A letter from our CEO and co-founder
October 27, 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 few months have passed since I wrote my last letter in July.
It’s been nearly nine 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 quite a ways to go until it is behind us.
Total Coronavirus cases in the US are on the rise again with the majority of the states seeing a significant increase in daily reported cases, which has caused many states to shut down again or delayed their reopening plans.
We are closely monitoring how the economy and the ecommerce industry is reacting to this evolving environment, so that we can continue to stay ahead and provide you with all the information and the tools you need to have a successful holiday peak season.
While several players in this industry like Amazon have instituted quantity limits and storage restrictions for sellers across all categories on top of their impending storage increases in Q4, ShipBob will not restrict your storage capabilities or increase storage rates in Q4 2020.
For the majority of you, this holiday season is going to be an important milestone for your business. We realize this and are hard at work in making sure we plan to execute to the best of our capabilities. This is a partnership and we are in this together.
Below I outline recent updates, what we’ve been doing behind the scenes, and how we’re accelerating into peak season.
Our recent funding and what it means for our customers
As many of you have heard, ShipBob recently received our Series D round of funding from SoftBank Vision Fund 2 for $68 million (you can read my writeup here). SoftBank has invested in world-changing companies like Uber, Slack, ByteDance, Opendoor, Nvidia, Flipkart, Flexport, Doordash, and Arm, and we are very humbled to be in good company.
This new capital will enhance our capabilities to bring world-class fulfillment to our customers, hire across teams, scale our global fulfillment network, and invest more in providing a first-class merchant experience.
We continue to grow and opened seven new fulfillment centers since April, including two international locations, and plan to open at least two more domestic locations before December. We have hired over 300 additional fulfillment associates since July, in addition to several hundred more from March to July.
We will also continue to build out our platform that already integrates with nearly all leading ecommerce platforms and marketplaces, while we continue to add others like Square. More partners and integrations like returns management, inventory management, and financing solutions can be seen in our apps marketplace to provide you with a one-stop shop to manage your business, and we are just getting started there. As always, feel free to reply with where you are taking your business in 2021 and how we can continue to support your growth.
A look at our operations
Over the last few months, we’ve seen 120% more volume than our 2019 peak season volume. Throughout our six years of operations, we have never experienced an increase like this during the end of summer and early fall months.
With our outbound B2C fulfillment and receiving SLAs back to normal after our initial unanticipated surge in demand from the early months of COVID, we will try our best to not extend our SLAs for the holiday season. We want fulfillment to be a differentiator for you and your brand.
Process improvements and product enhancements
We’ve implemented a few new processes, capabilities, and resources to improve accuracy and visibility, including:
- We’ve increased our Merchant Experience team by 39 employees to provide you better support during these unprecedented times.
- 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.
- Our new sorting machines are scanning every single package. They are now live in three of our facilities, and we are working on getting them rolled out across out network.
- Our Marketplace and Apps store has several new integrations, including Wix, Cin7, Inventory Planner, Skubana, Loop Returns, Returnly, Happy Returns, and Kickpay.
- 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 are also showing each time the order SLA gets updated to provide more transparency to you.
- 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 and are working on the following safety measures as a means to prioritize employee safety and well-being:
- We are bringing in additional sanitizing equipment to allow for better cleaning of the iPods and scanners that employees wear while working.
- We have taken additional steps to ensure more social distancing in the break area by limiting the amount of chairs per table.
- We have ordered additional masks and gloves for the facility.
- We are working on options for new thermal scanning across our network.
- All associates within each fulfillment center are required to wear safety masks and gloves, and complete temperature checks before starting their shift.
- We’re adding even more signage throughout our buildings to remind employees how to reduce the spread of COVID-19.
- All meetings are in small groups of 10-15 to follow social distancing practices, but are still able to hear the message. At times, social distancing may not be feasible but that is the purpose of wearing the mandatory PPE.
- We’ve increased cleaning and disinfecting on surfaces across all fulfillment centers.
- We added Hazard Pay in March, which increases the effective wages for employees across our fulfillment network during this time period.
- Initially, we banned overtime to ensure our employees are getting enough rest and to allow time for other safety precautions to be put in place. As more information surfaced and additional protective measures were rolled out, we opened up overtime.
- We started offering KinderBob, a monthly child care stipend.
- We’ve given attendance bonuses and offered other perks to employees while keeping them safe.
- We launched the ShipBob Giving Fund to give to those experiencing financial hardship by unexpected tragedies. This fund has already raised $53,000 for those working through issues including schools shutting down, businesses closing, and health concerns. This fund will remain in perpetuity long after COVID-19 to support associates who need to bridge that financial gap through extreme situations. We have already provided over 75 grants in excess of $30,000.
Attendance initiatives and absenteeism over time
We have hired an average of 20 new fulfillment associates each week over the last several months to ramp up for Q4. We are solving for staffing challenges across our fulfillment network by offering the following incentives, which allow associates to earn up to an extra $5,000 per year:
- Added shift differentials for those working during off-hours.
- Extended hazard pay for our hourly staff.
- Offer KinderBob, a monthly child care stipend.
- Give attendance bonuses and offering other perks to employees while keeping them safe.
- Offer weekly incentives and larger monthly incentives, where employees have the opportunity to win PTO, ShipBob swag, Apple AirPods, gift cards, and more.
- New employees will be frontloaded with 2 days of sick time to assist in covering their time off, should they fall ill, have to test for COVID-19, etc.
Here’s a deeper dive into absenteeism averaged across our network in 2020:
- Pre-COVID: 4.4%
- April-June: 13.0%
- July-September: 7.5%
- October (to date): 6.1% (Our Bethlehem, PA facility is at 12.35% month to date)
Working with carriers
We continue to see carrier delays due to peak season volumes and staffing challenges associated with COVID-19. This is expected to increase over the next couple months. We created carriers.shipbob.com to provide you with transparency on how the carriers are performing.
Please refer to our holiday delivery cutoffs Help Center article for more information on shipping cutoffs during peak season.
What to expect this peak season
We’ve been crunching numbers and adding more staff, fulfillment centers, capacity, and automation to make sure this peak goes as smoothly as possible.
We really encourage you to read our holiday prep Help Center article to learn more about timelines, SLAs, holiday surcharges, cutoffs, and other best practices for the holiday season.
I will continue to be honest with you and give a transparent look into what we are doing. We are in this together and we look forward to a great holiday quarter with you.
Our fulfillment leadership team launched ShipBob’s Inside Logistics video series, allowing you to hear directly from our Chief Logistics Officer Todd Bills 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.
CEO of ShipBob