A letter from our CEO and co-founder
May 7, 2020
Dear all ShipBob customers,
My thoughts are with you and your families as we all adjust to this new normal. I hope you’re staying safe and healthy.
I know these are uniquely uncertain times around the world, which is why I wanted to reach out to you directly, so we stay connected across our network. Universally – all of us – are undoubtedly dealing with pressures that reach deep into our personal and professional lives.
It’s in that spirit that I wanted to share with you some updates about what the 400+ team members at our ShipBob fulfillment centers have been doing for you, as we tackle the biggest and most disruptive crisis we’ve faced in our lives.
While other 3PLs have closed and Amazon has shut down its services for thousands of businesses, all eight of our fulfillment centers in the United States and Canada are fully operational. This stands for both essentials and non-essentials, as we know your business is essential to you.
To us, having our fulfillment centers operational to service our merchants and keeping our employees safe are one and the same goal. It is our top priority.
We are proud of the work the team has done to keep these priorities aligned and I wanted to share some of the work on this front, some of the challenges that we anticipate, and how we plan to get through them together.
1. How we are keeping our team safe:
Starting in early March, we instituted the following:
- Personal Protective Equipment (PPE): We fortunately ordered large quantities of PPE before the impact of Coronavirus was truly known for both our team members and everybody visiting our facilities (carrier partners, vendors, drivers). While there has been a shortage of PPE worldwide, we have been able to stay ahead of this and are well stocked today. Everybody entering the fulfillment centers are required to put on PPE at all times and all team members must complete a temperature check before entering our facilities.
- Attendance Policy: Most fulfillment centers and warehouses have attendance policies regarding days missed and other related activity, but we modified those policies to provide requisite flexibility, such as challenges with childcare or illness related to COVID-19.
- Hazard Pay: We increased the effective wages for all employees across our fulfillment network during this time.
- Fulfillment Management Stipend: We added a weekly stipend to each of our leaders within the fulfillment centers on top of their regular pay.
- Limited Overtime: Initially, we banned overtime to ensure our employees are getting enough rest. As more information has surfaced and additional protective measures were rolled out, we started opening up limited overtime.
Last and definitely not least:
- ShipBob Giving Fund: One of the items I am most proud of, we launched the ShipBob Giving Fund to support our fulfillment center team members through this. From ShipBob, our employees, and our partners, we have raised nearly $55,000 and provided nearly 75 grants to-date. If you would like to donate or share this with your network, please do so here.
We are so thankful to our team in the fulfillment centers who are risking their lives and the health of their families to support our thousands of merchants, their tens of thousands of employees, and the millions of people across the world who are receiving these essentials and other items from your stores.
For the latest updates, you can always visit us here.
2. Unique challenges we are seeing through this ecommerce surge during the COVID-19 Pandemic:
While people are mostly confined to their homes, ecommerce has truly stepped up to provide essentials, protective gear, food, and other items to people around the world. A decade’s worth of ecommerce growth has seemingly been condensed to a few months.
From our perspective, this has turned ecommerce into an essential business, globally.
A large number of you are seeing a massive spike in sales. As a network, we are seeing the resilience and innovation of brands like yours first hand.
Over the last few weeks across our network, we are seeing larger order volumes than Black Friday Cyber Monday, every day.
The difference being that during Black Friday Cyber Monday, we are able to prepare months in advance and flex up our fulfillment center headcount with both full-time and temporary hires. There are several large macro and internal factors at play affecting both full-time and temporary hires that we want to share.
With state shutdowns, we are seeing abnormally high levels of absenteeism across our network. The #1 reason here is due to schools and some daycare facilities not being available to working parents and guardians (this was one of the catalysts to us launching the aforementioned ShipBob Giving Fund).
We are hiring and on-boarding experienced staff quickly, while navigating the unexpected complications of unemployment benefits and Coronavirus-related stimulus packages that has slowed the hiring capabilities for thousands of businesses.
With regards to temporary workers, we are partners with a myriad of leading temporary worker agencies. They have helped us thrive during past Black Friday Cyber Monday spikes and other peak times, but they have also been hit hard with seasonal workers opting to not risk returning to work and the unemployment and stimulus situation we outlined briefly above.
