Are you ready for peak holiday season 2023?
After 30-plus years of devising transportation solutions for peak season, I know it’s not strange to start asking that question at the beginning of the summer. Business professionals need to start now to make sure they have the production and transportation solutions in place to guarantee a peak holiday season that operates as smoothly as possible despite the inherent volatility of today’s disruptive age.
The season really starts in the spring with your forecast and demand planning processes. You already need to understand your potential peak season volumes and demands. Then, examine your supply base and manufacturing capacity to make sure you can generate the volumes needed. Without sufficient inventory, you have nothing to sell.
And if you order product for peak season too late, your enterprise will end up paying for air shipping – a very expensive, profit-killing solution.
While the past does not predict the future, understanding what happened last year can be a guide. What were your problems in 2022? Could you meet all customer demand? Did you have inventory or production or transportation capacity issues? What issue or issues hindered delivery to your customers during last year’s peak season? And what is different about this year that will force you to adjust?
From there, you need to make sure you have the right freight forwarding setup for ocean, drayage and inland, inbound transportation. Do you have multiple forwarders in place, or at least a forwarder who knows how to work across other forwarders to secure capacity? What about a freight forwarding backup?
Remember, during the height of peak season, virtually every other North American company is going to be grabbing capacity wherever they can, whether product is inbound from freight forwarders, outbound to clients and businesses or heading directly to customers.
This is also where visibility comes in. Your transportation managers need to know where your product is at all times across your end-to-end supply chain. That’s the only way they can take action to fix problems as they arise.
Personally, I like a model where a transportation provider sits on top of all freight forwarders and steamship vessels to source the best capacity at the best rates. Such providers optimize your transportation for the best lanes at the best costs. And if, for example, your container gets bumped from one steamship, your provider can source another ship or freight forwarder so you do not have to wait a week – or more – for your product to arrive in the U.S.
For outbound solutions, a transportation capacity analysis can help you prepare for periods when capacity tightens and increased demand skyrockets spot rates. This “outside your walls” look gives you the data to decide where to lock in line haul contract rates and eliminate overspend. In addition, higher levels of service this year will help you retain and grow your customer base in 2024.
Remember, the three biggest peak season pitfalls are transportation delays, not having the needed transportation capacity and not having the right amount of inventory. I would love to discuss how your enterprise can start now and forge solutions that will head off those problems before they come to pass.
Chief Operating Officer Mike Royster has over 30 years’ experience managing Logistics and Distribution on a global basis for companies like Ingersoll Rand/Trane, Eaton Corporation, and XPO Logistics. Mike now leads Tompkins Ventures’ global logistics and consulting practices. Reach him at [email protected].