Wonderment Guest Post: Use These Benchmarks to Decide on Your Next Fulfillment Center Location
If there’s one thing we all know to be true, it’s that people expect fast shipping. Any order that takes more than a few days to arrive can give us pre-parcel anxiety (yes, it’s a real term) and result in a negative experience with your brand. In fact, more than 50 percent of consumers surveyed felt retailers did not meet delivery speed expectations.
If you’re thinking about improving your time to delivery, one of the best choices is to start fulfilling orders out of a second location. A second fulfillment center gives you resilience to local shipping issues, like dramatic winter weather, and drastically speed up delivery times to different areas.
Even if your delivery speeds are within the normal, expected 2-to-3 day range on average, you may have customers in locations that do not experience fast shipping. Even a small subset of unhappy customers can cause support headaches or bad reviews.
Opening multiple locations is one of the key strategies Amazon and big box retailers use to offer two-day or better delivery to nearly the entire US, by fulfilling out of many locations in customer-dense areas and reducing fulfillment bottlenecks.
At Wonderment, we’ve collected shipping data on more than million of e-commerce orders and asked ourselves, what fulfillment location has the fastest delivery times?
To answer that question, we explored the impact of adding a fulfillment center in different cities to see how good the two to three-day delivery radius was out of a given metro area. We took our data from about half a million tracked shipments across the domestic US over the last month and plotted them out by their origin and destination cities based on their in-transit travel time.
With this analysis, we launched a free Shipping Speed Benchmarks app. We found some pretty interesting patterns in the best delivery time zones around different cities. Here’s what we discovered….
The Single Champion
Our customers that fulfill out of Kansas City, MO, have a gigantic delivery radius with great results.
They can cover the entire midwest and a lot of the western US with great delivery times. One of the patterns that emerged immediately was the direct cargo flights to large hubs. For example, seeing the spot of yellow around Los Angeles and Bakersfield makes it clear that a lot of packages are being routed directly to LA via air. The typical East Coast times are still five to six days for most deliveries, which isn’t great but acceptable. With the right carrier choices and a fulfillment center here, you can offer generally solid delivery times to the entire lower 48.
The Best Pairing
For the brands who have one facility, or who self-fulfill but are considering starting with a 3PL, the question turns to where the next facility should go. We looked at a lot of pairings to see what delivered the best nationwide coverage in our data and the results were pretty interesting:
Baltimore and Las Vegas gave the overall best map, if you have two facilities. Even better than NYC, Baltimore gave great coverage of the northeast and upper midwest and reliably average times into the southeast US.
Las Vegas does an excellent job of covering the west and southwest.
Between these two locations, you can offer great delivery times across the map, with the worst times in the southeast being well within a normal delivery time, and also offer great resilience to any local shipping disruptions.
Incidentally, Buffalo also offers great delivery times to the northeast and upper midwest, but with slightly worse performance to the south than Baltimore. You can also see the impact of direct cargo flights, with LA featuring great delivery times from a Buffalo center.
When thinking about which site to pick, you should also consider where your customers are as part of this – examining which states have concentrations of customers or are growing rapidly can help you identify the right opportunities here. Understanding your current fulfillment and delivery times by state is a critical step in improving your customer experience in shipping.
Want to know more? You can explore the results yourself on Wonderment’s data site.
Three short notes about how we calculated this map:
- We look at packages that started and ended in the lower 48 states, and origin cities where we have a critical mass of data. That is why some cities aren’t available as origins.
- This map is recalculated every night, so we will revisit and add more origin cities as our data grows.
- We wanted to show data across a large number of destinations, which requires the origin city’s data to have nationwide distribution of packages.
The speed shown is based on the in-transit time for 75% of the packages on route to the destination, defined as a 15-mile radius around the destination city, so that the typical customer experience is shown and slowest packages are excluded. Data from all carriers is mixed together here – the carrier is obviously critical to delivery time, but the delivery speed zones have a very similar pattern for each carrier, while the number of days may change a little. If you want to imagine what this looks like for the fastest vs slowest carriers, you can subtract a day or two from delivery time, but know that the pattern is very similar.
This is a guest post by Brian Whalley, cofounder of Wonderment, an order tracking platform that helps merchants get in control of the shipping customer experience. You can check out the new carrier delivery benchmarks or get their app for free on the Shopify App Store.