Retention Chronicles Navigating E-Commerce Logistics: Insights on 3PLs, Carrier Changes, Section 321 Updates, and Tariffs & Duties in North America with Jesse Kaufman
On Retention Chronicles this week, Mariah Parsons spoke with Jesse Kaufman, CEO of Shipping Tree (now Kase), a third-party logistics (3PL) company for ecommerce brands. Kaufman discussed his experience growing Shipping Tree from its founding to managing thousands of orders daily. He highlighted the importance of diversifying shipping carriers due to recent changes at USPS that impacted DHL eCom, and the effects of Section 321 rule changes on import duties. Kaufman also addressed the psychological challenges brands may face when transitioning to a 3PL provider, emphasizing the need for trust and proper onboarding.
Episode Timestamps:
5:25 Challenges and Evolution of Shipping Tree
Jesse discusses the growth of Shipping Tree, from a small operation to fulfilling thousands of orders daily.
He highlights the challenges faced in the early days, such as managing inventory and fulfillment without dedicated technology.
Jesse emphasizes the importance of having a technological bridge between merchants and 3PLs, which was lacking in the early days.
He shares insights into the evolution of 3PLs and the varying quality of apps used by different 3PLs.
6:04 Transitioning to a 3PL and Overcoming Psychological Barriers
Mariah and Jesse discuss the psychological challenges brands face when transitioning to a 3PL, such as trusting a third party with their inventory.
Jesse explains how Shipping Tree helps brands overcome these challenges by providing peace of mind and ensuring proper QA processes.
They discuss the importance of founders evaluating 3PLs based on their systems and the level of care they show for brands and products.
Jesse mentions the role of references and third-party validation in helping founders make informed decisions about choosing a 3PL.
6:19 Minimum Order Volumes and Finding the Right 3PL
Mariah and Jesse discuss the minimum order volumes required by Shipping Tree, typically starting at 2000 orders per month.
Jesse advises founders to look for 3PLs that fit their needs, whether they are small, mom-and-pop operations or larger, more established 3PLs.
He highlights the importance of finding a 3PL that can grow with the brand and provides the necessary support and technology.
Jesse mentions resources like Twitter and Third Person, a company that helps match brands with 3PLs, to assist founders in finding the right partner.
23:33 Carrier Diversification and USPS Changes
Mariah and Jesse discuss the importance of carrier diversification in light of changes in the USPS's contract with DHL eCom.
Jesse explains how the USPS is canceling contracts with aggregators like DHL, which will affect the cost and delivery of packages.
He notes that while the impact on rates will not be significant, it is still important for brands to diversify their carriers.
Jesse shares how Shipping Tree's rate shopping tools help merchants find the cheapest options for their desired day in transit.
32:32 Impact of Section 321 Changes
Mariah and Jesse discuss the impact of the upcoming changes to Section 321, a NAFTA law that allowed brands to import products duty-free from Mexico or Canada.
Jesse explains how the Biden administration announced plans to close this loophole, which has led to a scramble among brands to find new solutions.
He notes that the President of Mexico recently stepped in to accelerate the timeline for these changes, adding urgency to the situation.
Jesse expresses his support for the changes, believing they will create more jobs in the US and benefit the country overall.