A letter from our CEO and co-founder
July 21, 2020
Dear all ShipBob customers,
I wanted to provide you with a transparent update and behind-the-scenes look at ShipBob operations now that a couple months have passed since I wrote my last letter in May.
It’s been nearly six months since we began preparing for the unknowns of the COVID-19 pandemic. While we’ve been able to adapt to this new normal, it looks like we have a long way to go until it is behind us.
Total Coronavirus cases in the US are on the rise and some states are going back into lockdown, closing again, and backtracking their reopening plans (including California where we have a fulfillment center).
ShipBob continues to plan and adapt as we see this pandemic will be here for a while. We make all changes and improvements with you, our customers, in mind.
We are closely monitoring how the economy and our industry are reacting, so we can allow you to stay ahead of your competition in your fulfillment execution and customer experience. For example, Amazon instituted quantity limits and storage restrictions for sellers across all categories on top of their impending storage increases in Q4.
Be assured that we will not be restricting your storage capabilities at ShipBob and we will not be increasing our storage rates in Q4 2020, which is when most of you rely on us most.
This is a partnership and we are in this together.
Below I outline what we’ve been doing behind the scenes and how we’re preparing for the holiday season.
A look at our operations
We have seen a 29% increase in order volume over the last 6 weeks as compared to our 2019 peak season. Throughout our six years of operations, we have never seen an increase like this during the summer months.
We are currently fulfilling over 97.2% of all orders within the same day and 99.99% of orders within our extended SLA (Expedited, Overnight, and 2-Day orders will continue to be fulfilled the same day). We are working to reduce this even more and hope to have an update on the fulfillment SLA going back to its original timeline for you soon.
Prioritization of tasks
Inside our fulfillment centers, we prioritize outbound orders first. We do this so we can get your orders out as quickly as possible. To prioritize outbound orders, we are pulling labor from our inbound dock and receiving stations, which includes returns. This way, we can have a full force of employees working outbound orders.
Even with pulling some labor from our inbound docks, we are still receiving 80% of all inbound shipments within 3 days and 99.9% within 5 days (our receiving SLA). We have been able to accomplish this because we have hired 287 fulfillment associates across our network since March.
Before COVID-19 hit, our average receiving time was 0.89 days across our entire network. We are working hard to get back to those timelines as quickly as possible by hiring additional staff.
Updates since my last letter
Here’s a glimpse at what’s changed:
- As mentioned, we have hired 287 fulfillment associates across our network since March.
- We reverted our extended COVID-19 inbound inventory receiving SLA back to the standard 5 business days.
- We reduced our extended COVID-19 fulfillment SLA for outbound shipments from being an additional 2 business days to 1 business day.
- We decided to share the impact of COVID-19 surcharges with you by absorbing all or a significant percentage of each surcharge ourselves, and we absorbed 100% of all surcharges for the first couple months they were in effect.
- Through the ShipBob Giving Fund, we have gifted over $30,000 to nearly 80 associates across our fulfillment network.
Process improvements and product enhancements
We’ve implemented a few new processes and capabilities to improve accuracy and visibility, including:
- Gaylord scanning (scanning all packages that are handed off from our packers to our carriers and creating chain of custody scans when gaylords are picked up by our carrier partners) to help us track when each shipment is picked up. We have found instances where a trailer was picked up by the carrier but not processed, and we were able to identify the issue and call the carrier to get the packages moving again. Soon this data will be displayed in the dashboard.
- Returns integrations: Happy Returns and Returnly are now integrated with ShipBob, allowing you to offer a more robust returns process. We have more returns platform integrations rolling out this month too.
- Fulfillment SLA badges were added to the dashboard so you can see at a glance if we’re hitting our SLAs and which orders are delayed.
- We’ve added a triple cubiscan process to ensure accuracy when scanning items at our fulfillment centers. Associates are now prompted to scan each item three times, and we will calculate the variance between scans. If the variance is larger than 0.75 inches, an additional scan will be required.
Employee safety and resource planning
Employee safety continues to be a top priority for us. We have implemented the following safety measures as a means to prioritize employee safety and well-being:
- We continue to pay hazard pay for all associates in our fulfillment centers, and we will continue to absorb these higher costs ourselves and not pass them onto you.
- Mandatory PPE (masks and gloves) has been in effect since March 12, 2020.
- We perform mandatory temperature checks for all employees, vendors, drivers, and others entering our facilities.
- We continue with our increased cleaning schedules at each fulfillment center with additional cleaners and shifts.
- We’ve placed markers on the floor for employees to stand on to ensure social distancing is practiced during pre-shift stretches and standup meetings.
- We’ve placed social distancing markers on the floor near time clocks so employees practice social distancing while waiting in line to clock in or out.
- Merchant visits across our fulfillment centers are still suspended to reduce unnecessary outside contact.
- We implemented a COVID-19 screening questionnaire for applicants and temporary employees to answer and pass before they are allowed to enter our premises.
- We suspended all non-essential company travel.
- We’ve staggered employee break times to limit the number of employees on break at any given time and allow for more space for employees while on break.
- We implemented a 30-day leave of absence program for employees who were either uncomfortable working or had on-going child care concerns.
- We implemented a modified attendance policy allowing associates to take time to care for themselves and their family members who were affected by COVID-19 that went into effect on March 12, 2020. We feel these are important safety measures and continue to absorb these costs ourselves to also help support our merchants during this tough time.
Attendance initiatives and absenteeism over time
We introduced new perfect attendance initiatives in May across all of our fulfillment centers, including weekly incentives and larger monthly incentives, where employees have the opportunity to win PTO, ShipBob swag, Apple AirPods, gift cards, and more.
Here’s a deeper dive into absenteeism averaged across our network since COVID-19 hit:
- February: 6.37%
- March 1-11 (before we put extended recovery policies into effect): 2.46%
- March 12-31 (after we modified our attendance policy to not penalize associates): 8.50%
- April: 11.70%
- May: 14.5%
- June: 12.75%
Working with carriers
All of our carrier partners continue to see a record number of shipments. We’re often seeing carriers experience the following scenarios, which has made everything from tracking orders to delivering packages on time more challenging:
- Carriers mark packages as delivered when they are actually still in transit.
- Carriers continue to use load leveling — the practice of shipping to multiple sort facilities to ease workload and improve throughput — which follows a less direct route and causes several day delays in movement scans by the carrier until they begin processing the packages.
- UPS Mail Innovations is shipping over 1 million packages per day MORE than 2019 peak season.
Planning for peak season
We are already crunching numbers and preparing to add more staff, fulfillment centers, capacity, and automation to make sure this coming peak goes as smoothly as possible. We will reach out in the coming months to ask for peak projections and give more updates so you can be prepared.
I will continue to be honest with you and give a transparent look into what we are doing. We are in this together and aim to be the best partner, so you can not just survive, but thrive in 2020.
Our fulfillment leadership team launched ShipBob’s Inside Logistics video series, allowing you to hear directly from our Chief Logistics Officer and VP of Operations on the latest news in logistics and how ShipBob is continuously adapting and innovating for you. We welcome you to watch those and let us know what you would like us to cover directly for you.
Like usual, we will continue to update our Coronavirus updates page and send emails and in-app notifications with new information.
Thank you again for partnering with ShipBob and trusting us during these challenging times for all.
Best, Dhruv Saxena CEO of ShipBob