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IFS Sept 2020

Published: Sep 24, 2020   |   
by: ImpactFS   |   
Category: Newsletter

PEAK SEASON 2020

It may be crazy, be prepared

Fulfillment operations experience a peak season, which orders volume increase above the average from 2X to 10X. Companies rely on seasonal labor most of the time, as sudden adjustments are not efficient or cost-effective unless automation has been considered prior.

No one could predict disruption in Q1 and Q2 2020; we still see the effects of global supply chain issues and changes in customer purchasing behaviors; here is good news; things will keep changing. It is a good thing because changes are opportunities, as anticipation is powerful.

What peak season will look like? 

It seems no one agrees on that, but it is true that we need to learn from what we did not do right or from what we did not prepare for during the initial disruption in 2020 and prepare for different scenarios as possible and incorporate all resilience to our supply chain to be sure we have a contingency plan in place in case anything goes south, whether volumes go beyond expected and equipment and labor shortages are the topics of the day. More pessimistic folks said that we wouldn’t have peak season this year

We are fast approaching, and pressure is on for international shipping; carriers have canceled hundreds of sailings this year, and the blank sail is a new standard, equipment shortages, and of course, the result has been much higher rates, more than one General Rate Increase (GRI) for some steamship lines and anticipated Peak Season Surcharge (PSS), it is not a good thing. Still, it is real, and we have to add the trade war that has not ended yet.

An essential tip for manufacturing companies, especially those running overseas, is to ramp up production to accommodate ocean freight longer transit times instead of the extra cost of express LCL or Airfreight. Also, to breakdown large shipments into fractions and ship them using different methods of transportation to avoid any inventory availability delays.

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