The holiday season from October through New Year’s Eve is typically the busiest time of year for companies with supply chains to manage. Everything from merchandise, gifts, food – you name it – is in high demand. As we continue to set new records each year with eCommerce holidays (Black Friday, Cyber Monday, Holiday Promos) for online purchases, constraints occur through the supply chain from raw materials and components all the way to last mile delivery. Keeping customers happy through this time is critical – as each purchase has a heightened expectation and importance for on-time delivery.
Shipping companies typically face surges in demand, causing constraints within the order fulfillment process. This is even more the case with COVID-19 in 2020. As ship times become delayed, it is important to work through various issues in your supply chain and ensure that you have solutions in place and take a more proactive approach.
FACTORS THAT IMPACT LOGISTICS DURING HOLIDAYS:
During the holidays, there are various factors that add to an already busy time of the year. This is even more the case in 2020 with the pandemic. Below we uncover a few factors that can impact your order fulfillment process:
Ever-Changing Consumer Habits
The convenience consumers receive from online shopping is primarily due to companies and their logistics divisions providing solutions to create the convenience. As more shoppers turn to online shopping, eCommerce order fulfillment increases the amount of transportation involved for arrival. Everything from inbound shipments arriving at a distribution center to last mile delivery creates more handling and points in the fulfillment process on your logistics team. Building out forecasts as well as varied plans to address demand shifts is critical – especially as consumers have rising expectation on delivery times and tie the delivery experience to their online review.
Shortages in Drivers
Baby Boomers represent the majority of truck drivers. We all appreciate the hard work and sacrifices they make to keep our country running and the supply chain moving. The problem is that many Baby Boomers are now retiring, creating a gap in the trucking industry. As more consumers purchase online, this creates more demand in transportation needs, while the number of drivers is shrinking. For your fulfillment needs, ensure you have a 3PL partner that has freight covered in-house and with an extensive freight-forwarding network.
Although some parts of the country do not have severe weather and snow storms, most of the country does have increased amounts of challenging weather systems that impact roads, create closures, and can cause delays in both air and ground shipping. Understanding that this can create hours and days of delay is critical in planning your strategic routes and ability to deliver on time.
In addition to the above issues with less truck drivers, increased storms, and the continual shift to online shopping – we have had (for the most part) a strong economy. Especially before COVID. With unemployment rates down and rises in consumer spending, this creates even strong demand for transportation given the amount of goods purchased. The combination of this with less supply of drivers and trucking capacity creates a crunch that can leave ill-prepared companies in a challenging spot while trying to deliver product to their ever-more impatient customer base.
How to Prepare Logistics Operations for the Holiday Season & Beyond
We covered the pain points that companies face – now we uncover some solutions! To properly address issues this holiday season and into next year, the below helps address common challenges companies face:
- A 3PL That Owns Their Own Trucking Fleet – having a fleet means that your 3PL company can deploy more resources where needed, react quicker, and leverage further partnerships for increased demand. Plus, this is one less step in the handling process which saves time and money.
- A 3PL with Carrier Relationships – multiple carrier relationships mean more options for a shipment to choose from, so you can get the best value from your 3PL provider as well as each shipment. If you have varied product and varied order quantities, this helps get the best value and cost on a per shipment basis. Once again, your P&L will thank you.
- Leverage spot markets – with the increased demand of truckload shipments, rates increase. To help with cost, spot quotes can give additional options in shipping if your regular partnerships cannot fulfill in time. Spot markets built on TMS platforms provide shippers more low-cost options during the busy season and provide alternative options for freight.
- The importance of Warehousing – choosing a 3PL provider that has a powerful WMS (warehouse management system), the ability to rack or stack, as well as process returns is especially important to your entire supply chain. Ensure that you can track inventory, place inventory where needed, and that the warehouse has the processes in place to reduce handling and pick and pack fast for expedient delivery.
Although some of the common challenges and solutions were identified here, each company is different. Your logistics division or 3PL partner should help guide you through the common challenges as well as ones that are specific to your business and customer base. NovEx Supply Chain can help guide you through this process and we are here to help. If you have any questions, please contact us at firstname.lastname@example.org. We are your order fulfillment and logistics partner.