Shipping Operations 101: Everything Ecommerce Retailers Need to Know

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For ecommerce shoppers, the shipping process seems simple: they place their order, it’s mailed, and it’s delivered in a few days.

For ecommerce companies, the reality is much, much more complicated.

Depending on your products and how you run your ecommerce business, shipping operations can begin even before any orders are placed.

Then, from procurement to receiving to fulfillment to last-mile delivery, it takes an immense amount of operational logistics to make sure that the shipping process as a whole runs smoothly.

In this article, we will discuss what shipping operations are, how they work, their role in the ecommerce space, how ecommerce companies can optimize and improve their shipping operations, and how partnering up with ShipBob can help them scale and maximize their efforts.

What are shipping operations?

Shipping operations refer to the processes involved in transporting merchandise from one place to another. Most shipping operations can be classified as one of two types: freight shipping, and small parcel shipping.

To procure inventory form foreign suppliers, many ecommerce businesses rely on freight shipping. Because air freight is typically quite expensive, maritime transport of freight is the fallback for many brands.

Though there are many types of shipping in the maritime industry (including dry bulk shipping, short sea shipping, and tramp shipping), ecommerce procurement generally relies on container shipping, where bulk carriers and freight shipping companies transport goods or supplies across large oceans to the merchants who ordered them.

Shipping actual ecommerce orders, on the other hand, is a form of small parcel shipping. These orders are almost always shipped from a warehouse, distribution center, or fulfillment center to the end customer using local shippers or carriers.

Overall, both types of shipping operations involve a complex series of processes that need precise execution so that orders reach customers on time and undamaged.

Breaking down the main shipping operations

Although ecommerce shipping operations may seem straightforward at a glance, they go beyond getting products from one place to another. Complex fulfillment logistics, order management, and shipping processes are involved in getting orders to their final destination.

Here is a breakdown of the stages involved in small parcel shipping operations for a typical DTC ecommerce store.

Order receiving

In the first stage of the shipping operations, orders are received in a merchant’s warehouse.

The order receiving process involves accepting and logging orders as they are placed in your store, and getting them ready for processing. It’s also the stage where you ensure that there’s enough inventory in stock so that orders can be processed and then fulfilled.

This stage of your shipping operations needs to be extremely efficient and accurate. Orders must be quickly received, and stock availability should be automatically verified before they can be processed.

Order processing

Once orders are received in the warehouse, you can begin order processing.

This involves verifying order data such as delivery location and customer information to ensure accuracy. Depending on the scale of your operations, this stage may also involve determining the most strategic location in which to fulfill the order.

Having an automated order processing system in place can help you simplify the process. It allows you to combine your order receiving and processing by automatically receiving order information and verifying the data. This helps to get orders quickly into the fulfillment queue and reduces the need for manual order entry.

“ShipBob offers fast order processing, which is important when we’re getting hundreds of orders each day. We wouldn’t be able to fulfill the volume we’ve seen — up to nearly 13,000 orders per month — on our own.

We’ve had three holiday cycles with ShipBob, and the most recent Q4 was our smoothest yet. ShipBob’s customer service continues to improve with direct contacts that know our account, real-time follow through, and a better customer delivery experience.

We monitor the ShipBob dashboard on a daily basis, can view our fulfillment metrics at any time, and see if orders are fulfilled accurately.”

Manuel de la Cruz, CEO at Boie

Order fulfillment

The order fulfillment process begins as soon as orders are processed and confirmed.

Fulfillment starts with picking orders, where a picker is assigned a pick list of items to collect for fulfillment. They receive a packing slip containing all the details about the items, quantities, and storage locations.

The picker then locates the items and collects them from their respective locations. After orders are picked, they’re then taken to the packing area, where they’re packed in appropriate boxes to get them ready for shipment. This stage also includes any kitting and assembly that is necessary before final shipment.

Order shipping

The final stage of the ecommerce shipping operations involves shipping out the products from a warehouse or fulfillment center.

At this stage, shipping labels are generated and carriers are assigned to the order. Many 3PLs will compare prices between different shipping carriers and choose the best option for each order.

The carriers then pick up the shipments and transport them for last-mile delivery. Once orders are shipped, you will also receive tracking information that can be shared with your customers.

Practical ways to optimize your shipping operations

With your shipping operations playing a critical role in your overall supply chain, it’s important to constantly review and optimize them. Here are a few ways you can optimize the shipping logistics and operations of your ecommerce business.

Use automation

Ecommerce automation can make processes within your shipping operations much more efficient while increasing accuracy and decreasing labor requirements.

For instance, integrating an automated order processing system with your ecommerce store allows you to quickly receive and verify orders as they’re placed online.

This significantly reduces manual work while minimizing the risk of human error. It also ensures that orders go out the door faster because they’re automatically sent to the fulfillment queue soon after they come in.

You can also automate your shipping to easily generate shipping labels and find the best shipping carriers for each order. This creates a more efficient fulfillment process that allows for faster deliveries.

Get a warehouse management system

Warehouse management systems (or WMS) improve visibility and efficiency throughout warehouse operations, and subsequently in shipping.

A WMS tracks the inventory coming in and shipping out of your warehouse, and standardizes the storage and fulfillment processes to increase workflow efficiency.

A warehouse management system also improves warehouse productivity by reducing the need for rework. With barcode scanning and automatic updates, it helps you maintain accuracy in terms of picking and order counts. That means your team doesn’t have to waste time constantly recounting inventory or repackaging products.

