How to Thrive in the Upcoming Holiday Capacity Crunch

Thriving In 2020 Holiday Capacity Crunch
The holiday peak season has always been a source of revenue growth and stress for the supply chain. And 2020 is shaping up to change the game forever. According to FreightWaves Sonar, total freight volumes are currently 80% above fall 2019, and last week, tender rejections rose above 25%. The problems aren’t just forcing shippers and LSPs to abandon their freight management partners; companies are flat-out missing opportunities just to try and stay ahead. For example, according to the Loadstar, “Equipment is so tight that many companies are paying the carrier to deadhead from the border to plants so they can continue to move finished product northbound.” However, companies can thrive in the upcoming capacity crunch by following a few steps.

Get Access to Instant, Real-Time Rates for All Tendered Loads

The first step is the simplest. Companies need access to instant, real-time freight rates, which are available as a core feature of Loadsmart and MercuryGate’s ability to deploy Total Transport Leverage™. Instead of awaiting rates from third-party resources, Loadsmart and MercuryGate provide real-time access to current rates across all markets, lanes, regions, and modes. Gaining access to current rates for all modes, including both multi-modal and intermodal, is essential to getting the best deal for that shipment. Further, current rate data allows freight market participants to avoid missteps in equipment scheduling and planning successful supply chain operations through a capacity crunch.

Maximize AI Configurations to Manage by Exception

Another critical strategy involves using artificial intelligence (AI) and robotic process automation (RPA) to power through freight management’s unexpected issues, enabling staff to manage by exception. Meanwhile, companies enjoy spending less time handling recurring exceptions and can focus more on physically moving freight. After all, tight capacity doesn’t necessarily mean capacity is missing. Instead, it means that somewhere, somehow, resources are not fully optimized.

Use Real-Time Tracking Resources to Manage Freight From Start to Finish

Within a SaaS-based platform, real-time tracking resources open the doors to savings across all freight management segments, including shippers, freight brokers, logistics service providers (LSPs), and carrier drivers. Additionally, real-time tracking and documentation management capabilities naturally lead to a digital auditing and settlement process. As a result, companies realize an efficient, capacity crunch-ready strategy.

Reconsider Routing Guide Rulesets to Optimize Available Capacity and Reduce Rejections

Take a second look at freight and route optimization. Optimization leverages all available transportation opportunities to move freight as efficiently as possible. As all freight market participants focus on maximizing profitability in addition to lowering barriers to efficiency, using a digital, dynamic routing guide offers many perks. Instead of relying on what worked in June or pre-COVID, companies can rise to meet fluctuations in capacity throughout peak season and beyond. Moreover, dynamic routing guides will inevitably become a year-round opportunity. And for those still not convinced, consider this: FedEx is the first carrier to announce an increase of shipping rate by an average of about 4.9% or more, starting Jan. 4, 2021. Further, FedEx will introduce three surcharges on Jan. 18, 2021, including changes to how the Additional Handling Surcharge is assessed for FedEx Express and FedEx Ground for packages greater than 105 inches in length and girth. FedEx Freight will introduce a High-Cost Service Area Surcharge in some U.S. zip codes. And some U.S. locations will have an International Out-of-Delivery-Area Surcharge or an International Out-of-Pickup-Area Surcharge when using FedEx International Express Freight. FedEx is also changing the FedEx Freight fuel surcharge, and it will enforce a late fee for FedEx Express and FedEx Ground invoices, beginning January 2021.
As e-commerce continues to dominate the market, capacity will grow tighter. Therefore, the only successful strategy to overcome the holiday capacity crunch is one that looks at the whole picture, optimizes everything, and works to reduce rejections around the clock.

Join MercuryGate and Loadsmart in the Go-To 2020 Holiday Capacity Crunch Review This Week

While these four steps form a strong foundation for overcoming the 2020 holiday capacity crunch, there are other opportunities to lower risk and maintain a proactive stance against the coming capacity crunch. Freight management is exceedingly complex, and any system used to manage it should be intuitive, adaptive, automated, and ready to respond when capacity falls short. Fortunately, MercuryGate and Loadsmart have a strategy for success.
On September 24, 2020, at 2 p.m. ET, join us to learn more about how companies can optimize their existing technologies, maximize their TMS configuration, and turn the capacity crunch into a cost-saving opportunity. Sign up to attend the webinar online today. And be in the know when it comes to how to best plan and prepare for the upcoming holiday capacity crunch.

Don’t forget to request a demo of the MercuryGate TMS to learn more.

Lauren Brown
Sr. Manager, Strategic Partner Sales
Loadsmart
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