Covid-19 pandemic hasn’t been kind towards most of the e-commerce companies.
However, amidst the pandemic, few companies came out as winners, Amazon being one of them.
After struggling during the pandemic’s initial days, this e-commerce giant soon adopted effective shipping and logistics strategies to manage the orders on time.
Amazon’s FBA Shipping: A Saving Grace for Sellers in the USA
Amazon is not only known for online retail business but also third-party logistics services. It is the biggest third-party logistics company in the world.
It connects the buyers and the sellers by acting as a catalyst. In critical times like the current pandemic, Amazon’s FBA shipping program proves to be a saving grace for the world.
When most logistics companies like UPS and FEDEX fail to meet the shipping demands, the FBA program works as a knight in shining armour for sellers in the USA.
How does the FBA Program work?
Fulfilment by Amazon helps the sellers by taking major logistics and shipping responsibilities away from them. Instead, Amazon takes care of storing, warehousing, packaging and shipping of the goods.
It uses one of the largest and strongest freight and logistics network to ship the good and deliver them on time. Apart from these basic services, it also takes care of returns, refunds and customer care services.
Sellers only have to ship their products to Amazon fulfilment centres. After that, the e-commerce company takes care of all the other things.
Pandemic Affects Shipping and Logistics Services:
The current pandemic is a nightmare for logistics companies. Due to the closing of borders, it has become challenging for them to ship the goods from one location to other.
To contain the Covid-19 virus, many countries are closing their borders. Due to international border closure, domestic warehouses and shippers like UPS and FEDEX have all seen increased delivery times and delays all around.
Internationally, container shortages have led to massive price increases in international freight costs and shipment delays and increased transit times. Shipping from China to USA had become quite difficult for the sellers due to these disruptions.
Amazon is not immune to this problem. The biggest problem for the company is shipping from China to USA. Most of the third-party sellers ship the products from China to Amazon fulfilment centres in the USA. However, as US COVID increased, Amazon warehouses restricted the quantity of inventory available for sellers to inbound. This further led to inventory shortages and delivery problems for both sellers and consumers.
Apart from shipping difficulties, there are many other hurdles like warehouse space shortage, low-level of inventory and lockdown restrictions.
All these problems lead to a delay in delivery. Because of these issues, Amazon has to pause the third-part logistics service for some time and postpone Prime Day.
Amazon Takes Extreme Measures to Support Third-Party Seller Amidst Pandemic:
The online retail king came up with emergency logistics strategies to support third-party sellers in the USA who depend on FBI shipping program to sell goods.
Here are some of the company’s measures to manage third-party freight logistics service amidst pandemic to support the sellers.
- Shipping Essential Items
Amazon came up with a policy to ship only the essential items. Due to a shortage of supply and high demand, the company provides priority shipping for certain products. Here are the products which the sellers can ship.
- Health & Household Goods
- Beauty & Personal Care Items
- Pet Supplies
- Industrial & Scientific Products
- Baby Products
- Investment in Safety Gears and Safety Measures
In order to meet the shipping and logistics demand, they are investing a considerable sum on money in internal testing facilities. All the workers are given safety gears to avoid contact and spreading of the virus. They are abiding by the health and safety laws and enhancing the safety measures to avoid any conflict within the US facilities, warehouses and centres.
- Boosting Fulfillment Capacity
To manage FBA shipping, Amazon is increasing the number of fulfilment centres, warehouses, workers, delivery stations, delivery trucks and drivers by 50%. It helps them to effectively provide logistics to all the sellers who use the FBA program.
- Hiring Workers and Expanding Packaging Facilities
As more and more people are ordering online goods, the demand is high, and the workforce is low. To avoid this problem, Amazon is constantly hiring new warehouse and delivery workers. Recently they have hired nearly 40,000 workers and introduced 220 additional packaging facilities to meet the growing demand.
- Leasing Cargo Aircraft
They are also leasing nearly 12 additional cargo aircraft to transport goods from one centre to another in the USA. It helps them to meet the deadline for the deliveries.
- Warehouse Management
Apart from all these measures, Amazon is using warehouse management strategies to stock up more products in the warehouses. Moreover, it helps them to utilize the space to store the products which the sellers ship.
- Inventory Management
They are also using inventory management strategies to meet customer demands. They help the sellers manage the inventory in the warehouse by placing restrictions on the production capacity.
- Expanding In-House Operations
Amazon solely relies on in-house operations during times like pandemic for shipping, transportation and delivery. It helps them to expand the services to meet the demands. They are changing the delivery days and providing product deliveries on Saturdays as well as Sundays. Moreover, to make sure the seller’s products reach on time.
- New Rules for Sellers
In order to cooperate with the third-party sellers, Amazon came up with new rules. They are providing help and support to the sellers by changing the algorithm and rules.
- Postponing Prime Day
On top of all these measures, they had taken an extreme measure to postpone Prime Day to October. It helped them to prepare for Prime Day delivery in advance. They gave all the sellers clear instructions to stock up the products. Moreover, follow contingency rules to meet Prime Day demand. All this hard work resulted in Prime Day being a success.
During the pandemic, the FBA program has been very beneficial for the sellers. With the help of millions of workers, air cargo services, shipping services and truck services. Moreover, Amazon keeps the sellers afloat by delivering their products on time and providing assistance.