Introduction
As we move closer to the peak retail season, shippers must be ready to handle increased volumes, higher costs, and tighter deadlines. The 2023 holiday season saw a 3.8% increase in sales, reaching a record $964.4 billion, according to the National Retail Federation. With similar growth expected this year, it’s crucial for shippers to start planning now to meet demand and avoid costly disruptions.
In addition, with diesel prices hovering around $4 per gallon, as highlighted in our September Economic Insights White Paper, controlling transportation expenses is more important than ever.
Evaluate Carrier Performance from Last Year
Your transportation efficiency during the peak season often hinges on carrier performance. It’s important to reflect on past seasons to identify strengths and weaknesses. Key areas to assess include:
- Delivery Speed: Which carriers offered the fastest delivery times?
- Cost Fluctuations: Were there unexpected rate hikes or fuel surcharges during peak periods?
- Reliability: Did certain carriers struggle with meeting promised delivery windows?
Analyzing this data will help you select the most efficient and cost-effective partners for the upcoming season.
Pre-Book Freight to Secure Capacity
As demand for freight services skyrockets during peak retail season, transportation capacity becomes limited, and the costs can soar.
To mitigate this:
- Secure Capacity Early: Pre-booking trucks well ahead of time ensures you avoid the last-minute scramble for transportation.
- Work with Freight Brokers: A reliable freight broker can help you access a wide network of carriers, ensuring capacity even during the busiest times
Optimize Your Transportation Routes
Shipping during the peak season often requires the most direct and efficient routes possible to meet tight deadlines. Consider implementing the following:
- Route Optimization Tools: Invest in software that can dynamically adjust routes based on traffic, weather, and other real-time factors to cut down on delivery times.
- Multiple Drop Locations: Consolidating shipments to several nearby locations can help reduce overall transit time and costs
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Prepare for Increased Shipping Costs
With increased demand comes higher shipping costs. Peak season surcharges, fuel price fluctuations, and capacity limitations will likely raise your transportation expenses. To manage this:
- Set Realistic Budgets: Plan for higher costs and allocate extra funds for potential rate hikes, especially during the busiest weeks
- Use Multiple Carriers: Consider diversifying your carrier base to mitigate the risk of relying on just one provider, which could lead to bottlenecks and inflated costs if demand spikes.
Partner with Specialized Carriers for Last-Mile Delivery
Last-mile delivery becomes particularly critical during the retail season as customers expect quick and precise deliveries. Working with specialized carriers can give you the edge:
- Leverage Local Carriers: Engage regional carriers to speed up final-mile delivery, especially in high-density urban areas.
- Use Technology for Visibility: Ensure real-time tracking is available to provide customers with accurate delivery windows, reducing WISMO (“Where Is My Order?”) calls and boosting customer satisfaction.
Plan for Cross-Border Shipments
If your retail season includes cross-border shipments, special care is needed to avoid delays at customs. Key considerations include:
- Customs Clearance: Work with carriers experienced in cross-border shipping to handle the necessary paperwork and compliance
- Cross-Border Capacity: Make sure you have secured capacity early, as international routes often face even greater demand spikes during the peak season.
Conclusion
Transportation is the backbone of a successful retail season, and the ability to meet demand while controlling costs is essential for shippers. By analyzing carrier performance, securing freight capacity early, optimizing routes, and preparing for cost increases, you’ll be well-positioned to thrive during the busiest time of the year.
For customized transportation solutions that will help your business succeed this peak season, contact MFW today.