Retailers’ Guide to Optimizing Logistics Strategies for Holiday Season
by: Steve Moore, Vice President, Operations, Transplace
Sales for the 2021 holiday season are expected to grow 7% compared with last year’s 5% that beat industry expectations, according to forecasts from Bain, Deloitte and Mastercard.1 Research firm Insider Intelligence says ecommerce will account for a record 18.9% of total holiday season retail sales.2
This growth places pressure on an already challenged market experiencing high container prices, tight capacity, labor shortages and port congestion resulting in added costs and lead time to inbound shipments. The National Retail Federation (NRF) monitors U.S. ports covered by Global Port Tracker and says the full year 2021 is on track for shipment volumes to total 25.9 million twenty-foot equivalent units (TEU), which is up 17.6% over 2020 and a new annual record topping last year’s 22 million TEU. “We’re seeing issues ranging from port closures in Asia to ships lined up waiting to dock at U.S. ports. That’s creating continuing challenges as retailers work to supply enough inventory to meet demand,” said Jonathan Gold, NRF Vice President of Supply Chain and Customs Policy.3
What can retailers do to get their seasonal goods to market at the best possible price, gain visibility and improve reliability in their supply chain?
Here are tips for retailers to optimize logistics strategies for the 2021 holiday season and beyond.
Elevate Logistics Planning
Developing a comprehensive logistics plan to prepare for peak seasons and holidays well in advance can go a long way to manage through the chaos and mitigate service risk.
By leveraging managed transportation services (MTS), retailers gain access to best-in-class logistics strategies and advanced technologies to synchronize supplier compliance, order fulfillment and other processes that result in greater efficiencies and resilience to changing consumer demands.
An MTS partner not only provides technology solutions but domain experts that collaborate with you to begin planning well in advance of peak seasons. They should also manage networks that optimize inbound and outbound transportation, ensuring products are delivered to the right place on time and on budget.
Increase Real-Time Network Visibility and Predictability
Today’s dynamic retail supply chains require greater levels of visibility and predictability. With AI and machine learning, leading-edge transportation management systems (TMS) can process thousands of data points within seconds, offering business intelligence and predictive analytics to assist in avoiding delays. Shippers can gain a rapid understanding of changing transit times that are imperative in calculating dynamic lead times to be used in near term order cycle management.
Control tower and mobile app technologies offer real-time logistics visibility for proactive decision making. Leading retailers use these tools to schedule the right quantity and timing of receiving labor to unload freight when shipments reach distribution centers. With proactive visibility, they can gain more control over labor planning and costs.
Expand Shipper-Carrier Collaborations
As driver shortages add even more pressure to retailers’ supply chain, collaborative shipping allows access to more carriers and modes of transportation. Through strategies like multi-shipper collaborative fleets, shippers can benefit from fleet assets growing two to three times in 24 months.
MTS partners with robust shipper-carrier networks and collaboration platforms can find the capacity shippers need – even in a tight freight market.
For example, those with freight collaboration technology can instantly identify millions of pairing possibilities for creating continuous moves opportunities among their customers to drive capacity and efficiency. In addition, supply chain networks can be optimized with strategic designs that place inventory closer to customers while improving service and cost management.
Enhance Ecommerce Efficiencies
Retailers that are consistently agile to shifting consumer ecommerce behavior and focus on winning the final mile and meeting delivery expectations will remain competitive and positioned for growth.
Many are seeing the benefits of a ship-from-store fulfillment strategy. With ship-from-store, retailers can fulfill demand via multiple channels including drive-up, in-store sales or online orders, all from one location. According to Target’s earnings release, same-day services including order pickup, drive-up and Shipt grew 212% year-over-year for the full year 2020.4
To help execute these strategies, full-featured parcel transportation management systems (PTMS) are enterprise-class, multi-carrier solutions that help maintain stability while avoiding disruption for parcel shipping. World-renowned retailers are using this technology to streamline and optimize carrier and service method selection. A PTMS can also support label printing, real-time tracking and business intelligence reporting at scale while handling complex configurations for carrier agility, temperature sensitivity, cold chain variables, regulatory compliance and supply chain complexities.
Bolster Customer Experience
Retailers must also manage the customer experience and expectation setting by creating seamless experiences for consumers shopping in-store, online or mobile. Every expectation needs to be unique and managed at scale. By providing real-time delivery dates, options for in-store pickup or local delivery, the expectation is met at every point by the retailer.
MTS partners play an important role in achieving this by knocking down the silos between the ERP (enterprise resource planning) system, order management system and PTMS, integrating the systems to provide information for a superior, cohesive customer experience.
Using these best practices, retailers can be better prepared for the upcoming holiday season.
To learn more about Transplace’s Managed Transportation Services, Control Tower, Network Services, Parcel Transportation Management Services and TMS mobile app, connect with a Transplace expert.
1. “Fewer deals and shipping delays: Here are some early predictions for the holiday season,” CNBC, Melissa Repko & Lauren Thomas, 9/4/21
2. “How retailers can start planning for the 2021 holiday season,” eMarketer, Andrew Lipsman, 2/18/21
3. “Retail Imports Remain Strong But Growth Slows as COVID-19 Disruptions Continue,” National Retail Federation, 9/9/21
4. “Target expands sortation center model to optimize store fulfillment, Supply Chain Dive, Matt Leonard, 3/2/21