In this episode, we discuss the growth happening in freight and how to navigate it during peak season.
Few industries experienced such record-breaking growth like that of e-commerce in 2020. As the world came to terms with the reality of the COVID-19 pandemic, a general belief that the pandemic would end abruptly took root. Unfortunately, that was not the case. And as the virus continues to plague the world and results in increased demand for e-commerce shopping in the upcoming holiday shopping season, time moves forward. Now, shippers, carriers, freight forwarders, and freight brokers are all turning their eyes to the next event, the peak shopping season. At the same time, e-commerce growth is almost unsustainable, leading to a massive strain on freight capacity, and navigating freight growth amid peak season planning is going to be challenging at best. As a result, supply chain leaders need to understand a few things about how to get through this unusual situation.
The need to create a more decisive competitive advantage and meet the growing demands of e-commerce peak season continue to force evolution in the global supply chain. Among shippers, differentiation in the supply chain rests at the crossroads of digital transformation and applied data.
As the world prepares for the upcoming peak season, uncertainty remains the one constant. And the ability to flex supply chain operations to manage increased demand is essential in the modern supply chain. Today’s shippers, carriers, and logistics service providers (LSP) face an uphill battle to secure available capacity, allocate resources, and plan for an uncertain peak season. However, it’s hard to figure out what’s happening and what should happen without access to data-driven management’s full scale and capabilities. For that reason and to help shippers survive the unprecedented peak season, this white paper will explore:
Every summer and early fall, shippers and carriers around the globe begin to prepare for the peak shopping and shipping seasons. In the past, the approach was simple. Shippers and carriers would rely on freight forecasting capabilities and demand sensing to better manage inventory and increase resource availability. However, the current here and the ongoing pandemic have reshaped how consumers purchase. As a result, shippers need to understand why peak season 2020 is a novel opportunity for expanding e-commerce logistics and maximizing supply chain efficiencies.
Significant uncertainty continues to swell around the economic reopening of countries, states, and businesses. According to Jeff Berman of Logistics Management, “a case can be made that the 2020 peak season is shaping up to be much different than normal. That has been the case, going back to the middle of March, when the COVID-19 pandemic truly took hold, resulting in a shutdown of both the United States and global economies, to varying degrees and timeframes, which was followed by a staggered economic re-opening, which has been largely atypical, with many retail locations remaining closed or being open on a far more limited basis than in what could be considered as normal times. Peak season prospects, in the traditional sense, are in jeopardy.”
Moreover, the advancements in e-commerce demand, comparable to four to six years of traditional growth, notes John Koetsier via Forbes, will spur a retooling of peak shopping logistics management strategies and how to derive more value from limited resources.
The reason why peak shopping season 2020 is a novel to opportunity lies in the fact that e-commerce has advanced so significantly. While the insights collected from an Adobe report alludes to 77% year-over-year growth, actual statistics surrounding the upcoming peak shopping season are anything but certain. For example, mobile share of e-commerce grew 10% between January and May, but the prevalence of buy online, pick up in-store grew 195% in May. This dramatic increase was thought to be a temporary shift. However, five months after the supply chain coronavirus crisis began to impact the U.S. economy, the increased demand on e-commerce is almost certain for the upcoming holiday shipping season. In turn, customers that do shop for the holidays will place an even greater strain on logistics. Why? Because as exemplified by all the recent outrage over the toilet paper shortage and out-of-stock buying behaviors, shopping is one of the few things that consumers truly can control within their lives when vast uncertainty exists.
This is based solely on speculation either. In an early June survey of approximately 500 consumers, explains DC Velocity, found that the majority, 51%, expect to begin holiday shopping earlier than normal this year. Moreover, 76% intend to purchase at least 50% of their gifts online, including 62% that will purchase more stocking stuffers and last-minute gifts online. This change will inevitably result in a run on e-commerce resources, including available logistics capacity.
The path toward a successful 2020 peak season is not finite. Retailers can no longer rely on traditional strategies, and planning cycles are completely up in the air. Even ocean sailing schedules remain subject to the turmoil of COVID-19, and even if suppliers have available products, who knows if logistics will be able to handle the demand? It is an immense risk in the modern supply chain, and while consumers are educated on the nuances of moving freight within logistics, they still expect the unmatched customer experience. Therefore, retailers and supply chain partners looking to improve peak shopping season management need to follow a few basic tips, including:
There is still time to get your supply chain strategy for managing peak season right. Start by rethinking your use of carriers and supplier partnership. And remember to consider implementing a robust TMS as soon as possible. Fortunately, the new parent to Cerasis—GlobalTranz—has all those capabilities and more, and the Cerasis Rater has the executable functions needed to kickstart your strategy today. Now really is the best chance to secure your opportunity to maximize revenue during the upcoming peak season.
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