Peak season is a time unlike any other in the logistics industry. An incredible amount of freight is on the move, capacity is strained tighter than ever, and challenges come fast and furious until the end of the year.
Even though peak doesn’t get rolling until the end of the calendar year, decisions you make as early as January and February can still determine whether peak is a successful season for you. With that in mind, here are some tips you can put into action sooner rather than later to help you prepare for peak season 2023.
1. Start planning for next year’s peak as soon as the current one ends. Conduct an internal review of your performance while it’s still fresh in your mind so you can identify successes and failures. This will help you lay the groundwork for next year’s plan so you can update processes where necessary.
Did any carriers stand out enough that you absolutely want to be sure they’re back in the fold next year? Or did any drop the ball enough that you’re ready to move on from them? How about your 3PL providers — who really stepped up to help you find that extra capacity, and who wasn’t up to the challenge? Were there any communication issues either internally or with any of your providers that could have or did cause delays?
When you have these questions answered, you’ll be able to contact high-performing providers as early as possible for next peak season. You’ll also give yourself enough time to address any process issues to improve your operational efficiency going forward.
2. Identify KPIs that matter for your customers. The most popular metric customers care about during peak season is usually on-time delivery, but there are a number of others to keep in mind as well.
On-time pick-up might be a major factor for you if your facilities operate at or near capacity, and it’s essential to keep product moving. Order accuracy is a big one during peak season, as your customers are more concerned than ever that they’ll have stock on hand to meet their customers’ needs. Some customers prioritize time in transit for a more holistic look at how responsive carriers are during a notoriously volatile season.
Whatever the most important KPIs are for your customers, incorporate them into your planning from the outset to be sure they get the service they need.
3. Work to anticipate demand as early as possible. Have conversations with your customer base throughout the year, to help gauge what your capacity needs might be for peak season itself.
This one can’t be done all at once at the beginning of the year. Instead, it will require careful attention to detail and a commitment to monitoring demand flows throughout the months leading up to peak season.
If you’re diligent about tracking this data and forecasting your demand, you’ll have the building blocks for a successful base plan for the season. Share this with both your customers and the carriers in your network as early as possible to get everyone on the same page and ensure you’re ready to hit the ground running.
4. Determine your capacity needs based on projected demand. As summer turns to fall, you should have increased confidence in your demand projections. Now it’s time to turn back to all that work you did at the beginning of the year, and start setting your peak season procurement in motion.
The carriers you identified as high performers in your previous year’s post-mortem should be your first calls as you line up capacity for the coming season. If you think your demand has gone up, ask them as soon as possible whether they can handle more freight.
Think you’ll need to expand your network to handle your holiday season volume? Then turn to your preferred third-party logistics provider or providers to help you source new, reliable carriers in the lanes you’ll need covered. And be sure to line up back-up capacity as well — peak season always throws you a few curveballs, and you don’t want your supply chain to break down if a driver can’t make it or a truck has mechanical issues.
The sooner you start thinking about your peak-season transportation needs and the more regularly you check in with your customers and your carriers, the more likely it is everyone involved will be aligned on goals and needs and prepared to execute a successful season. And remember — every peak season is a learning opportunity that can and should improve the following one.
Shawn McCloud is vice president of UPS operations, Coyote Logistics.
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