How to Mitigate Risks in Holiday Container Shipping

Along with cheer, the holiday season brings with it an inevitable surge in cargo shipping volumes to accommodate increased consumer spending. This rush puts immense pressure on global logistics operations. For shippers, this period presents a host of risks and challenges ranging from vessel capacity constraints to port congestion, overcrowded warehouses, last-mile delivery challenges and increased reverse logistics activity.

As we enter the busiest shopping months of the year, it is critical for wholesale distributors and retailers to prepare, adapt and optimize their shipping strategies in order to protect their supply chains, meet the demands of consumers and ensure high service levels throughout the period.

Stresses in holiday shipping

The holiday rush is most often associated with Black Friday, Christmas and Boxing Day shopping in November and December. However, other holiday seasons around the globe also see spikes in consumer buying and associated supply chain pressures. According to Maersk, other peak logistics periods include:

• Lunar New Year: January or February in much of Asia, following which it takes four to six weeks for factories and port operations to return to normal levels after the holidays.
• Carnival: February or March in Brazil.
• Summer Holidays: July-August in the northern hemisphere and December-January in the southern hemisphere

During holiday periods, consumers expect faster shipping and hassle-free returns. This puts pressure on shippers and retailers to meet those expectations while maintaining quality and timeliness.

These peak volumes create stress in supply chains especially around warehousing, distribution, fulfillment, last mile and reverse logistics. Shippers should recognize these pressure points and make a plan for handling the increased demand.

Staying on top of shipments in the build up to Q4 can be overwhelming. Real-time visibility tools can streamline your workflows and save you precious time. A good visibility tool will facilitate seamless document management, automate freight tracking and let you share live order and shipment updates with warehouses and customers.

Preparing for the holiday rush

Scenario planning is the best way to protect your supply chain from the risk that comes with the holiday rush.

1. Secure space for your containers early

Finding enough carrier capacity at the right price during this period can be a challenge as there are usually peak season surcharges and other delay surcharges during this period which can put pressure on shippers. Shippers should work with carriers and logistics partners to plan ahead and secure capacity contracts to mitigate against these risks.

This can be done by negotiating early with carriers and focusing on space availability (rather than just pricing) to ensure that the space is available on priority.

2. Ensure sufficient warehouse and transport capacity

In addition to vessel capacity, shippers must also consider factors such as warehouse management and delivery networks. During holiday seasons it is common to find that warehouses, fulfillment centers, labor and delivery networks are all stressed due to congestion caused by larger than normal volumes.

This has the potential to create disruptions in inventory operations and have a knock-on impact on customer delivery times as everyone is clamoring for the same space and delivery schedules.

3. Frontload inventory

While carrying excess inventory does come with a cost, it is a form of insurance against the unpredictability that comes with Q4 shipping volumes. For non-perishable and durable goods, plan to bring cargoes in during non-peak periods to avoid the holiday rush. This would be beneficial for vessel space, freight rates and equipment.

4. Develop contingency plans for last-mile delivery  

Consumers today expect a variety of options including same day delivery, curbside pickups and alternative delivery locations. To deliver the omnichannel customer experience, shippers must prepare for last-mile delivery complications including urban congestion, traffic, the availability of customers for delivery and a host of other factors that can add pressure on logistics network operations.

Shippers should have a backup plan for last-mile delays including relationships with a range of local couriers or creating micro-fulfilment centers especially in major metros which can make a significant difference in improving operational efficiencies and meeting consumer demands.

Managing the chaos with a visibility platform

While good planning will put you in a strong position to get through the holiday period with minimal disruption, there will inevitably be issues. 

Adopting a supply chain visibility platform (like Beacon) will ensure you are alerted to delays and disruptions as soon as they arise. By tracking all your shipments in a single hub, visibility solutions provide a single source of truth and can help you understand where things are in just a few clicks. 

Collaborative visibility platforms take things a step further by enabling data sharing, communication and document management across supply chain stakeholders. By giving everyone real-time access to the same information, you can improve transparency, reduce logistics admin and move quicker to mitigate issues as they arise.

Building a holiday shipping playbook

At the end of the season, it’s good practice to do a retrospective analysis (“post mortem”) to understand where things went well, and where they went wrong so you can document lessons learned for next year. These insights can be fed into playbooks that outline best practices for managing the risks associated with the holiday period. 

A successful Q4 starts with a good plan

The holiday season poses several unique challenges for retailers, wholesale distributors and the logistics services industry. Through careful planning and proactiveness coupled with advanced technologies, these challenges can be overcome or their impact minimized.

Real-time visibility solutions can help you stay on top of all your orders and shipments amidst the holiday chaos.