How SMEs can steer clear of the shipping shambles in the peak season 

Demand for air cargo will likely rise at a faster rate than the supply until 2022, UPS said.

A new digital tool, International Knowledge Base (IKB), uses artificial intelligence (AI) to help small and medium enterprises (SMEs) dodge shipping errors, in anticipation of an overwhelming surge in demand driven by the holiday season and the persisting strain in the supply chain, UPS said.

UPS Singapore and Malaysia Head of Marketing Vibhav Varshney said the demand surge will drive growth in express exports in Southeast Asia, particularly in Singapore and Malaysia, which are amongst the countries in the region to have the fastest-growing markets for e-commerce due to high mobile penetration.

Varshney said UPS anticipates the demand of air cargo capacity to outpace the supply of air cargo during the peak season up to the better half of 2022. As of October 2021, he noted that the passenger belly capacity, which traditionally contributed to nearly 50% of the air cargo capacity, is still 43% lower than in October 2019.

Bracing for the peak season

With UPS’ IKB, launched in November 2021, SMEs can better prepare for the peak season as it uses AI-based knowledge to learn a customer’s needs and help prevent shipping errors. For instance, the International Knowledge Base looks at past shipments to identify the products customers typically ship, and uses this as a guide to correctly identify the right tariff code. 

“This leads to fewer customs delays and accurately calculates all associated fees and taxes, so customers know exactly how much they’re paying,” Varshney told Retail Asia.

The IKB has a tariff code predictions feature that helps prevent shippers from making documentation errors when describing the contents of their shipment, leading to less risk of customs delays.

The tool also provides fully landed cost estimates, inclusive of duty, value-added tax amongst other charges; which is a top consideration of 72% of customers, based on UPS data. 

“It doesn't matter whether they are buying for themselves or for their businesses. They want to be able to see the full price before they actually reach the basket,” he said, adding that customers are also concerned about return policies early in the buying process.

He noted that providing a responsive, efficient, and easy return process is often underestimated, but pointed out that it is instrumental in creating customer satisfaction and loyalty.

Moreover, IKB has a denied party screening that tells shippers straight away if there is an issue with the location or the recipient of packages, preventing delivery failures, wasted time and reputational risk.

Varshney added that in Malaysia, UPS has been building partnerships to allow SMEs to gain easier access to its services. The logistics firm has so far partnered with retail chain Parcel Hub that has some 300 outlets across Malaysia and plans to replicate the same strategy in Singapore. 

“In addition to our scheduled pickup services, we hope that this extended retail footprint will really help the Malaysian SMBs to be able to access the UPS’ suite of services quite effortlessly,” he said.

On top of this, UPS provides support to businesses to ensure their compliance to regulatory requirements in terms of e-commerce transactions and is constantly updated on policy changes. Singapore, for instance, has made plans to impose a goods and services tax on e-commerce shipments, starting 2023.

He noted that providing a responsive, efficient, and easy return process is often underestimated, but pointed out that it is instrumental in creating customer satisfaction and loyalty.

UPS also provides services, such as “Follow My Package” technology, which allows consumers to track their package in real-time through a live map, and the “UPS My Choice” suite of solutions that grants consumers the flexibility to reschedule, or even redirect packages to another location.

SMEs, he said, should be agile to react faster to trends and respond more quickly to fluctuations in the supply chain.

“By addressing each of these they can address their customers' key concerns and growth not only during the peak season but also through the rest of the year,” Varshney said.

Further, UPS will become more accessible to merchants with the international rollout of the  Digital Access Programme (DAP), which  is an offering that integrates UPS services into e-commerce platforms and provides competitive shipping rates.

“From early next year, we will be rolling out our digital access program, or DAP, internationally, which has already been benefitting the customers in the US, thanks to its very simplified approach and platform,” he said. 

The program has allowed small businesses in the US to send orders in batches not just throughout the country, but also to over 20 countries. The DAP is currently in the early stages of its Asia Pacific launch.