BACK TO ALL NEWS & INSIGHTSPeak season is upon us! Inventory has been ordered, and most of it has arrived or will arrive by mid-October. Customers will soon be filling their holiday shopping carts, and online sellers will then face the challenge of getting all those orders to their customers.
December 19th is the last date to order items to reach consumers before Christmas. There are only 21 shopping days between Thanksgiving and December 19th. That's down five days from last year. UPS CEO Carol Tome recently predicted that this condensed holiday shopping period would produce the highest network volume. In addition to recording demand and the headaches that can accompany it, if you depend on the national carriers to deliver your orders, you'll be paying more for holiday surcharges this year.
Every online brand will face new challenges during the peak season in 2024. Successful peak season planning involves identifying potential "gotchas" and "choosing "an agile, responsive carrier that can mitigate the challenges when they arise.
Five things to consider for peak season 2024
1. Brace for higher shipping costs with national carriers
Following UPS’ recent announcement of new and increased holiday surcharges, industry analyst Nate Skivers quipped, “UPS is trying to bring a better pricing market into existence.” FedEx quickly followed with its holiday surcharge increases. That’s in addition to fuel surcharges and base rates that are rising faster than inflation. You’ll pay more this holiday season if you ship with national carriers. In some cases, a lot more.
For larger shippers, those peak demand surcharges are based on weekly volumes. The more successful your holiday promotions, the more you’ll pay per package, and you won’t know the cost until you see the bill. How do you plan for that? Mitigation strategies should include reviewing and possibly adjusting free and low-cost shipping tiers to protect margins and looking for alternative regional carriers to provide greater cost certainty in the dense metro markets where most customers live.
2. E-commerce demand remains strong
While holiday sales increased by nearly 4% in 2023, online sales increased by 8.8% over the same period, reflecting the growing preference for online shopping among consumers. That upward trend should continue. Business Insider reports that consumer confidence is up, with 50% of consumers expressing optimism about the economy (up from 26% last year) and 61% planning to budget more for gifts this year. A recent Shippo survey found that 61% of respondents favor online purchases over in-store shopping, emphasizing the increasing importance of reliable and cost-effective residential delivery for retail brands this holiday season.
3. Be prepared for disruption
Mike Tyson once said, “Everyone has a plan until they get punched in the face.” Disruption is a fact of life; how competitors adapt and adjust usually determines winners and losers. Disruption could come in many forms — carrier capacity, labor shortages, hidden costs, lead times, weather-based delays, and more. You need to be prepared for all of these. Like the Business Continuity Plan your business has in place to address natural disasters, IT outages, data breaches, loss, etc., you need a logistics continuity plan to address the uncertainties — capacity, lead times, costs, etc. — of last-mile logistics in 2024. Circumstances can and will change quickly this year, and you should be ready to pivot.
4. Consider diversifying your carrier strategy
Regional providers like Jitsu remain the fastest-growing sector in last-mile delivery, as many retailers look to diversify their carrier strategy. As Deloitte pointed out, “Emerging models like independent couriers, crowd-shipping services, and autonomous delivery can be layered into traditional methods to support growth and service performance.” Last-mile providers like Jitsu often provide lower costs in urban markets because they don’t have the exact sunk costs in overhead and fixed assets as national carriers. They can also offer faster turn-around, higher on-time delivery rates, lower package loss rates, and more personalized service. When looking at alternative providers, consider ease of technology integration, transparency, scalability, and cost as key criteria.
5. Spin up new providers now
One of the benefits of tech-forward, crowdsourced providers like Jitsu is the ability to spin up new capacity and new business quickly, sometimes in weeks, not months, but why wait until your company has a delivery emergency? If you’re considering diversifying your carrier mix, integrating new carriers into your technology stack is easier while your technology and operations teams still have time and space to breathe. Again, overall cost, ease of integration, corresponding time to market, and service levels are vital considerations when working with new regional carriers.
Jitsu believes this peak season will hold challenges for every online brand. Jitsu’s logistics experts can provide solid advice on how to prepare for peak season and mitigate those challenges. You can begin the conversation here.