5 Critical Challenges in Managing Peak Season Logistics

5 Critical Challenges in Managing Peak Season Logistics

For supply chain leaders, few tasks carry the weight and importance of peak season logistics. The right peak season strategy can mean the difference between business life and death. The massive growth of e-commerce, increased customer expectations, and global shipping have led to an array of challenges, but fortunately supply chain leaders have a tool to combat these problems: the enterprise TMS. To maximize the value of an enterprise TMS during peak season, shippers first need to understand the challenges associated with effectively managing peak season logistics.

Peak season logistics remain a key concern for shippers and logistics service providers (LSP’s). During peak season, demand for freight capacity increases. Further, the current peak season remains especially challenging for shippers who face uncertainty due to market forces, including the introduction of new tariffs, among other challenges, which makes planning more difficult. To achieve success during the 2019 peak season, shippers must understand the challenges associated with managing this critical time period.

Increased Consumer Activity

Although the upcoming peak season is expected to fall short of the year-over-year growth rates seen in 2018, growth will still occur due to continually increasing consumer activity. This has been a recurring theme in e-commerce, and even when growth rates do not exceed the previous year, any amount of growth can still put added strain on shippers and their transportation teams. E-commerce is expected to expand approximately 2%, and shippers that do not redesign their workflows and optimize operations for peak season face extreme uncertainty. With increased consumer sales and revenue comes a more significant opportunity for profitability. Still, as consumers have grown increasingly demanding of free and fast shipping, shippers must take every action necessary to be prepared to meet this demand while reducing transportation spend.

Demand For Faster, Amazon-like Delivery Speed

Consumer demand is fueling the increased necessity for improved logistics processes to meet expectations for faster, Amazon-like delivery speed. This problem exists in all industries, as companies across the globe race to stay competitive with Amazon. And, while companies such as Amazon have the resources and economies of scale to offer fast, free shipping on millions of items, the majority of shippers don’t have that same luxury. Such prowess by the e-commerce giant will transition into peak season, increasing the likelihood that consumers will shop with Amazon as opposed to your company. As explained by Logistics Management, 61% of respondents expect the upcoming supply chain season to be higher in consumer expectations than last year. As a result, shippers should consider the following key challenges to prepare for this peak season and gain a mindset of flawless execution.

1. Lack of Time to Correct Inaccurate or Erroneous Orders

The lack of time remains another critical concern for shippers today. During peak season, shippers do not have the time or resources to correct inaccurate or erroneous orders. If a consumer makes a mistake, it falls to the shipper to fix the issue and assure guaranteed delivery before checkout. This challenge remains extraordinarily complex, and as the number of SKUs and additional data grow, shippers will face increased pressure to manage peak season logistics effectively. Therefore, all shippers should utilize a Transportation Management System (TMS). A TMS allows shippers to remain consistent and reduce costly errors in the order fulfillment process.

2. Limited Warehouse Space

Available resources are another concern of supply chain leaders. Limited warehouse space amounts to fewer opportunities to fulfill orders and increased demand on Logistics Service Providers (LSPs) to meet such demand. Limited warehouse space also effectively reduces the volume of orders available to be shipped, putting additional strain on carriers, which may already have little or no resources available for shippers entering the global landscape.

3. Antiquated WMS

Existing supply chains should consider if their warehouse management system (WMS) is outdated. Outdated systems effectively slow down the existing processes within an organization. Modern, cloud-based WMS improves speed and agility of fulfillment, explains My Total Retail. An updated WMS will allow shippers to reduce costs and improve customer satisfaction, providing an end-to-end solution that offers accurate accountability through all supply chain functions.

4. Failure to Integrate WMS and TMS

Another challenge arises if the WMS and TMS functions are not fully integrated. When the WMS does not speak with the TMS, problems occur. Difficulties may arise from the inability to share data, and supply chain leaders will lack the ability to make real-time improvements on supply chain functions. The failure to integrate WMS and TMS functions can further contribute to cascading problems and worsening of supply chain functions, potentially leading to poor customer service.

5. Increased Demand for Transparency and Automation In Delivery

Customers also expect a heightened level of transparency and automation in delivery. As both retailers and logistics service providers have worked to create automated processes that provide efficient delivery options, customer’s expectations have grown. It is not enough to fulfill orders and ensure timely delivery; shippers must work to provide timely, proactive delivery. For example, shippers should implement systems that allow for automated tracking notifications that ensure real-time visibility into shipment status for customers. The need for real-time delivery monitoring remains consistent across both direct-to-consumer and business-to-business transactions.

Overcome the Obstacles in Peak Season Logistics With an Advanced, Automated TMS

The challenges of peak season shipping are clear. Shippers and LSPs spend months building strategies to fulfill all needs for peak seasons, but unexpected problems still arise. Instead of only hoping for the best next year, guarantee it by identifying your weaknesses and making improvements.

Learn more about how a TMS could benefit your organization year-round, including during peak season.

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