Holiday Logistics Ramp-Up
The busiest time of year for retail sales will soon be upon us. Logistics during the holiday season requires a significant amount of planning. If shippers are not currently prepared, they may already be too late. Product inventories are being increased as early as August of each year in preparation for the coming rush. For products arriving from overseas on container ships – early summer is when things heat up.
Nineteen percent of consumers begin their holiday shopping in October and 40% are holiday shopping during November. The average consumer plans to spend $804 for gifts and this number climbs steadily each year.
Large retailers are already moving products into warehouses and reviewing/finalizing contracts with large fleets. The sharp increase in the volume of retail products being moved in the next few months is staggering. It is “all hands on deck” for companies looking to capitalize during this strong, but brief uptick in the economy.
Where are my trucks?
Shipping around the holidays creates a significant amount of traffic, so it’s important to keep in mind the international holidays as well. Top of mind is Thanksgiving, Black Friday, Hanukkah, Kwanzaa and Christmas.
If your business depends on trucks to move your products to distribution centers or retail locations, I recommend that you keep constant communication with your transportation management team during the next few months. Often they are lured away from routine shipments to help support large retailers with their increased capacity needs during the holiday rush. It is a very lucrative time for carriers who are in high demand a few short weeks.
Amazon/UPS Drop the Ball in 2013
Remember the big Amazon/UPS debacle from 2013? Many packages did not make it to their destination as promised. Frankly, Amazon sold more products then projected and UPS and other carriers could not handle the excess. They have shipped more packages in subsequent years and have not had service failures as they did during Christmas of 2013. That is mainly because of Amazon deciding to take more of a lead in response to the increased demand and securing more truck capacity then in the past.
UPS and Fed-Ex contract heavily with outside carriers prior to the holidays for extra truck capacity. They both work with large trucking companies to gain line haul support in order to move thousands of extra loads from service center to service center. The trucking companies send a good portion of their fleet over to support the package carriers.
During this time, routine shippers may have trouble securing trucks for their normal operation.
That is why the constant communication between shippers and their carriers is imperative in understanding and reassuring capacity concerns.
Things to Bear in Mind When Planning for Holiday Uptick
- Be Proactive – Stay in constant contact with your 3PL. Have everyone on the same page and send out your forecasting to everyone who has a part in your success. “All Hands On Deck”
- Go Over Last Years Mistakes and Key Wins – Compile a list of previous years takeaways. Going over the things you could have done better is an effective way to avoid making the same mistakes this year.
- Be Flexible – As you may know one of our Core Values is to Embrace Chaos and we strongly encourage vendors, shippers, and carriers to do the same; especially during the holiday shipping season. By constantly communicating with your 3PL and handling your shipments early, you can avoid most last minute issues.
- Have a Plan B – Effective supply chain execution is the difference between getting products to customers on time. Make sure you have a Plan B and are able to execute it as soon as you notice any issues with Plan A!
Shippers – there is no need to fear.
There are still many solutions to get your products delivered to the destination during the busy holiday season. I recommend that you begin a business relationship with a 3PL if you have not already. You need to begin and foster this relationship as soon as possible because they too, will be called upon heavily during the holiday season.
3PLs have access to thousands of carriers across the country that can be called upon with short notice to transport your products to their destination.
Working with a 3PL anytime of the year will improve your bottom line, but if there is any time that we urge shippers to utilize the resources of a third party logistics provider – it’s the holiday season!
Is your business ready?