The 2023 peak shipping season is quickly approaching. While some things haven’t changed, like customers wanting fast and on-time delivery and carriers enacting hefty peak season surcharges, the supply chain landscape is very different from last year.
If you haven’t started preparing, now is the time. If you don’t know where to start, here are four things you need to have checked off before peak season arrives.
1. Review the Current Shipping Surcharges
Carriers do everything they can to extract extra cash from shippers during the holidays. Peak season surcharges, or “Demand Surcharges” as FedEx and UPS now label them, are variable increases imposed on many packages during the holiday season.
Shippers should expect hefty surcharges from October through January of next year, especially for residential deliveries. UPS and FedEx have different timelines and amounts for each surcharge, so make sure you review each category before shipping. For instance, UPS starts applying additional handling surcharges on October 1, but service level surcharges, such as on SurePost, don’t begin until October 29.
You don’t have to settle for high rates once peak season surcharges are in effect, however. Look for creative ways to avoid high spending on surcharges, like using regional carriers where it’s favorable cost-wise or paying more attention to carton sizes to avoid oversize fees.
2. Review Your Shipping Processes
Getting your shipping operations prepared for peak season is crucial and something made easier with better demand planning. Reviewing your fulfillment operations and processes to make sure you can properly handle the volume of expected orders is the first step. One technique for alleviating the pressure on your operations is to encourage customers to buy products earlier before peak season surcharges begin.
Additionally, you should consider ways to diversify your carrier base. Relying on one carrier can leave you vulnerable to disruptions and impact delivery performance. Having backup carriers can not only improve customer satisfaction during the busiest time of the year, but when used strategically, can also lower costs while reducing risk.
3. Optimize Inventory Management
Do you have the inventory to make the big sales, or have you overstocked an item without having good projections for your sales? Having too much, or not enough, inventory can make or break a company’s peak season.
Using inventory planning software in conjunction with demand planning can assist you in properly stocking the right items and smoothing out your shipping process so you can get products to the right places at the right time.
4. Prepare for Returns
It would be nice to believe that every customer will end up happy. Unfortunately, that’s not the case. Returns are inevitable and customers prefer companies who can offer a helpful and convenient return process.
During peak season, returns surge and often leave the retailer footing the bill. Retailers without an efficient return process end up losing a lot of money — and customers.
Your busiest season of the year should be the most profitable. Proactively preparing and managing your supply chain in these four areas will help you beat your competition, prepare for the unexpected, and maximize your profits.
Jey Yokeley is Senior Vice President of Sales & Marketing TransImpact. Bringing over a decade of experience, innovative strategies, and a passion for driving business growth, Jey shares invaluable insights in navigating the complex, evolving marketplace, positioning TransImpact on a trajectory of sustained success as an industry leader in Parcel Spend Management and Supply Chain Planning.