E-commerce retailers are at their busiest between Thanksgiving and Christmas, as shoppers order gifts for family and friends — which means peak season is fast approaching.
During the peak season, retailers sell far more items than they do during the rest of the year. That puts pressure on the whole supply chain, from inventory to last-mile delivery, as goods travel faster and further than ever.
To be ready to serve peak-season customers, shippers need to make sure that they have enough inventory on hand or in production. That may require changes to manufacturing processes, warehouse facilities or warehouse staffing.
Then, once the peak season shipments are in the hands of shipping carriers, the impact of volume increases is compounded. Carriers have to move significantly more pieces during November and December than they do during the rest of the year, often with additional challenges from winter weather — and they have to do it at the same speeds and prices customers have come to expect.
Depending on their target market, retailers may experience additional peaks — back-to-school shopping, summer fun, or otherwise. Preparing for peak season should be a process tailored to your company’s schedule. However, since almost every seller experiences a peak simultaneously during the holidays, it’s important to be even further ahead during this time of year.
Challenges of Peak Season
Every link in the delivery chain is strained during peak season. Carriers have to move far more packages than they usually do, which requires them to hire additional drivers and fulfillment center staff. Orders are rushed, especially as Christmas or customers’ travel dates near, which requires accelerated last-mile delivery. Carriers may need to rent vehicles or find temporary warehouse space.
Carriers pass those costs on to shippers through holiday surcharges. Some of these accessorial fees target the largest and heaviest packages, which put the greatest strain on individual workers,trucks, and sorting equipment. Others apply small fees to every package, since each package puts a little more strain on the system. Either way, shipping gets much more expensive during the holidays. And that’s not the only pricing pressure shippers face. They have to invest in expanded production and warehouse capacity in the months leading up to the holidays.
Finally, retailers need to prioritize customer service more than ever during their busy season. Customers are stressed and rushed, and most are probably juggling orders from several online outlets. Friendly, efficient, straightforward customer service can make a buyer’s day in December.
Strategies to Prepare for Peak Season
Assess and plan ahead
There’s an old adage in business: “You can’t manage what you can’t measure.” Planning has to start with data. Review your fulfillment and shipping data from last year’s peak season: How efficiently was your warehouse organized? How quickly did packages travel through it, from receiving to stocking the inventory to shipping? How much did your carrier charge in large package and residential surcharges? How many of your parcels arrived at their destinations on time?
Your metrics will reveal what went right and what could be improved. Review it with a focus on optimizing your processes to eliminate unnecessary costs.
Next, perform a complete inventory. Once you know exactly what you have on hand, you can order additional products accordingly. If you have data sophisticated enough to understand how fast each of your products sells, then you may be able to optimize your inventory levels, keeping only what you need on the shelves while the rest is in production.
Finally, review your shipping contract. Shippers often say that they offer refunds for late deliveries except on certain blackout dates — and many of those blackout dates fall between Thanksgiving and Christmas (check out FedEx and UPS’s holiday schedules). Know when you’ll be able to claim refunds and when you will not.
Prepare and have trainings for moving parts
Lots of shipping-based businesses hire temporary workers for support during peak season. If you do, then make sure that you establish a relationship with a staffing provider well in advance of the season. Explain exactly what staffing levels you need and what your requirements are for each role.
Train your peak season team using abbreviated versions of existing training programs. Focus on safety and work processes. To whatever extent you can, keep long-term staff focused on more complex tasks, while assigning temporary workers to simple, repetitive ones that they can learn quickly. This leaves less room for mistakes.
Prepare and tune up equipment
Take inventory not just of your products, but of all your hardware and software. Test and repair items as needed, and make sure you have spare parts and protocols for what to do when something breaks. Buy or rent additional equipment if you need it to accommodate peak season volumes.
Peak season can also be a great time to invest in technological upgrades. If you want to gather more robust data about your operations this year, or if you want to try integrating additional robotics into your fulfillment centers, you may be able to deploy those technologies within a matter of weeks.
If you think your peak season inventory will be so large that it will exceed the boundaries of your facility, explore the possibility of adding temporary flex space using trailers or your truck yard.
Explore expedited transportation options
You may experience inventory lapses during peak season. Make sure you have a plan in place for what you’ll do if you’re suddenly running out of product. Explore service options with low transit times for every link in your supply chain, including air-sea, sea-air and team-driver trucking services, so you’ll know who to call if you need them.
Make sure your processes are equipped for last-minute changes, too. If a customer requests at the last minute that a package be shipped to his hotel guest services instead of his house, then your customer service team should know how to communicate that to your fulfillment team.
Consider alternative options in your supply chain
At warehouses, modify your shift structure to make your facility as productive as possible. Consider adding extra overlapping shifts to each day or making work weeks longer or shorter.
Additionally, consider cross docking, which allows you to unload, stage, and reload freight on truck beds without waiting for receiving and put-away. This keeps products from moving all the way into your facility, which can save crucial hours.
How Reveel can Help
Reveel’s services and expertise can help shippers of all sizes prepare for peak season. If you don’t already collect package-level data, our reporting and analytics tools can help. We can audit your invoices to make sure you’re getting the refunds your carrier owes you. We can even review your shipping contracts and help you identify changes you want to make in your next contract negotiation.
Get started today with a free invoice audit. It’s our holiday gift to you.
