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Chain Reaction: ShipBob’s Dhruv Saxena on Improving Logistics and Lowering Costs

Chain Reaction is Sourcing Journal’s discussion series with industry executives to get their take on today’s logistics challenges and learn about ways their company is working to keep the flow of goods moving. Here, Dhruv Saxena, CEO & co-founder of ShipBob, discusses how the company handles receiving, inventory storage, order processing, picking, packing, shipping and returns for thousands of brands across the globe.

Dhruv Saxena, CEO & co-founder, ShipBob Courtesy

Name: Dhruv Saxena

Title: CEO & Co-Founder

Company: ShipBob 

What are some of ShipBob’s offerings?

While ShipBob provides outsourced fulfillment, we’re so much more than a third-party logistics (3PL) provider. In fact, we’re a global omni fulfillment provider with locations in the United States, United Kingdom, European Union, Canada and Australia. We have built a horizontal platform to serve the widest range of industries and brands of all sizes, including health and beauty, accessories, health supplements, pet products and electronics.

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Additionally, we have a warehouse management system (WMS) for in-house fulfillment. If you fulfill orders in-house, ShipBob’s Merchant Plus solution lets you use our proprietary WMS—the same one we built and use across our global fulfillment network. It powers your warehouse, orders, inventory, transportation, returns, omnichannel connectivity and more, with accurate inventory tracking. Brands with their own warehouse can also tap into ShipBob’s global network if they want a larger geographic footprint.

What are some of ShipBob’s recent initiatives?

To reduce transit times and increase visibility for freight coming to the U.S. from China, we launched an end-to-end managed freight solution. Some of the solutions include an automated inventory distribution and goods transfers across ShipBob’s fulfillment network and our cross-docking service for unloading inbound goods and loading them directly onto outbound vehicles and ocean freight powered by Flexport’s Flow Direct program.

When it comes to supply chain logistics challenges, there are things companies can fix, and things that are beyond their control. How can the former help the latter?

From a supply chain perspective, a lot of challenges are controllable through data and planning. Things brands can fix include demand planning and inventory forecasting to run a capital-efficient business, improving conversion rates on their website by offering multiple shipping options, providing 2-day shipping badges and estimated delivery dates on both product and checkout pages and investing in inventory distribution across a network of fulfillment centers to ensure orders can get shipped from the closest warehouse.

However, not everything is controllable. One example that’s beyond a brand’s control is carrier delays. As we head into the peak season, we see this often where parts of the country are faced with severe weather conditions. You could do everything right, but if there is a weather delay in a certain part of the country, there might be order delays.

You can reduce the chance of this happening by having inventory in multiple fulfillment center locations so you can cover the rest of the country effectively. With carriers being overloaded during the peak season, it’s also a good idea to investigate diversifying your carrier mix to have backups in the case that one carrier can’t pick up from your fulfillment center.

What are the main things brands and retailers could do (or stop doing) right now that would immediately improve logistics?

The one big thing brands can do to improve their logistics—and potentially reduce costs—is focus their energy on demand planning and inventory forecasting. If brands and retailers could get better at identifying where their customers are located, what they’re buying and what the most popular SKUs in their catalog are, they could get smarter about managing inventory across the entire value chain—from manufacturing, to warehousing.

Getting the right balance between having too much capital tied up in inventory—as you can over-manufacture inventory by over-forecasting demand—or having products out of stock is tough. Both are real problems in scaling a brand and improving in this area is a fundamental challenge.

When it comes to creating efficiencies, there are quick wins and longer plays. What are a few things your company is doing to help its partners succeed on both fronts?

There are several tactics brands can implement, including expanding globally to tap into a wider customer base. For example, ShipBob’s global fulfillment network allows brands to take advantage of our global footprint to fulfill more orders domestically (to reduce transit times, shipping costs and delays at customs).

A longer-term play is constantly analyzing inventory and sales data to run a more effective supply chain.

What is your company doing to make the movement of goods more sustainable?

GreenBob is a ShipBob initiative that fully offsets all the carbon emitted from our headquarters and global fulfillment network. We achieved this through our partnership with Pachama and Ecocart to allow our merchants to offset the last-mile delivery of their shipments.

Are you optimistic about the state of supply chains in the next few years?

We are very optimistic. In fact, we are just starting to scratch the surface on how brands of all sizes and scale can use the power of data to help make better decisions on how to run a more efficient supply chain, reduce costs and provide a better customer experience.