As the delta variant provides an added layer of uncertainty throughout the world, experts frantically search for solutions as peak season shipping 2021 approaches. The second half of 2020 featured new growth and unprecedented demand in the world’s economy that has yet to slow and will continue to grow as peak season approaches in 2021. Supply chain professionals face disruptions that affect delivery in the final mile because of limited available capacity, warehouse stresses, depleted inventory, and other strenuous circumstances. Navigating peak season shipping 2021 will prove to be the biggest challenge for logistics professionals around the globe.
1. Disruption Will Only Continue
Although the world continues to reopen, the effects of the pandemic linger. Disruption in delivery times due to ongoing delays in every method of transportation will continue through the season. The list of disruptions faced by supply chain managers is vast. The rapid rise of e-commerce, ever-growing consumer demand, a lack of consistent capacity due to driver shortages, natural disasters, and other market forces are causing more frequent interruptions in the supply chain, reinforcing the need for strategic and optimized transportation spend management.
2. E-Commerce and Demand Will Lead to More Surcharges and Costs
Businesses historically drive up their costs and create surcharges to balance against increased demand through peak shipping seasons. The pandemic forced more people to shop online, which led to an unexpected boom in e-commerce. Because of the swelling demand, everyone should expect increased new peak season surcharges, according to SupplyChainDive.com.
3. Reactive Shipping Management Will Lead to Missed Opportunities for Improvement
Reactive shipping management in peak season shipping 2021 will inevitably lead to missed opportunities in the supply chain. By working backward, leaders contend with old and sometimes expired data to solve issues without real-time visibility. The lack of updated information will create problems that will likely not be found until much later and can prove costly. When logistics and transportation managers have up-to-date information, they are able to proactively manage exceptions and issues in real-time, resulting in more consistent customer experiences.
4. Traditional Strategies to Peak Season Shipping 2021 Will Need to Be Readily Versatile
As the industry reaches peak season shipping in 2021, those working with traditional strategies will need to be ready to change on demand. With the growing and frequently changing shipping capacity issues, older techniques can create chaos. Collaborative technology integration and proactive analytics will help even the most ill-planned business combat this peak shipping season and boost solution versatility.
5. Customers Will Expect the Same Fast Shipping Regardless of Peak Stress
One unavoidable issue lies in consumer expectations. While maneuvering through the havoc created by the pandemic and high demands, customers still expect faster and faster shipping. This leads to increased costs and surcharges to combat the crunches logistics companies face. Creating a contingency plan for delayed deliveries will help ease the stresses on businesses and customers.
6. Inventory Strains WIll Be Inevitable as Global COVID-19 Issues Continue to Affect Ocean Transport
As vaccination increases around the world, pent-up demand as economies reopen will surely remain a disruptive force this peak season shipping 2021. The demand is impacting capacity in all modes, particularly in ocean freight as demand soars for imports, causing a lack of container availability, and upward pressure on pricing on rates. Additionally, there is cargo stuck in ports resulting in delays, impacting the ability of retailers to keep inventory in stock and fulfill orders from customers. Retail supply chain analytics, such as inventory to sales ratio, a measure of how much inventory is on hand compared to sales, has hit all-time lows, according to FRED Economic research, with retailers having more sales than inventory to offer. The increase in consumer demand with low inventory and high shipping costs are making peak season in 2021 a challenge for many retailers. That is why we have seen many of our customers at Intelligent Audit tell us that peak season shipping planning starts earlier than ever, and perhaps maybe a year-long consideration, for the foreseeable future, or until inventory to sales ratios even out to more traditional and palpable levels.
7. Expanding the Transportation Network to Leverage Regional Carriers Can Help
Supply chain professionals can expand their transportation network to alleviate the pain of tight capacity. By extending the reach to regional carriers, it opens up capacity while giving carriers consistent loads and packages through the peak season. Further, by expanding the transportation network, managers have more flexible delivery times while offering a cheaper cost per package in most cases.
8. Knowing When to Expand Your Network and Where Are Integral to Overcoming the Challenges of Peak
Knowing when to expand the current network presents another approach to ease the burdens brought forth by peak season challenges. With uncertainty in forecasting, the last half of 2020 foreshadowed the problems professionals may face this peak season. Looking at the past data will help determine expansions needed within the existing network and will be imperative to surviving this peak season. Going beyond historic data, managers should review data week over week to analyze trends and market penetration to expand their network before the stress occurs.
9. Payment Management Will Require Integrated Systems to Handle the Swelling Volume
To handle increased peak surcharges and payment management in general, management must implement emerging technologies that can coexist with current technology. The higher the demand, the more payment management matters. Integrated systems can work in tandem with the demand and eliminate issues associated with payment backlog or outdated payment methods.
10. Lead Time Will Need to Be a Top Priority in Shipment Planning
In addition to the lack of capacity, businesses also extend lead times, leading to limited inventory. While this practice helps businesses keep a flow between orders and inventory, it can create a backlog for companies looking to restock their customers. These issues will impact on-time delivery, so businesses must plan to mitigate these circumstances.
Create a Winning Strategy for Peak Season Shipping 2021 Needs by Partnering WIth Intelligent Audit
Peak season shipping 2021 will prove to be the biggest challenge facing the supply chain world this year. Hiring the right partner to navigate peak season shipping eases the burdens brought on by growing pains and the continuing pandemic. To create the best strategy, contact Intelligent Audit today.