Also, for almost the last 60 days, we paused all temporary work hires to reduce introducing new people into our facilities. Through our PPE and testing programs, we are evaluating this option, while we continue to hire.
I know this is a lot, but I find it important to share from a big picture standpoint as well.
3. How this impacts you as a merchant:
Some of this is covered above, but I find it important to reiterate.
Products we are prioritizing: Our priority in this current environment has been to ensure we always get essential products shipped as quickly as possible. We have shipped hundreds of thousands of masks, hand sanitizers, and gloves to first responders, healthcare workers, fulfillment center teams, and citizens around the world.
Also, as we listed above, between both essentials and non-essentials, we are still shipping 75% of all orders out within 1 day, 97% out in 2 days, and 99.7% out in 3 days.
Insights into our fulfillment center operations: To summarize the priority of operations inside the fulfillment centers:
- We prioritize outbound orders first. We do this so we can get your orders out as quickly as possible. We have increased our SLA for outbound orders from same-day pre-noon by two days, so you can set proper expectations with your customers. Non-essentials are included in this too, while companies like Amazon are shipping within 30-60 day timeframes.
- To prioritize outbound orders, we are pulling labor from our inbound dock and receiving stations. That way, we can have a full force of employees working outbound orders. While we are still staying within our SLAs for receiving, we are seeing some longer receiving times compared to the faster than usual receiving SLAs we provided earlier this year. To share our data, we are receiving 88% of all inbound products within 3 days and 99.4% within 5 days. 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, as mentioned above.
Carrier delays: Similar to ShipBob, many major carriers are seeing significant increase in volume. Currently, we are seeing this primarily with FedEx and DHL.
This has created a bottleneck in their distribution operations and centers as well, where they are at least a day or two behind their first scans. As we have investigated with our carrier partners, we have seen instances where the carriers are shipping to multiple sort facilities to ease the workload and improve throughput. This practice, known as load leveling, is causing several day delays in movement scans by the carrier, until they begin processing the packages.
As a result that could drive even more of a delay for orders to get to your customers and possibly create discrepancies in carrier tracking.
We are working daily with these carriers to increase their operational capacity and will update you as we learn more.
Lastly, I would be remiss if I didn’t call out the benefits of our scale of operations and our access to capital. This has allowed us to flex up and make these proactive changes and bear this additional burden of costs without passing any of them onto you.
We are leveraging our strong balance sheet to adjust our 2020 plans to address these changes. Your continued support during these times has meant the world to us and our entire ShipBob team of 400+ fulfillment employees.
4. How we are solving these challenges:
Everything we do at ShipBob starts with our people and that is how we have been and will continue attacking this.
We are hiring experienced fulfillment candidates across our entire network as quickly as possible. This means up to 100 or more people every month. We will continue at this pace for the foreseeable future.
To protect our existing and future team members, we have been purchasing PPE gear in bulk from a network of our partners. We will continue to purchase ample stock to support each fulfillment center across our network for months in advance.
After extensive conversations with our fulfillment leadership and team members on the floor, we have decided to modify our overtime policies, as we keep up with the surge in volume.
Also, we have created performance-based monetary bonuses based on levels of output at each node within our fulfillment centers. As we developed our own proprietary warehouse management system, we are able to analyze every aspect of our fulfillment operations, which has allowed us to roll out this performance perk in record time.
In regards to analytics, we have a data science team that forecasts and monitors volume in advance. With these unforeseen spikes in demand and certain brands really surging, please do reach out with all pertinent data through our forecast form.
We believe proactive transparency is the only way to operate. We will continue to share these updates with you and be as open as we can during these times without adding to everything else you are managing.
Nobody knows how COVID-19 and its consequences will play out, or for how long.
What I do know is that throughout this crisis I will always be honest with you.
Against this unsettling backdrop, it can be hard to see the positives. But they are there. Many of them. From people helping out their family, their friends, their neighbors, and their communitie. Those raising money for frontline workers or bringing food to the needy.
We have merchants who have given away hundreds of thousands of food items, masks, gloves, hand sanitizers, supplements, and more much.
Acts like that are what motivates me to support all of you and those in need.
I’ve been really humbled to see how all of you are responding to this unprecedented crisis. We look forward to continuing to support you and see your support through this.
Best, Dhruv Saxena CEO of ShipBob