COVID-19 and overwhelming consumer demand have made the upcoming holiday season difficult to predict and unlike anything the industry has experienced previously.
Consumer purchasing is spiking weeks earlier than historical levels, and increased demand for last-mile delivery has put pressure on capacity, service and pricing. A trending shift from “just in time” to “just in case” inventory management is further straining capacity as shippers order goods earlier and in greater quantities.
Partnerships with third-party logistics providers (3PLs) or managed logistics services can help shippers tackle some of these seasonal spikes. Opportunities and benefits might include:
Working with incumbents and loyal providers has proven to be a winning strategy in challenging markets to get access to capacity, retain quality service and minimize rate volatility.
The most successful shippers understand quick turn warehouse and transportation service is key during holiday peak season. Finding and keeping the right talent by increasing staffing during the season will maintain efficiency and productivity. Employ the right communication technology for desk-less employees in the warehouse so there is visibility across all functional areas of the business. It is crucial to increase the level of communication between groups.
High demand and COVID-19 have made finding warehouse space difficult, so buying and securing warehouse space well in advance of the holidays is important to ensure an efficient peak shipping season. It can be expensive, and demand is unpredictable, but forward-thinking companies are locking warehouse space well in advance to eliminate pain points in their supply chains. It would also be wise for 3PLs to consider consolidating truckloads across shippers to optimize capacity and reduce costs. Capacity typically eases up in Q1 following the end of the holiday season, however with continued COVID-19, supply chain delays and constraints along with low interest rates the marketplace unknown may make that different than previous market cycles.
Managing the transportation of food and beverage during peak season takes expertise on numerous levels. Planning, forecasting, capacity, driver knowledge, safety, quality, handling, performance delivery metrics and proper handling are all significant requirements of food and beverage. Be sure to rely on providers that have that expertise. Working with consistent 3PLs and capacity providers helps to ensure a great solution but may not always come at the lowest price. In these turbulent times and uncertain markets, it is critical to work with parties that can help you understand challenging conditions and navigate your freight.
Mark Derks is chief marketing officer at BlueGrace Logistics.
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