RLA News & Views

UPS’ Potential Strike Highlights the Need for Carrier Diversity.

By Dan Nevin, Inmar

June 28, 2023

On June 16, unionized UPS workers authorized a strike and a potential work stoppage if UPS and Teamsters don’t reach an agreement before the expiration of their current contract on July 31, 2023.

As negotiations continue, it's important to note that authorizing a strike does not mean a walk-out is imminent. However, this is a wake-up call for many suppliers — particularly e-commerce and omnichannel retailers. Having enjoyed significant gains during pandemic lockdowns, many retailers have weathered supply chain disruptions in their forward and reverse supply lines. Yet a strike of this magnitude can bring the flow of goods – forward and reverse – to a screeching halt.

While we can’t predict the future, we can prepare for it.

Carrier diversity is one of the most essential elements within supply chain preparedness. Many retailers opt for a single carrier to get preferred rates. However, shipping rates become irrelevant if customers can’t receive or return orders.

Retailers must have alternatives well before supply chain disruptions – particularly on the returns side, or within their reverse logistics.

If you haven’t implemented a carrier diversity plan, it’s not too late.

Imagine you have an e-commerce shopper who wants to return an item and receive a refund. If you’re tied to a single carrier, in this case UPS, that customer might be stuck with zero options — and a bad taste in their mouth. Now, imagine this scenario multiplied hundreds or thousands of times. You’re likely to lose shoppers at unprecedented rates. Formerly loyal shoppers will take their business elsewhere, while potential new shoppers will be nonexistent. As a result, a customer’s lifetime value will diminish exponentially.

Amazon, the world’s largest retailer, already has carrier and process diversity built into its returns strategies. While outbound orders are shipped via Amazon-owned trucks, inbound returns may come from multiple carriers such as UPS or the USPS. But Amazon goes beyond carrier diversity for returns by providing in-store, self-service returns kiosks inside Whole Foods stores and other Amazon-owned properties. They also have a successful partnership with Kohl’s that offers Amazon customers a seamless, package-free, label-free returns experience.

It’s not just about reliability. Convenience is critical to the shopper experience.

You can diversify your carrier base and offer your customers a nationwide network of convenient drop off locations by leveraging the Inmar Returns Network. In-network retailers can offer their shoppers the ultimate convenience of dependable, package-free, label-free returns at any Inmar partner location.

In addition to providing shoppers a superior customer experience, retailers benefit by aggregating returns at each drop off location. The returns are then transported using excess capacity within existing shipping lanes. This decreases transportation requirements which reduces costs, the consumption of fossil fuels and greenhouse gas emissions. Eliminating the need for packaging and pre-printed labels makes this method even more sustainable and appealing.

The most prepared companies will likely increase their market share during these challenging times.

Many online retailers and reverse logistics companies may be feeling the heat generated by the potential threat of a UPS strike, but those with carrier and process diversity built into their supply chains will be poised to minimize disruptions.

Dan Nevin