Consumers are making their holiday shopping lists, emails about Black Friday deals have started arriving in inboxes, and peak season is just around the corner. During a year characterized by historically tight capacity, shippers should enter peak season prepared for even harsher conditions.
“You are going to have a boom with e-commerce and retail, but you have also got all the supply chain disruptions that are already happening across the country that are going to have an impact on all verticals, which will make for an even more elevated peak season for us as we head into the fourth quarter,” said Drew Wilkerson, XPO Logistics president of North America transportation.
The market is relentless, and shippers — including large Fortune 500 operations — are looking to increase capacity significantly moving into peak season. This will prove challenging as demand continues to outpace supply. Building strong partnerships with prepared carriers and 3PLs — like XPO — is the best way shippers can ensure they have access to the capacity they need to meet their own peak-season demand.
“The first thing that differentiates us is our scale. If you look at the number of companies that are able to create solutions at scale and take on massive amounts of volume, there is only a handful that can do it,” Wilkerson said. “We are one of those that can flex capacity up to meet demand from our customers.”
XPO’s long-term commitment to technology has helped the company scale and become more flexible for its customers. XPO has spent over $3 billion on technology over the past decade. Its industry-leading technology like XPO Connect also allows customers to access all the data they need to make informed transportation decisions, as well as complete visibility and supply chain guidance.
Wilkerson made it clear that XPO will continue investing in solutions to solve shippers’ real-time problems, meeting them where they are today.
“We work with our customers to create unique solutions. We started with drop trailers five or six years ago,” he said. “Right now, transloading is really relevant with what you’re seeing at both the East and West Coast ports. We have amped our efforts in that area. We will also continue to invest in cross-border shipping.”
There seems to be one question on every shipper’s mind: When will the market go back to normal? While it is difficult to predict exactly what will happen after peak season, experts agree that the current supply and demand imbalance will stretch into the new year to some extent. This makes it even more important for shippers to make sure they are prepared to face the demands of the coming months.
“I don’t think any of us have a crystal ball, but right now, we’re seeing the tightest capacity that we have ever seen. We are seeing ships backed up on the East Coast and on the West Coast, and they’re backed up at record levels,” Wilkerson said. “Right now, we are expecting capacity to be tight in 2022. Whether we have to flex our capacity up or down, we are ready for 2022.”