible will help set the right expectations.
The foremost rule is to maintain global inventory visibility, ensuring that the availability of all items ready for sale [ATS] is known at all times. It will enable the optimization of the supply chain in the following ways.
• Maintain Sufficient Inventory in Stock
With a top-tier Order Management System [OMS], you gain access to valuable insights about your current inventory levels and when it’s necessary to replenish your stock. Additionally, you can establish safety stock thresholds, optimize your operations, and reduce costs by fulfilling orders from the nearest locations to the customers.
• Merchandising to Reduce Split Shipments
Employ the best-in-class OMS to leverage its capabilities in recommending associated products on the Product Detail Page, all of which can be fulfilled from the very same location as the main item showcased. This approach lets you consolidate all the products at their origin, minimizing packaging and shipping expenses.
• Get to Know Your Customers
Upon understanding your customers’ purchasing patterns, you can adjust your inventory to cater to their demands. For example, if specific products are frequently bought together, you can bundle them to enhance the average order value. Alternatively, for repeat customers who consistently purchase the same product, it may be beneficial to introduce a subscription plan as an offering.
• Give Your Customers the Tools to Consolidate Their Purchases
Prominent retailers such as Amazon have effectively tested initiatives that allow customers to opt for receiving multiple orders at a later scheduled time. This approach significantly reduces packaging waste and the consumption of fossil fuels associated with transporting items from the retailer to the customer. For brands aiming to convey their commitment to social responsibility, this presents an excellent tactic to empower customers to make choices aligned with their beliefs rather than solely focusing on expedited two-day delivery.
Conclusion:
Split shipments might be a hassle, but it has benefits. For example, making sure that all the orders come in one shipment needs order consolidation, which can be expensive. Furthermore, if the products come in separate shipments, the customer gets some of the products faster. They will not have to wait for all the products to be available before they can be shipped. Split shipments have a significant impact on customers and retailers. So, the retailers must identify their target audience and customize their shipments accordingly.
About XPDEL:
XPDEL is a leading hi-tech provider of Fulfillment and Logistics Services on a mission to enable growth for eCommerce companies. We are futuristic in our vision and constantly work on creating technology that helps us meet customer expectations for today and tomorrow. We have a wide network of Fulfillment centers that enables us to efficiently handle nationwide delivery in the US – same day, next day, and 2-day delivery. Being closer to the end consumer, we deliver much faster than others.
