November 1, 2021

How You Can Handle Peak Season with a Disrupted Supply Chain

How You Can Handle Peak Season with a Disrupted Supply Chain

While the 2020 holiday peak season presented unprecedented challenges brought on by the COVID-19 pandemic, 2021’s peak season brings a whole new set of problems for supply chain and logistics stakeholders. Despite early ordering, inventory from overseas has been delayed repeatedly along its journey through the supply chain. With extreme port delays on both sides of the ocean and freight capacity issues across modes keeping critical peak season inventory in limbo, many retailers worry that they won’t be able to meet 2021 holiday demand.

Though the 2021 holiday shopping season may look different than years past, that doesn’t mean retailers can’t have a successful fourth quarter. The following tips may help retailers and e-tailers get their goods into some stockings this year.

1. Incentivize your customers to order early

In an average year, the end-of-year peak season begins with back-to-school shopping in August, then builds momentum through other holidays like Halloween and Thanksgiving. However, the real rush begins on the day after Thanksgiving—traditionally known as Black Friday—where retailers launch a wave of holiday deals on in-demand goods to kick off the actual winter holiday sales season.

This year, however, retailers would do better to spread out their holiday deals. Take stock of what you have in inventory and put it on sale earlier than Black Friday, incentivizing your customers to buy earlier and at a steadier pace. This practice will help you avoid the premium shipping costs leveraged by parcel carriers between Black Friday and the end of the year. It will also free up room in your warehouse for any delayed inbound shipments that will eventually arrive.

2. Use every transportation mode you can get

The retail sector usually moves peak season inventory via ocean carriers from late summer into the fall. Unfortunately, that strategy won’t work in 2021, where shipping containers seem impossible to find and cargo ships get delayed by days or weeks on both sides of the ocean. If you want to make sure you have products for your customers to buy come the holidays, move your inventory by whatever means you can find.

Many shippers have shifted their cargo to commercial air freight, which has strained capacity in that mode. Walmart has chartered its own ships to get peak inventory moving, though even those ships will face port delays. While not all retailers can afford to charter flights or vessels, some shippers will sell excess space on their charters when it becomes available. Moving a few pallets or boxes on someone else’s charter is better than moving no freight at all. Similarly, cargo that makes its way into the U.S. needs to quickly get to your fulfillment/distribution center. Consider intermodal options if necessary to put your inventory into a position for sale.

3. Talk to your suppliers and partners

The days of blindly submitting a purchase order and expecting it to get filled are gone. Instead, you must keep an open line of communication with your suppliers to ensure you’re aware of any problems as they arise. Getting your suppliers to provide you with real-time information about the status of your orders during production and transit can help you avoid getting blindsided by unexpected stockouts when sales ramp up for the holidays.

Also, look for local and regional suppliers who can offer replacements or substitutes for inventory items that keep running out. These suppliers can help you keep goods in stock even when your peak season imports get stuck in traffic.

4. Leverage the expertise of your 3PL

Moving peak season inventory presents enough challenges on its own. Now, add on a growing logistics labor gap and an industrial real estate shortage, among a host of other problems. While a skilled third-party logistics (3PL) provider is an asset in any peak sales period, having a partner on hand to help you manage supply chain disruptions in 2021 is a must for virtually any retailer. By leaning on a logistics partner when times are tough, retailers free up resources for sales, marketing, and other revenue-generating activities that will help them stay in the green.

About Phoenix Logistics

Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.

Kurt Jensen is the Senior Vice President, Acquisitions & Leasing of Phoenix Investors, a national real estate firm specializing in industrial real estate based in Milwaukee, Wisconsin. He is a seasoned executive with over 25 years of entrepreneurial, management, and deal-making experience.

Frank P. Crivello is a Milwaukee-based developer and Chairman & Founder of Phoenix Investors.

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