The long and unpredictable peak shipping season continues to challenge supply chains. A 2021 Peak Shipping Season survey conducted by Edelman Intelligence found hiring to be a strong concern among supply chain decision makers with 90% having a strong need to increase hiring to account for peak season and beyond. Approximately 73% of respondents cited progress in omnichannel improvements over the past year, but express cautious optimism for their company’s supply chain and capacity. 94% of supply chain decision makers note that partnerships with supply chain/logistics companies are necessary to get through peak season successfully. These findings reflect a growing consensus in the value of managed services and increasing trucking efficiency. To help shippers navigate peak season, we’re covering what’s happening in the market and tips to stay successful through disruption.
What’s Happening in the Peak Shipping Season Market?
A few factors impacting peak shipping season this year include:
- A longer peak season. This is not the usual peak season, and it started much earlier than in 2020.
- Higher freight volumes. Stronger freight volumes are expected as pent-up demand from consumers, retailers, and manufacturers reaches an apex. People are venturing out more, and there is above-average e-commerce activity.
- Tight capacity and high rates. Shrinking capacity from higher freight volumes results in higher rates throughout peak season and beyond. Capacity constraints in truckload and parcel have created spillover into the LTL market, resulting in a need for more peak shipping season surcharges and costs. Port backlogs and cargo limitations are undermining efficiency while warehouse and storage space remain challenging. Fuel costs are rising, and the infrastructure bill has finally passed. The end result of this confluence is higher costs.
- Longer transit times. Higher rates impact much more than simple landed spend. Higher costs mean a need for strategic advantages. Shippers are thinking about better use of multimodal shipping, managed services, and consolidation.
- Peak season surcharges. During times of peak demand, carriers often implement peak season surcharges (PSS). These variable PSS costs help carriers cover increased operational costs and manage freight volumes efficiently. They may be applied at any time of year, but are more common during the holiday season. That changed in early-to-mid 2020 when peak surcharges went into effect to accommodate the e-commerce surge and higher freight volumes.
6 Tips For Shippers During Peak Season and Beyond
- Prioritize freight by gaining insight into inventory needs, distribution network, and consolidation opportunities.
- Plan ahead with transportation providers to account for longer tender lead times, changing conditions, and limited capacity.
- Leverage regional networks to reduce reliance on national parcel, truckload and LTL carriers to create access to more capacity.
- Leverage technology and data to optimize transportation across all activities. Automate manual processes and utilize the visibility a TMS provides to pinpoint trouble spots and make data-driven decisions.
- Gain shipper-of-choice status to secure reliable capacity, which strengthens and adds resiliency to your network. Avoid extra surcharges for DC delays and operational inefficiencies that create challenges for carriers.
- Create a turnkey strategy to scale your operations through managed transportation services. By providing centralized control tower support over your entire transportation network, managed transportation providers become an extension of your team creating and executing a custom supply chain plan for your unique business needs so you can focus on growing your business and driving customer experience levels.
Mitigate Disruption this Peak Season and Beyond
With so much at stake in the busiest peak season in history, shippers need solutions to scale operations and optimize all movements in a volatile market. Connect with a GlobalTranz expert to learn more about custom solutions that help mitigate disruption this peak season and beyond.