Shipping Peak Season: Why 2020 Peak Season Will Include More Than Retail

Shipping During Peak Season

The 2019 shipping peak season broke all prior records. According to Commercial Appeal, UPS handled more than 840 million packages, and FedEx handled more than 540 million. While this holiday peak season broke annual sales’ records for retailers, 2020 is shaping up to offer something new. Instead of the hyper-focus on retail during the holiday peak shipping season, the ever-changing demands of customers and market forces in the larger global economy will force shipping peak season to go well beyond retail and impact the supply chains of many industries. As explained by Post & Parcel, FedEx is already predicting major changes for 2020:

“Our strategies are clear: To develop the premier e-commerce portfolio in the U.S., improve international profitability, enhance our market-leading revenue quality and continue to optimize our U.S. and international networks,” said Rajesh Subramaniam, FedEx Corp. president and chief operating officer. “We are also taking immediate actions to address the short-term challenges facing our business, including eliminating multiple international flights to reflect reduced global air freight demand. These actions combined with benefits from the TNT integration should allow FedEx Express to enter fiscal 2021 with profit improvement underway.”
With peak shopping season for 2019 already behind us, one of the big three parcel carriers, FedEx, is already looking to enact efficiency improvements and cost-saving measures. The quest for efficient, profitable shipping to meet customer expectations, while not increasing shipping costs goes beyond just the retail industry. In this article, we will explore the global supply chain beyond the retail industry and how supply chain and logistics professionals will need to consider their strategies, tactics, and tools for the various shipping peak seasons of the coming year.

Returns Continue to Surge in the Weeks After Shipping Peak Season

The rise of omnichannel shopping, in particular e-commerce, has driven return rates in the retail industry well above 30%. These return rate numbers put emphasis on retailers to improve returns’ management in the weeks after the holiday season. Therefore, professionals in any industry must plan for upcoming shipping peak seasons, including augmentation of those plans with returns management capabilities. Although returns management, also known as reverse logistics, is a well-known aspect of the supply chain, most easily applied to retail, this same issue will become paramount in all supply chains, including pharmaceuticals, food and produce supply chains, automotive supply chains, and more. The new reality of having to more often consider reverse logistics capabilities within the supply chain is largely due to e-commerce making it easier for customers to mistakenly order, overorder items, or have buyer’s remorse once the product is in hand.

Shipping Peak Season Requires Collaboration to Yield Success in Changing Shipping Modes

Within retail, operations during any of the shipping peak seasons throughout the year will need to evolve to handle more collaboration and data sharing. Shippers who are able to improve collaboration with vendors, customers, and technology providers are more likely to see success in other areas of shipping, such as last mile, that are increasing in use thanks to e-commerce. As more customers take advantage of subscription services and home delivery for items, including pharmaceuticals, last mile shipping strategies will require collaboration, communication, and integration between systems.

Managing Supply Chain Disruptions within Peak Shipping Seasons

When looking at various trends related to peak seasons, the pharmaceutical industry often comes up in conversation, as that industry continues to evolve. The recent outbreak of coronavirus, as well as quarantines and the risk of port refusal for ocean ships, is impacting an increased likelihood for supply chain disruption. Without the right supplies, the pharmaceutical industry will suffer, and effects are starting to become evident in India, notes Reuters. Now, global shippers must consider the possible health impacts of coronavirus. In fact, the coronavirus is only the latest symptom of an industry that grew complacent with a never-ending supply from the APAC region and vice versa. Without backups in place, industries involved in global trade and manufacturing will face uncertainty with regard to sourcing raw materials, finding skilled workers that have a lower labor cost, and much more. No matter the supply chain disruption, or which industry disruption is occurring in, supply chain professionals need to build in contingency plans for unknown and unpredictable disruptions in order to meet customer expectations of on-time delivery during shipping peak seasons.

Customers Will Value Engagement Across All Industries

Smart devices and communications also will reshape the various shipping peak seasons in 2020. Customers value interaction and engagement. While their purchases may be top-of-mind, the level of engagement, including providing clear delivery windows and working to build a relationship with customers after the sale, will affect peak season shipping. Instead of simply hoping customers get their products on time, shippers will face added pressure to ask, “did it arrive correctly? Was anything wrong? What could we have done better?”
Those are complex questions, and they reflect the need to increase engagement across all industries in the age of digital transformation.

Exception Automation Will Optimize and Apply AI in All Shipping Peak Seasons

Exception automation will also become a bigger player in shipping peak seasons through 2020. With the coronavirus now a viable threat, shippers are faced with more exceptions, and while different, all exceptions have a degree of commonality. In other words, certain factors could be automated to leverage dynamic rule sets and automatically route freight to avoid disruptions.

Shippers and LSPs Turn to Technology to Improve Work Conditions

Worker conditions will also be in the spotlight through the coming year. Every industry experiences the need to improve worker conditions, and with the advent of social media, work conditions have been brought to the public’s awareness more than ever before. Customers now look at how companies are treating their workers in manufacturing facilities, or the conditions for warehouse workers working long hours to fulfill orders during shipping peak seasons. Work conditions will become an additional, closely watched aspect of supply chain and business management, and those companies that focus on how they treat their people will have a competitive advantage. As with any new focus, supply chain professionals will need to build into peak season plans any changes or processes to improve work conditions.

Food Supply Chains Will Face More Scrutiny Over Visibility

Last year’s peak shipping seasons saw a slight decline in the volume of food recalls, but the importance of food safety has not vanished. Instead, more shippers and logistics service providers are working to improve safety through more traceability. Throughout all shipping seasons in 2020, organizations must work to improve visibility while in transit, during order fulfillment, during returns, and even disposal. The use of a transportation management system that builds in automated visibility capabilities will allow logistics managers to provide this necessary transparency that allows for proactive management at the shipment level.

Planning for the 2020 Peak Season Will Never Stop

Planning for the 2020 peak shipping seasons and future shipping peak seasons will never stop. It will roll over into the 2020 peak holiday shopping season and into 2021 as well. The state of the global industry is changing, and the next disruptor—whether driven by an innovative new technology or a health outbreak—will force supply chains across the world to react. Instead of constantly putting out fires and trying to manage issues as they occur, shippers and LSPs should take proactive steps by implementing a robust transportation management platform to stay strategic and put collaboration at the center of everything they do. Find out more about the ways in which the right platform pushes the boundaries of returns management capabilities and helps your organization realize additional 2% more ROI than a typical TMS.

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