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Top issues for supply chains for holiday shipping

This article is brought to you courtesy of NEXT Trucking

Have a detailed plan with your customer – third-party logistics firms (3PLs) need to receive detailed plans from customers about holiday promotions in order to plan for expected volumes. “Consumer demand is driving faster delivery times, and those expectations continue to rise. The most important thing for retailers going into the holiday season is knowing which products are in high demand,” said Mario Harik, Chief Information Officer at XPO Logistics.

Be flexible in positioning and operations around customer plans – 3PLs may have to reconfigure pick and pack lines around hot holiday items. That can mean pre-filling boxes with certain items expected to be big sellers or putting more workers on a particular stock keeping unit. 

Make sure that warehouse execution systems integrate with customer software – 3PLs need to receive ordering information on a continuous, real-time basis (even on weekends) throughout the holiday period to ensure timely delivery and maximum utilization of assets. But some enterprise resource planning software may only run on weekdays. “You want to have orders drop throughout the day, so if you have a commitment to ship by 12 noon, you want to fulfill orders all the way up,” said Robert Lilja, Chief Operating Officer of Weber Logistics.

Let clients know the increased costs of servicing their products for the holidays – 3PLs may have to double their staff, pay more overtime, or lease more space to deal with the increase in freight handling during the holiday period. “You are going to your clients and saying ‘I’m not footing this bill.’ Clients need to authorize the initial operations and they are usually pretty open to that” since holiday shopping is their biggest season of the year,  Lilja said. 

Understand the velocity increase around shipments – The already hectic holiday shipping season is further complicated by e-commerce fulfillment, which many 3PLs are taking up. “To help customers, we’re using machine learning to position inventory around our network to facilitate one- and two-day deliveries. And we’re deploying intelligent robots that help our people increase the speed of sorting, picking and packing orders inside the distribution center,” Harik said. 

Develop plans around outbound transportation – Whether goods are going directly to a customer for overnight delivery or to a retail distribution center for holiday stocking, it is important to coordinate with parcel and less-than-truckload carriers for time-critical, live load shipments or those shipments that can go into a drop trailer for later pick-up. “The parcel companies – UPS, FedEx and DHL – are all spotting equipment to use during this time. All those different protocols need to be integrated,” Lilja said. 

Make plans around staffing – Logistics companies may double their staffing levels over the holiday peak period. Companies need to make plans around how to best integrate those new workers, as well as fully utilize their regular employees. Even something as simple as catering lunch or scheduling vacations around the holidays keeps employee utilization high. “All the companies, including Amazon, compete for seasonal labor. We all have the same exact calendar push for employees,” Lilja said. “This is a holiday period, so make it as good an environment as possible.”

Develop a strategy around reverse logistics – The ability of a 3PL to provide an end-to-end experience for a product helps maintain customer stickiness. “More than just fast shipping, consumers also want a simple return policy. Our latest survey found 83% of consumers consider a retailer’s return policy before making a purchase. With online return rates of up to 30%, a solid return policy is an important part of the customer’s overall satisfaction,” Harik said. 

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes FedEx (No. 1), UPS (No. 2) and XPO Logistics (No. 8).