Since the spring of 2020, the logistics landscape has been ever-changing with one unexpected challenge after another. Now shippers and carriers are about to enter the busiest time of year— peak season. With the right 3PL to help navigate these complexities, your peak season can be a success.
What Is Peak Season?
Although holiday sales typically reach their highest point during November and December, shoppers start earlier every year. According to the National Retail Federation, at least 40% of consumers are starting their holiday shopping by the end of October in 2021.
Retail peak season also overlaps with produce season, which lasts through the end of summer. At this time, capacity is strained, especially for refrigerated trucks and qualified drivers.
What does this mean for the supply chain? To be ready for holiday shoppers and accommodate the end of produce season, peak season actually starts in August and lasts through December. Unique challenges in the current market could result in an even longer peak season in 2021.
Roadblocks to the Ultimate Customer Experience This Holiday Season
Peak season brings a number of logistical challenges that can be difficult to navigate. Typically, shippers know to prepare for peak season, but 2021 is likely to be more complex than ever.
The Ultimate Customer Experience for 2021 Holiday Season
The five days around Thanksgiving, including Black Friday and Cyber Monday, present a unique challenge to logistics. They are some of the busiest shopping days of the year both in stores and online. Retailers must be ready with inventory on shelves and in fulfillment centers.
Overall, sourcing inventory and strategic logistical preparations have a big impact on customer experience. Customers have so many options, especially when it comes to e-commerce, that retailers are hard pressed to compete for those holiday purchases. Having inventory in place, as well as clear systems for shipping and returns, allows retailers to provide a more meaningful and enjoyable customer experience.
Consumer Shift to E-commerce
In 2020, e-commerce skyrocketed in popularity with consumers unable or unwilling to utilize brick and mortar stores. The rise in shipments to individuals put a strain on carriers who currently lack sufficient drivers and, in some cases, trailers. The driver shortage continues to be an issue logistics professionals must navigate.
One unexpected factor in peak season logistics is returns. Last year, returns accounted for about 13% of sales. In 2019, the majority of consumers who returned items also purchased additional products at the retailer. As a consequence, shippers and retailers have to be prepared for this second spike in business at the end of peak season.
Domino Effect of COVID-19
Supply chain issues have arisen throughout the COVID-19 pandemic. The pandemic forced temporary closures of manufacturing facilities. Once they were able to start back up, there was a shortage of shipping materials. Shipping rates increased for some routes, and congestion increased at international ports and rail terminals.
Suez Canal Blockage and Other Unexpected Events
Aside from the pandemic, a number of unexpected disruptions have affected the supply chain. Extreme weather events, highway closures, and the Suez Canal blockage interrupted manufacturing and shipping to the point that the typical slow season didn’t occur in 2020.
3 Ways the Right 3PL Can Ease the Burden of Peak Season
Undoubtedly, peak season brings its share of burdens to parties across the supply chain, but you don’t need to navigate them alone. The right third-party logistics (3PL) company can take the weight off your shoulders. Here are just a few of the ways a 3PL can help you make the 2021 peak season a success:
- Technological capabilities to improve visibility.
- Warehousing capabilities and strategies you can implement.
- Transportation cost savings with flexible, multi-modal networks.
Technological capabilities to improve visibility
A 3PL should be prepared to provide visibility at every level of the supply chain. You’ll always be able to locate freight. At First Call Logistics, we take a two-pronged approach to ensure shipping and carrier visibility.
Given how high volatility has been in the trucking industry, shipping visibility is crucial for maintaining control. Even the ability to alert customers to shipping delays can make or break the customer experience. By being able to track shipments at all stages, you can proactively prevent delays and manage disruptions. First Call Logistics uses Kleinschmidt’s transportation management platform to keep you informed from end to end.
Likewise, carrier visibility is crucial for mitigating issues along the supply chain. At First Call Logistics, we use Project44 to ensure carrier visibility. It allows us to nail down more accurate ETAs and increase carrier visibility through constantly sharing accurate data.
Warehousing capabilities and strategies you can implement
Warehousing capacity is challenging many companies. In addition to space for inventory, shippers and carriers are finding themselves short on space to load and unload freight. This causes congestion for truck drivers and, inevitably, shipping delays.
The right 3PL can help you implement a distributed warehouse strategy. First Call Logistics can distribute your company’s inventory across multiple distribution centers. This has the advantage of additional pickups and keeping inventory closer to customers.
Cross-docking is another benefit of working with the right 3PL. It can increase shipping speed by decreasing time in transit—and lead to additional cost savings. Cross-docking allows orders to be fulfilled to order rather than sorted and distributed in bulk. By limiting the square footage needed for your facilities, cross-docking optimizes space. This strategy also ensures that customers receive their orders faster.
Transportation cost savings with flexible, multi-modal networks
The right 3PL can go beyond increasing visibility and warehouse capabilities to saving costs on transportation. Given the current driver shortage, it’s difficult to hire qualified truck drivers. A 3PL can help pair your business with carriers who have the capacity for your needs.
Businesses navigating today’s supply chain should consider a less than truckload (LTL) strategy. Through LTL, a 3PL can schedule multiple companies’ freight on the same truck to save shippers money. First Call Logistics has various LTL services available.
The right 3PL has access to multi-modal networks that can handle freight coming in by ship, truck, or train. Having this flexibility ultimately helps reduce disruptions.
Like the industries it serves, logistics has busier and slower seasons. Without a doubt, retail peak season affects every part of the supply chain. Wherever you are on the supply chain, a 3PL can make your peak season a success.
Stay Ahead of Peak Season Challenges with First Call Logistics
At First Call Logistics, we approach our customers’ supply chain and logistics needs differently. Well-versed in the challenges that peak season can bring, our team will work to create a strategy that ensures your products are delivered on time safely. Ready to learn how First Call can support your business this peak season? Contact us today!