“When trying to leave our old fulfillment network to return back to ShipBob, the fulfillment network had 1,500 units of missing inventory that they couldn’t find.

Because of a lack of ownership of the entire fulfillment stack, it’s been difficult to rectify, unlike with ShipBob who owns the entire stack: inventory and order management system, warehouse management system, and their fulfillment centers.”

Gerard Ecker, Founder & CEO of Ocean & Co.

Partner up with the right shipping carrier

Whether or not it’s fair, customers hold merchants responsible for last-mile delivery — its speed, cost, and overall experience. Because of this, it is extremely important that you partner with a shipping carrier that can meet key criteria.

Your shipping carrier should be highly reputable so that you can trust them to deliver orders on-time and in pristine condition.

They should also have the latest supply chain technology in place to integrate with your tech stack and give you better visibility into the order’s journey, even after it leaves your hands.

Some carriers can even pick up orders from a distributed network of fulfillment centers, and have multiple shipping options, including overnight, same-day, or even guaranteed delivery. Determine which shipping options are most important for your business, and compare rates between carriers to secure the best deal.

Distribute your inventory strategically

Dispatching orders from a single location can be inefficient, as some orders will be forced to travel much longer distances than others. Distributing your inventory across multiple warehouses or fulfillment centers can help speed up your shipping operations, as well as reduce the cost.

Storing inventory close to where your customers are means that orders can be fulfilled and shipped closer to customers. This significantly reduces the distance that an order must travel, which in turn reduces shipping costs and improves delivery times.

To find the most optimal locations to store inventory, assess past sales data and identify the most common order destinations. Some 3PLs like ShipBob will even have tools you can use to determine how to allocate inventory quantities across locations.

“We now save a lot of money and ship faster based on distributed inventory. So far, we are shipping out of two of ShipBob’s fulfillment centers. We use the ShipBob locations that optimize and reduce the distance traveled to get our products into our customers’ hands faster.

When shipping glass bottles, especially in the winter, the longer the transit time, the more likely it is to break. We see that our customers are getting their packages safer, with fewer frozen bottles exploding.”

Lindsay Louise, Fulfillment & Retail Manager at Synchro

How ShipBob can help you optimize your shipping operations

If you’re struggling to optimize your shipping operations, partnering with a 3PL like ShipBob can help.

ShipBob enables small to midsize ecommerce businesses to outsource all the warehousing and fulfillment aspects of their operations to help them save time, improve efficiency, and achieve faster, more affordable shipping.

Outsourced fulfillment and logistics

With ShipBob’s outsourced fulfillment service, you can leave complex fulfillment operations to the experts. This includes storing inventory, picking and packing orders, and shipping out orders.

With sophisticated technology and years of expertise, ShipBob makes this process as efficient and as accurate as possible to optimize the fulfillment experience.

ShipBob’s  proprietary WMS standardizes fulfillment across every one of our dozens of fulfillment centers, so that you achieve high-quality fulfillment and shipping no matter what facilities you use.

When you partner with ShipBob, the entire network of fulfillment centers is available to you — and with ShipBob’s inventory distribution tool, you can use historical order data to figure out which was the best location to utilize, and store your inventory accordingly to improve shipping operations.

Automation using fulfillment software

ShipBob has also invested in automations to further streamline shipping operations for every one of our customers. Order confirmation and processing are automated, which reduces the need for manual entry, minimizing the risk of errors and increasing order accuracy.

Each order is then automatically forwarded to the operating fulfillment center closest to its destination, and you are automatically sent tracking information for each order after it ships.

Use ShipBob’s WMS to improve shipping operations in your warehouse

ShipBob has a best-in-class warehouse management system (WMS) for brands that have their own warehouse and need help managing inventory in real time, reducing picking, packing, and shipping errors, and scaling with ease.

With ShipBob’s WMS, brands with their own warehouse can even leverage ShipBob’s fulfillment services in any of ShipBob’s fulfillment centers across the US, Canada, Europe, and Australia to improve cross-border shipping, reduce costs, and speed up deliveries.

Request WMS pricing here.

What is operator shipping?

The shipping operator is the carrier or entity that is responsible for transporting a shipment. This entity is often distinct from the shipowner, as shipowners often charter their vessels out to third-party operators. Operator shipping, therefore, is any shipping activity that a shipping operator performs.

Chartering can take many forms (including time charters and voyage charters), but ecommerce companies do not charter ships themselves. Rather, they use freight brokers or forwarders as intermediaries to procure inventory.

What are the types of shipping services?

The shipping industry contains many types of shipping services, including ground shipping, rail shipping, and cargo shipping (by air and sea). Different types of shipping will use different ship types (such as container ships, tankers, or smaller vessels), and impose different tariffs depending on destination and product types.

Who are the customers of shipping operations?

Beyond ecommerce shoppers and end consumers, the main entities that need shipping operations are ecommerce businesses, retail stores, and DTC and B2B brands.

Order fulfillment services

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Warehouse management

Have your own warehouse? Get ShipBob WMS to reduce mis-picks, save time, and improve productivity.

Global scalability

Grow into new geographies with ShipBob's international presence in the US, UK, EU, Canada, and Australia.

Written By:

Rachel is a Content Marketing Specialist at ShipBob, where she writes blog articles, eGuides, and other resources to help small business owners master their logistics.

Read all posts written by Rachel Hand