Posted On September 30, 2024
From labor strikes and port congestion to international delays, it’s clear that navigating the holiday season in today’s world requires more than just a solid plan—it requires agility, foresight and the right partnerships. This year’s problems are tomorrow’s lessons, and businesses must learn from the current holiday shipping challenges to prepare for next year’s peak shipping season.
The unexpected issues of the 2024 holiday shipping season
As the holiday shipping season approaches, shippers are facing a series of unexpected hurdles across the country.
East Coast ILA strike
As of writing this, one of the most notable disruptions is the International Longshoremen’s Association (ILA) looming strike on October 1, 2024. This labor dispute threatens to disrupt countless port operations, with 85,000 dockworkers from Maine to Texas potentially stopping work at those ports just as the holiday season kicks into high gear.
With limited alternatives, some businesses are eyeing Canadian ports as a workaround. However, this solution comes with its own set of problems. Not only do Canadian ports struggle with weather-related delays during the winter months, but they are also not built to handle the extra capacity of rerouted U.S. cargo.
West Coast congestion
Meanwhile, West Coast ports have their own set of issues. Dwell times, the period cargo spends in port waiting to be picked up, have more than doubled. What once was a reliable option for rerouting now faces severe congestion, limiting its effectiveness. The decision to use the West Coast as a fallback has become less viable, and the current bottlenecks mean delays could extend for weeks if rerouting becomes necessary.
International factors
The ongoing conflict in the Red Sea has forced many shipping lines to reroute around the Cape of Good Hope, adding an average of 9 days to transit times. This delays shipments and reduces overall global shipping capacity by about 10%. These international disruptions have a cascading effect, impacting everything from container availability to shipping rates.
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Forecasting for the future
If there’s one lesson from this year’s challenges, it’s the importance of early planning and accurate forecasting. Businesses need to start thinking about holiday inventory as early as February or March.
Take a page from retail giants like Walmart and Lowes. They’re already stocking shelves with holiday merchandise, having placed orders months in advance. This proactive approach helps buffer against the holidays’ potential disruptions and ensures product availability during peak demand from holiday shoppers.
To improve your own forecasting:
- Analyze historical data, looking for patterns and trends.
- Stay informed about market conditions and consumer behavior shifts.
- Use advanced analytics tools to predict customer demand.
- Maintain open lines of communication with suppliers and logistics partners.
Businesses should also rethink their inventory management strategies, with peak shipping season stretching 6-8 months. Building larger inventory buffers may seem counterintuitive in an era of just-in-time logistics, but it’s becoming increasingly necessary.
Here’s how to approach proactive stock planning:
- Review past performance data to identify your fastest-moving products.
- Consider stocking up on these high-demand items earlier in the year.
- Factor in potential delays and disruptions when setting reorder points.
- Stay flexible and be prepared to adjust your strategy as market conditions change.
The goal isn’t just to have enough stock but to have the right stock at the right time, and that requires a deep understanding of your product mix and how demand fluctuates throughout the year.
Mitigating peak season costs and delays
Shipping early is one of the most effective ways to manage costs and delays.
By moving your timeline forward, you can avoid premium charges and reduce the risk of delays. Working with a 3PL provider can be particularly beneficial in this regard. They can offer valuable insights into optimal shipping times and routes based on historical data and current market conditions.
- Start planning your holiday inventory needs at least 6-8 months in advance.
- Identify the best shipping times based on carrier schedules and capacity.
- Consider using slower, more economical shipping methods for non-urgent items to free up capacity for time-sensitive products.
- Communicate clearly with customers about expected delivery times to manage expectations.
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Diversifying your shipping strategies
Relying on a single shipping method or route is risky. Consider diversifying your shipping methods to include a mix of sea, air and rail transportation. This approach can help you navigate disturbances and utilize available capacity across different modes.
One strategy gaining traction is the use of transloading. This involves moving cargo from one mode of transportation to another at intermediate points in the journey. For example, you might ship goods to a West Coast port by sea and then transfer them to trucks for faster inland distribution. While this approach may involve additional handling, it can significantly reduce overall transit times and provide more flexibility in routing options.
Air freight, despite its higher cost, could also be considered as part of your diversified shipping strategy. While capacity is tight due to the e-commerce boom, securing air freight space early in the fulfillment process can provide a valuable safety net for time-sensitive or high-value shipments. Just be sure to plan accordingly to avoid last-minute surcharges.
Implementing strategies for smoother international shipping
One of the most common causes of delays in international shipping is improper documentation. Businesses often face setbacks due to missing or incomplete customs paperwork, leading to significant delays at the border. Shippers should work closely with customs brokers to ensure all necessary documentation is prepared well in advance to avoid this. Ensuring international shipments comply with all trade regulations will help mitigate last-minute surprises and keep goods moving through customs without delay.
Another key to successful international shipping is contingency planning. Geopolitical events, such as the Suez Canal blockage, have shown how quickly global shipping capacity can be affected. Businesses need to have backup plans in place in case of such disruptions. This might involve securing additional warehousing space closer to their destination or exploring alternative shipping routes. Flexibility is crucial in these situations, as having a contingency plan can make the difference between getting goods delivered on time or missing critical deadlines.
Preparing for next year’s holiday shipping deadlines
Businesses that plan early and develop flexible shipping strategies can better handle evolving peak season challenges.
Here’s a roadmap for preparing your business:
- Start planning early—as early as March for the following holiday season.
- Build flexibility into your supply chain through diversified shipping methods and suppliers.
- Invest in robust demand forecasting tools and processes.
- Cultivate strong relationships with logistics partners who can provide market insights.
- Develop and regularly update contingency plans for various disruption scenarios.
- Consider increasing inventory buffers for critical products.
- Stay informed about global events and trade policies that could impact shipping.
- Prioritize clear communication with customers about potential delays or issues.
Remember, the goal isn’t just to survive peak season but to thrive despite its challenges. By learning from current obstacles and implementing strategic changes, businesses can turn the holiday season from a source of stress into a competitive advantage. Planning for next year’s holiday season begins now.