With summer approaching, companies are planning for summer shipping. In a previous post, we addressed the various options for temperature controlled shipping and other methods for keeping your products safe from the summer heat.
Many companies have a long established history of holding shipments until the Fall and have set customers expectations that no shipments will occur until the weather gets cooler. But this practice is quickly changing. More and more wineries are exploring options for summer shipping, weighing the risks and costs against the possibility of damage (and the cost of returns). And they are weighing those options in communication with their customers, in many cases putting the decision to hold or ship in their hands (along with the higher cost of heat-protected shipping solutions). What was once common practice is now a risk calculation for both parties.
On the one hand, delaying orders when the heat is too intense will prevent spoilage during shipping. However doing so may lead to cart abandonment (and less revenue) because newer customers may not be willing to wait for 4 months to get what they want. Remember, well known brands such as Amazon, Apple, and Zappos have trained the average eCommerce consumer to expect fast shipping and two-day delivery.
On the other hand, providing that “instant gratification” does come with a risk–but that risk landscape is changing. While there is some possibility that wine can be heat damaged during shipping over the summer months,the body of work over the last 5 years has yielded only a handful of instances of clients telling us that there has been heat damage, seepage or cork push.
Forward staging, FedEx Cold Chain, UPS Temp Control and ice pack shipping are all options available to wine shippers to prevent possible heat damage. This means that you can provide customers that instant gratification–especially for special occasions like an anniversary, a birthday or other special event.
So, though weather holds might be an ingrained practice, they should not be a “knee jerk” reaction to hot weather. The decision to do a weather hold should always be a calculated one. While not an ideal option, delayed shipping can reduce the cost of replacement in the event of heat spoilage and/or the cost of returns arriving back at the winery or fulfillment center. But those costs need to be measured against cost of lost opportunities that come with a weather hold.
To make such a calculated decision, you should consider:
How long will the weather hold need to be in effect? The longer a shipping delay, the more customers become impatient. While a delay of a day or two might not be a big deal, a delay of a month or more will be. You will need to determine whether your weather delay is likely to last a few days, or for most of the summer.
Have you promised a specific shipping window? Customers hate broken promises. It’s easy to lose potential repeat customers if you promise quick shipping at a certain rate, but then have to delay shipping the product to ensure quality. A contributing factor of wine club attrition is customers not getting the regular shipments they expect. In the end, keep your promise and if you can, exceed expectations. Communicate!
Have you built a “regular expectation” of delivery? Even if you don’t explicitly promise a shipment by a certain date, customers might nevertheless come to expect prompt shipments, especially if they have received them in the past. For example, if you have a wine club that delivers to members every quarter on or around the 15th of the month, it builds the expectation that every shipment will come on the 15th.… of every month. A weather hold can violate that expectation, even if you did not explicitly offer it.
What is your exposure if a product is shipped in a line haul truck? This starts to get down to the nitty-gritty of a weather hold calculation, specifically when moving larger volume. Shipping within a single zone might not expose your product to much risk; but shipping, say, from zone 2 to zone 8 will. If you know how much product is going to be shipped in an FTL or LTL shipment, you can estimate how much product can be potentially ruined. (Exact percentages will vary by wine and by route. But some estimates are that as much as 50% of a shipment can be ruined.) Sum the cost of the damaged product.
If a DTC delivery gets returned, how much would it cost you?A similar issue arises at the package level when considering DTC sales. The farther a DTC shipment needs to go on the ground, the longer it will be in a potentially hot UPS, FedEx, or GSO truck. In such cases, even wine that is technically not “ruined” might lose many of its characteristics and get sent back by the (now dissatisfied) customer. Sum the cost of replacing the product and shipping replacement orders–assuming, of course, that you are picking up the shipping costs for the replacement. (Multiple warehouse and staging facilities can mitigate this some, as products can be stored in a temperature controlled facility and then shipped via a shorter ground or air route.) But no matter what, remember that 2Day Air packages, 3 Day Air Packages and Ground/ Residential Delivery packages all have a shipment commitment by the end of that service’s business day.
What are the cost of the alternatives? There are alternatives to weather holds, of course: ice packs, Fedex cold ship, warehousing in multiple locations, and so on. We describe some of them here. Once you know the potential cost of lost or damaged inventory, you can compare this to the cost of these shipping alternatives.
Copper Peak Logistics specializes in shipping wine, food, nutraceuticals, and other temperature sensitive products. If you would like some help going through the calculations and seeing if a weather hold is the right move for your operation, contact us. We would be glad to help.