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3 key takeaways to reduce split shipments and eliminate unnecessary shipping expenses
Shipping trends

3 key takeaways to reduce split shipments and eliminate unnecessary shipping expenses

Versha Kamwal
March 16, 2023
mins read

Ecommerce is complex! There are numerous solutions for specific problems. But sometimes, some short-sighted solutions become a major pain for online brands as well as customers.

One of many such things is when a customer orders several products in one purchase and the order delivery blows their mind! Not because their package has arrived quickly but because some items are missing from the package. Now, customer anxiety is triggered!

In reality, the brand has not forgotten other items nor has the customer missed out while ordering—the other items are also on their way to the customer but through a different path. But instead of getting happy upon order delivery, the customer got confused—due to split shipments.

Let’s find out more about them in this blog, including what are split shipments, why are split shipments are used, the impact of split shipments and how to reduce split shipments.

What is a split shipment?

A split shipment is when a single online order containing multiple products is shipped in separate shipments to the same customer. As a result, the customer receives more than one package even though they placed a single order.

Split shipment

Why are split shipments used in ecommerce?

Shipping orders in separate shipments can happen due to the following reasons:

1. The products ordered are stored in different warehouses in different locations

Ecommerce brands often utilise a multi-warehousing strategy to enable faster order delivery and reduce shipping costs by splitting inventory in multiple fulfilment centres across the country. With inventory in various locations, each SKU may have differing stock levels across these fulfilment centres. If a single FC (fulfilment centre) doesn’t have all the products needed to fulfil a single order containing multiple products, different FCs are utilised.

So, rather than waiting on one FC to get more inventory, separate shipments from each fulfilment centre will be shipped to the customers ensuring faster delivery times.

2. The complete order with multiple items won’t fit in a single package

If an order containing multiple items won’t fit in one box, the order will be packed and shipped in two or more shipments. For example, a customer placed an order for a moisturiser, luggage bags (set of 2) and mascara.

So, instead of one gigantic box, the order will be split into two shipments; one box with the moisturiser and mascara and the second box for the luggage bags. Moreover, to prevent any in-transit damage, more room is required in the box for secure dunnage, especially when fragile items are shipped.

The impact of split shipments

Here are the reasons why ecommerce brands should aim to avoid split shipments because of their negative impact on the environment and profitability of the business itself:

1. Increases shipping costs

The more shipments you send, the more you have to spend on shipping costs—as you have to multiple shipments for a single order. Let’s take an example, a customer from Mumbai places an order of three products; a t-shirt, a pair of trousers and a belt. While the t-shirt is shipped from Maharashtra FC, the trousers and the belt are shipped from Haryana FC. So, where all the products could be shipped from one FC, multiple shipments are sent from various FCs to the same location. It will increase the shipping cost drastically, considering local shipping is used for t-shirt and national shipping is used for trousers and belt.

2. Increases packaging wastage and carbon footprint

Shipping items in multiple boxes is not at all a sustainable way of running a business. Split shipments mean more packaging material is being used which can be avoided as sustainability is top-of-mind for 60% of consumers’ purchase decisions. This means customers are inclined towards eco-friendly packaging options.

3. Ruins customer experience

Split shipments impact the customer experience to a great extent. If customers get half of their order one day and the second half after a few days, they may be confused as well as angry— as the wait is still not over. For instance, a customer ordered shampoo and conditioner. Getting one before the other has no significance in such scenarios. This can result in an increase in customer service inquiries, WISMO (where is my order) calls, and bad reviews.

How ecommerce brands can avoid split shipments?

Split shipments may be inevitable at times but you can prevent such scenarios and ensure it’s a rare event. Here’s how:

1. Use AI-powered inventory allocation

While forecasting demand accurately is next to impossible but by studying your historic trends and patterns, you can plan your production and inventory supply. This is critical for optimising your supply chain and reducing split shipments.

For example, Eshopbox’s actionable dashboard predicts your ideal inventory allocation based on consumer demand and historical data. It is done based on the following parameters without any manual effort.

  • Where are your customers located?
  • Which products are ordered by which zones?
  • Which products are frequently purchased together?
  • What are the purchasing trends of your customers?

Eshopbox then plans your ideal inventory distribution in its fulfilment centres spread across the country. This helps ecommerce brands to:

Inventory allocation by Eshopbox
Inventory allocation by Eshopbox

2. Leverage a robust Inventory Management System (IMS)

Keeping track of your inventory is fundamental for avoiding split shipments. You need an advanced Inventory Management System (IMS) just like Eshopbox’s that has the following features:

  • Complete visibility of inventory with item level traceability where you can choose inventory view by location, unit, volume and status for every sales channel
  • Real-time inventory updating across all sales channels when there’s a chance in inventory levels

Such an IMS will help you analyse and keep tighter control over your inventory to figure out:

  • How much inventory do you currently have on hand at each Eshopbox’s fulfilment centre?
  • How much money you would save on shipping if you changed the fulfilment centre location(s) of your inventory?
  • How your sales are affected by different seasons and peak season?
  • How your inventory levels will be affected if you run a flash sale or festive sale?
  • How much inventory do you need to establish standard inventory levels at all times and set reorder points?
  • How much safety stock do you need?

So, Eshopbox’s IMS will help you ensure that you have optimum inventory levels and particular SKUs at specific fulfilment centres to avoid split shipments.

3. Ensure on-time inventory replenishment

The last step in avoiding split shipments is to ensure that you never run out of inventory— specific SKUs at specific fulfilment centres. So, once you have set your reorder points, you need to restock it. For example, Eshopbox sends proactive replenishment reminders when you’re running low on inventory to avoid any chances of split shipments.

Wrapping up

Even though split shipments can’t be avoided entirely, you must make all the efforts to prevent them so your bottom line isn’t affected. Reducing split shipments will make order fulfilment more efficient, cost-effective and sustainable. By partnering with a 3PL like Eshopbox, you can optimise your supply chain, reduce split orders, and improve your profit margin in the long run.

Connect with our fulfilment expert today.

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