3 Lessons to Learn from the Freight Season of Christmas Past
July 6, 2022 •Kevin Baxter
Last week, we took a look at the holiday freight shipping season of 2021 and the many unique challenges shippers, carriers and consumers dealt with last year. If you don't feel like reading that previous article, those challenges included ocean freight backups, shortages of labor, warehouse space, shipping containers and chassis, and product (and component of product) shortages - all with a sprinkle of raging consumer demand on top. Now it's time to take the lessons learned about what happened then to see if there are changes that may make the next Christmas shipping season go more smoothly. After all, as the saying goes, those who do not learn from the past are doomed to repeat it.
Lesson 1: Plan ahead
Plan ahead should be the mantra of any shipper, as you never want to be caught without a road (or rail, or ship) map of what's to come. But the need to plan ahead in a variety of ways was underlined by the challenges of the 2021 holiday freight shipping season. Shippers who had a plan last Christmas could already read the tea leaves of capacity and pricing issues, as well as delays, as these problems began earlier in the pandemic. While the situation is not the same this year, planning ahead once again takes into account the current situation and what came before to better plan for capacity, price and delays and get priority loads ready for shelves on time. That means setting up contracts that avoid at least some spot-related surprises, knowing which products are most important for your business and prioritizing those, and potentially moving up the ship time depending on the route. By the same token, customers who plan ahead have a better chance of getting their desired gifts under the Christmas tree. And we saw many who'd already learned that lesson last year, with holiday shopping getting underway earlier than ever.
Lesson 2: Be flexible
Planning ahead and being flexible strangely go hand in hand. Even though a common thought is, have a plan and stick to it, in the case of freight and logistics, part of being a good shipper is flexibility. So a plan should include contingencies, and being flexible to find the best ways to get your loads from point A to point B on time. Sometimes that best method hasn't presented itself when you develop your initial plan, so being nimble enough to take advantage of opportunities is a great benefit. What does flexibility mean in a more concrete sense?
- Using different freight modes like intermodal or air when needed or when better opportunities come along
- Shipping earlier (or later) than you traditionally would
- Staging more products at distribution centers to allow for flexible deliveries to where inventory is needed most
- Being open to creative solutions to unanticipated problems
Again, these may seem to fly in the face of planning ahead, but having that baseline plan is key to making effective pivots possible. Since we mentioned consumers earlier, flexibility is key to a good Christmas shopping season as well. Be flexible about where you get your gifts - even if it's a retailer you haven't used before (though make sure it's reputable). And while this isn't always possible, be flexible about the gifts you buy, too. Maybe a variation on an item you're looking for is more available or a better price. Of course, if Sally wants a specific doll, maybe the flexibility is more in how far you're willing to go to get it.
Lesson 3: Don't over-correct
One lesson that some shippers and retailers seem to have learned from the 2021 holiday freight shipping season is ship early, ship often. The danger is - and this is already playing out - that they may be overstocked. This overstocked scenario is a negative for a few reasons:
- No room for returns - as in, retailers are now looking to pay people to keep items they don't want to avoid further clogging up supply chain resources
- Lack of flexibility - See above, but also, if there's too much stock, the shipper and/or retailer may not have room to load up on the unanticipated popular items of the season and be stuck selling less popular products
- Wasted resources and losses - Even now, before the holiday season has started, some retailers are trying to unload overstock to liquidators and sometimes finding no takers, so they have to pay to get rid of these items that they also paid to order. Shippers may have overproduced items as well, wasting time and money.
On the consumer side, while it's good to be proactive to get gifts on time for the holidays, the danger is buying too much too soon, and just like the retailer, picking wrong. You may not get the gifts people really want, or maybe you pay full price when sales come down the road. Either way, that leads to more money spent or unhappy recipients.
Need help applying the lessons of Christmas past to your holiday season plan this year? Did you know, a non-asset intermodal provider like us can put you on the right track. Tell us about your situation and we'll work with you to find the best solutions for your unique needs. In the meantime, visit our Learning Center to learn more about the industry - and us. Or start with one of the links below:
- Domestic Freight Services: Intermodal, Truckload, LTL
- Outsourced Managed Transportation Service Solutions