GOOD QUESTION: What’s your biggest supply chain takeaway from peak season?
With peak season 2022 in the rear view, readers and industry insiders reveal key lessons and insights.
Peak season is a 12-month job. You need to commit time and resources all year long to analyzing past performance for opportunities to improve, forecasting future demand, and lining up both primary capacity and secondary carriers that can step in immediately in a crunch.
–Shawn McCloud
Senior Vice President, Operations
Coyote Logistics
Early detection is important. You can’t always forecast when the pendulum will swing the other way, especially with constant disruptions. Being able to monitor demand and sense changes in real time can give you a competitive advantage.
–Lachelle Buchanan
Vice President
Logility
Inbound ocean TEUs, as long as no backlogs exist, are a strong leading indicator for pending retail freight volumes.
–Christopher Thornycroft
EVP, Procurement
Redwood Logistics
Understand the difference between a robust and a resilient supply chain. Robust means being able to absorb any shock without breaking, whereas resiliency recognizes disruption is inevitable, while also knowing how fast you can recover. To understand your resilience, ask, “Are we recovering better and faster than others?”
–Vincent Cellard
Vice President Commodity Management
Flex
Be prepared for the highs and the lows. Plan for lots of different scenarios and be flexible enough that you can spin up capacity quickly and if the volume doesn’t come, that you’re able to reallocate resources and dollars.
–Daniel Sokolovsky
CEO and Co-Founder
WARP
Consumers are more interested in sustainable home delivery options and this has become a delivery “persona” that retailers need to heed because it not only increases customer loyalty, but can also result in lower delivery costs.
–Chris Jones
EVP, Industry and Services
Descartes
Collaborate to innovate. Recently, consumers returned holiday purchases at record-highs, demanding agile supply chains that move both outbound and inbound. To meet consumer demand and improve reverse logistics, our industry needs to enable shared resources like data, warehousing, transportation, and labor to create efficiencies at scale.
–Dan Ahrens
Director, Customer Solutions
CHEP
Having access to capacity translates to success, regardless of the intensity of a peak season. We leverage technology to connect to our network of LTL and truckload providers.
–Doug Waggoner
CEO
Echo Global Logistics
Treat people fairly. A peak season is great for one side (trucking) and complete chaos for the other side (shippers and receivers). If you treat the other side fairly and make an effort to take care of the other person, they will be there to take care of you when the down season arrives.
–Tommy Fishburn
VP, Business Development
TA Services
Ensure trust and transparency with customers through timely and effective communication. Something simple, like a widget clearly indicating when an item will be restocked, has a huge impact, preventing customer frustration and maintaining loyalty, even during periods of high demand or supply chain disruptions.
–Charles Desjardins
EVP and Managing Director
Commerce Service North America
Valtech
Don’t take anything for granted. “Give me more time than I need” is one simple phrase I share with colleagues who rely on me to create transportation miracles daily for their just-in-time needs. I never get that time, but I repeat the phrase often in the hopes I’ll have a nice, leisurely shipment to monitor and announce its arrival. How glorious that would be in lieu of “Can you intercept that?” “How much longer?” and the ever-popular “Why does that cost so much?”
–Brian Gaffney
Supply Chain Specialist
Natural Fiber Welding
Plan ahead and communicate clearly. The most successful retailers were ones that planned ahead for peak season by prioritizing clear communication and collaborative planning. Retailers that avoided last-minute changes that impacted how or when customers received orders were able to foster strong relationships with customers through trust and loyalty—and in turn became the most profitable.
–Kelton Kosik
Senior Director
Supply Chain Strategy
Ware2Go
The value of resiliency. That could mean having a more diverse supplier base to minimize the impact of any one country, having different options for transportation, or even a backup customs broker. Companies that made efforts to build resiliency were better off.
–Tony Pelli
Practice Director Security and Resilience
BSI
Incorporate safeguards. In the recent peak season, merchants found themselves incorporating more safeguards to protect against increasing cases of fraud while still ensuring a positive customer experience. Nearly 1 in 3 SMBs report that fraud significantly impacts profitability, as they receive empty boxes, incorrect items, or nothing at all.
–Eduardo Lopez-Soriano
VP
UPS Capital
Spread it out. In 2022, retailers spread out the peak season by offering earlier incentives to consumers. Early planning of inventory and spreading out peak buying resulted in better sales, reduced inventory shortages, and fewer constraints on carriers—especially last-mile carriers. Creating diversity within both suppliers and carriers also helped companies navigate peak season.
–Steven C. Beda
EVP, Customer Success
Trax
Don’t mistake initial strong demand for sustained, continued demand. Expecting the buying rate to continue at pace when resupplying can lead to significant overstock issues if the customer type who’s purchasing has reached saturation point. Retailers need to tune into a diverse set of demand signals to get a more accurate gauge on inventory replenishment.
