This post is also available in:
Spanish 
Portuguese (Brazil)
Every year around this time, companies review their transportation plans for the next few months, adjust as needed, and then hope for the best as the holiday onslaught hits. With product imports reaching all-time highs this summer, and with retail sales bouncing back from the pandemic, merchants are scrambling to replenish inventories and stock up early for the holiday season.
“After staying at home this spring, consumers are buying again and retail supply chains are working overtime to keep up with demand,” National Retail Federation’s Jonathan Gold said in a press release. “Nothing about this year is predictable, but retailers are making sure their shelves and warehouses are well-stocked for the holidays. They are also stocking up earlier than usual because they know many consumers will be shopping early this year to avoid crowds and shipping delays. Some holiday merchandise that normally wouldn’t arrive until Halloween is already here.”
Retail Sales on the Rise
This year, holiday retail sales are likely to increase between 1% and 1.5%, according to Deloitte’s annual holiday retail forecast. Overall, it’s projecting sales of between $1,147 billion and $1,152 billion during the November-January timeframe. Deloitte also expects e-commerce sales will grow by 25% to 35%, year-over-year, during the 2020-2021 holiday season, compared to sales increasing by 14.7% in 2019. “E-commerce holiday sales are expected to generate between $182 billion and $196 billion this season,” Deloitte predicts.
Forbes expects these seasonal increases to put tremendous pressure on retailers, as they need to shift resources out of stores and into fulfillment centers to process unexpectedly high numbers of orders. “The physical supply chain may not be able to handle the flood of orders and make those deliveries,” it says, citing Deloitte. “Retailers have been building more capability for that last mile, including buy-online-pickup-in-store, but this year is going to be a stress test for the retail supply chain.”
“Online shopping was already on the rise before the COVID-19 pandemic hit, and it accelerated dramatically once many consumers began staying home,” Transport Topics reports.
“E-commerce is expected to continue to grow throughout the holiday season, placing added strain on the supply chain and increasing demand for final-mile deliveries.”
7 Steps to Take Now
With companies shifting their attention to putting out daily fires, adhering to government shutdown mandates, and dealing with new challenges like socially-distanced workplaces in 2020, we can assume that some are getting a late start on their holiday season planning.
For shippers that need help getting their transportation plans in place for the upcoming busy season, here are seven to help you hit the ground running:
- Diversify your transportation sourcing strategies. Even if your primary carrier hasn’t failed you yet in 2020, that doesn’t mean you should be putting all of your eggs in that basket for the busy holiday season. By diversifying your transportation sourcing, you’ll ensure good coverage and be able to rest easier knowing that your shipments will be matched with available capacity.
- Work with a reliable logistics provider. You don’t have to go it alone. If transportation management isn’t a core competency for your company, outsource the task to a reputable third-party that will manage it for you.
- Have a strong returns management process in place. Ecommerce sales volumes are going up, which means the number of returns coming back are growing exponentially. If you don’t already have a strong returns management process in place, now is the time to put some time and effort into developing one.
- Strive for high levels of supply chain transparency. Your customers want to know where their goods are in the supply chain and when they’ll be delivered. They also expect fast deliveries, so make sure you can always accurately answer the “where’s my stuff” question.
- Get rid of paper. Use automation, online platforms, and other technology tools to both optimize and streamline communication across trading partners, carriers, freight forwarders, and logistics providers.
- Update your sales forecasts (and keep them updated). Frequent updates will help you gauge exactly what the demand is and where it’s coming from. Be sure to share updated reports with your logistics providers, who will need them to be able to execute your transportation plan.
- Check your supply chain, and then check it again. Make sure you’ll have the raw materials that you need to be able to manufacture and distribute your products, or make arrangements for alternate sources of supply.
By taking these steps now, you can ensure your chances of having a successful, profitable holiday season during any economic conditions or freight environment.
