It’s the most wonderful time of the year!
. . . But maybe not always for shippers.
During the holiday season, we usually see tighter capacity and slightly higher rates as shipping volumes increase. This can lead to service failures, lost sales, and retailer chargebacks.
Service Failures Abound During Holiday Shipping
Heading into this holiday season, consumer demand has softened and inventory levels are higher than they’ve been in years. However, many consumers have cash to spend and are eager to splurge, despite their concerns about inflation. McKinsey’s latest Consumer Pulse Survey indicates 55 percent of Americans are excited to shop for the holidays and that 56 percent already started shopping in October.
Many consumer-packaged goods (CPG) brands rely on the holiday season for a decent chunk of their revenue. In turn, most ramp up their production and supply efforts during this time of year, meaning more freight orders will need to be fulfilled.
Because carriers limit their hours to accommodate drivers and families around the holidays, they must complete more hauls with less available service days. Most are also closed for Thanksgiving and operate on reduced hours the day before and after. The same goes for Christmas, which noticeably shrinks available capacity for your freight. To complicate the situation further, increased demand for freight services and increased orders during peak means carriers often overcommit.
This can lead to service failures as they scramble to cover the increased volume, which equals freight left on the dock, missed deliveries, lost sales, and retailer chargebacks. This is rather problematic when it comes to fulfilling POs, particularly during the busiest shopping season of the year.
Prepare Your Supply Chain for the Holidays
To combat peak disruption, we’ve put together six ways to prepare your supply chain for peak holiday disruption.
This is a major key to thriving during the holiday season. Understand your freight needs and determine the amount of freight you plan to ship. Then share that information with your transportation partners far in advance. This will allow you to lock in capacity and properly schedule freight pickups and deliveries.
2. Build in Extra Time
Waiting until the last minute is never a sound decision in the world of logistics, but it’s an even worse one during a holiday season facing limited capacity, weather delays, carrier issues, and other unforeseen seasonal events.
There’s nothing worse than having empty shelves leading up to Christmas. Zipline’s less-than-truckload experts recommend building in an additional two days of transit around your key dates in the holiday season. This provides an adequate buffer for problem-solving, if needed.
Additionally, if you fail to give your transportation partner ample lead time, you are bound to pay for it. Urgent holiday deliveries come with a substantial spike in rates and scarce capacity. Working ahead is one of the most important things you can do to keep costs down and hit delivery standards.
3. Know Carrier Holiday Service Schedules
Every carrier sets their own holiday schedule. Don’t get caught assuming a carrier is up and running when they may be taking time off. Many have limited operations leading up to and following a major holiday, meaning they may perform minimal line-haul services and very limited pickup and delivery services. A 3PL partner should help gather and share these operational deadlines on your behalf.
4. Prepare for Known Holiday Surcharges
Because of increased volumes and demand for quick turnaround, many parcel carriers automatically increase their rates during the holidays. This is particularly true for UPS and FedEx, who add peak charges from October to January. Budget for slightly higher parcel shipping costs to match the influx of holiday demand. Or like many shippers choose to do, move your larger volumes prior to the holiday peak.
If you have enough volume, you can also opt to move your parcel shipments over to LTL during holiday peak and surpass the increase in rates. Depending on your minimum order quantities, this could help you lock in savings.
5. Ensure Order Visibility
Track your shipments so you always know where your orders are during the hectic holiday shipping season.
Luckily, in today’s technology rich freight environment, you have numerous options:
· Add a pallet tracker to your shipments and follow along with updates.
· Request that drivers use GPS tracking.
· Ask your 3PL partner what visibility tools they have available. Zipline Logistics’ Summit platform shows you real-time updates from GPS trackers and communication with carriers.
6. Work with Retail Logistics Experts
Partnering with a logistics firm that understands the complex, nuanced world of retail shipping will drastically improve your chances of success during the holidays. A retail-specialized transportation partner can pair your freight with a vast network of preferred carriers that understand the delivery needs of the nation’s most challenging receivers.
Trusting Zipline Logistics = Holiday Shipping Success
Zipline Logistics is comprised of retail logistics experts who help CPG shippers master transportation into retail locations during the holidays. Our retail-trained operations teams and people-first culture help CPG shippers hit on-time delivery standards and achieve optimal outcomes.
Need help with your holiday shipping?
Andrew Lynch is President and co-founder of Zipline Logistics, an award-winning North American 3PL that specializes exclusively in the transportation of retail consumer goods. He works alongside clients ranging from some of the largest food and beverage businesses in the world to the brightest up-and-coming CPG brands in North America. Lynch and his team leverage data intelligence and strong industry relationships to help clients uncover transportation savings, build scalable supply chain strategies, and ace retailer compliance programs. Starting his career in carrier procurement and management within a Fortune 100 logistics company, Lynch has held positions of responsibility in all areas of third party logistics.