–Jonah Ellin
Chief Product Officer
1010data
Understand point-of-use demand and don’t overreact to buying patterns. Many companies saw demand surges, ramped up capacity, and moved to “just-in-case” inventory policies to buffer against future volatility. Now they are dealing with excess inventory and capacity.
–Allen Jacques
Industry Thought Leader
Kinaxis
More data = better insights = better visibility, which is the perennial takeaway from all peak seasons. The more deeply we understand our supply chains, the better the job we can do in translating those insights into lessons and actions.
–Omer Abdullah
Co-Founder
The Smart Cube
The days of buying contracted capacity rates are ending. This past holiday peak season saw shipping rates actually decrease, bucking previous trends and forecasts. Contract rates rose even though spot rates fell. It’s clear the future of paying for capacity will rely on real-time network visibility rather than risky contracts.
–Rick Burnett
CEO
LaneAxis
Ongoing technology investments can help manage visibility, mitigate risk, and make or break a supply chain during peak season. In preparation, shippers should be consistently tracking consumer behaviors to better understand what improvements are needed to avoid disruption while conducting high-volume shipments.
–JJ Schickel
CEO
Omni Logistics
Anticipate and plan for change. Many retailers that stockpiled goods at the height of the pandemic were left with excess inventory during and after the holiday shopping season. Using multiple scenario planning for inventory levels—and getting ahead of the “what-ifs” with better reporting and cleaner data—will help when the next peak buying season happens.
–Geoff Coltman
Vice President
Catena Solutions
Shipping carriers are overwhelmed during peak holiday season meaning that ordinary barcode or RFID-based scanning solutions have limitations when the sheer volume overwhelms a system. Packages get lost when they’re difficult to trace. Modern IoT asset tracking solutions, which work both outdoors and indoors, can provide shippers and carriers insight into the exact location of high value assets enabling speedy recovery.
–Karthik Ranjan
LoRa Cloud Solutions and Partnerships Leader
Semtech
A muted peak season punctuated the major market reset that unfolded throughout 2022. After two years of battling strained supply chains, shippers had adequate inventory, but low consumer demand led to disappointing volume results. Now, shippers, carriers, and brokerages must adapt to succeed as the market volumes return to equilibrium.
–Travis Paeth
VP of Client Solutions
Arrive Logistics
If you’re not ahead then you are behind. Planning your inventory and mode of transportation needs to be a mirror reflection of each other. Understand your suppliers’ issues and adapt to them when placing your purchases. Have a back up plan for supply chain failures.
–Reo Hatfield
VP of Corporate Services
TA Services
While macro conditions were softening in Q4, peak demand allowed carriers to keep rates elevated and revenue per truck high. This enabled carriers operating with a high O/R to stay on the road longer. Depending on capacity, shippers and brokers will struggle to service their freight in the future, as those with partnership relationships work with consistent carriers to balance rates and service.
–Kyle Toombs
SVP, Customer Operations
Nolan Transportation Group
Last-mile shipping challenges during the 2022 holiday season were a stark reminder to online retailers—especially in the UK where I live—to pay close attention to their supply chain. Thousands of online shoppers were frustrated by “next day” deliveries which not only didn’t arrive the next day, but in many cases did not arrive at all. Moving forward, they’ll surely buy from retailers who prioritize assurance of delivery over speed.
–Tony Harris
Senior Vice President and Head of Marketing and Solutions
SAP Business Network
Flexibility, agility, and the courage to act based on readily accessible and trusted data and analytics is a must have for chief supply chain officers and management today. In the not-so-distant past, we would see significant supply chain disruptions every couple of years; now we are dealing with meaningful disruptions every two to three months.
–Eric Linxwiler
Vice President
TradeBeyond
Against a backdrop of elevated inflation and a rising interest rate environment, supplier demand for early payment solutions accelerated in recent months. Adoption of both buyer-led and seller-led supply chain finance solutions accelerated as liquidity tightened, physical supply chain dislocations abated and buyers continued to focus on supply chain resiliency. This will position participating suppliers well in a potential economic slowdown as these funding solutions can encourage continuity in the flow of working capital and strengthen relationships between buyers and sellers.
–Michael Stitt
Senior Vice President
U.S. Bank
We all took what was once a resilient supply chain for granted. However, we are now navigating an uncertain landscape, with each week bringing new shortages. Supply chain planners and logisticians must develop increasingly comprehensive risk management to ensure goods make it to market and store shelves get stocked.
–Jim Heide
COO and Co-founder
Loadsure
Using data and planning for the busy season are your friends. The market eventually does self-regulate, but by the time it does, you could have wasted millions and put your business at risk.
–Dimitre Kirilov
President of Consumer Services
Montway Auto Transport