Buying patterns are changing and that’s changing demand when it comes to the timing of shipments. How is your business coping?
A recent Transport Topics article, “Online Surge Raises Questions About Delivery Network,” discussed how shopping patterns and online buying have changed seasonal shipping schedules and how different companies are coping with these changes. Everything seems to be speeding up in our lives, including the buying cycle, whether the buyer is an individual shopper or a company. The pattern now is to buy closer to need.
Big data and other analytics have enabled companies to anticipate their inventory needs in order to not have too much on hand after the season. The result is a huge increase in capacity needs for an extremely compressed period. Where transportation companies used to see big freight surges from late August through mid-October, that surge has declined to a few weeks. More companies find it easier to make products, big and small, available for pick up at their stores in an effort to reduce back room space and increase store frontage. This all adds up to big problems for shippers.
It got me wondering what midsize companies can do in order to not find themselves shortchanged when orders need to be delivered. If you had late deliveries due to no capacity, or if you found capacity, but paid more due to the cost being based on spot market rates, then you’ve fallen victim to that dreaded and growing holiday capacity crunch.
Sure, the reduction in fuel costs may have helped reduce some of the burden, but whatever you might have paid in increased shipping or, even worse, lost sales and unhappy customers, far outweighs the benefits of reduced fuel costs.
It’s not too soon to assess how transportation provider(s) performed and start to make shipping plans for Holiday 2016. You should ask yourself the following questions:
- How did your transportation provider(s) fare after Cyber Monday?
- Were they prepared for the late season capacity surge?
- Was your transportation provider available for your company’s shipping needs?
- Where did your company rank when it came to capacity availability?
- Were the bigger companies gobbling up available capacity to the point that your transportation network was running behind?
- Did you end up paying late delivery fees?
If you are unhappy with the answers to any of these questions, here are a few tips to help mitigate problems when next year’s holiday season comes around:
- Communication is invaluable, so meet with your provider(s) early, much earlier than ever before, and ask pointed questions to assess their capabilities.
- Request capacity commitments from your provider for the holiday seasons.
- Discuss the cost for surge shipments prior to the holiday and lock a rate in ahead of time.
- Have a backup carrier or broker that can help you pick up the slack.
These actions may not solve all of your holiday capacity and shipping problems, but it can certainly make you better prepared. Planning can help you turn the 2016 holiday season into happy holidays for your company.
You should be getting the best possible service from your transportation provider, not just during the holidays, but all year long.