In 2023, there has been a shift in power back to shippers, with slowing demand and carrier capacity no longer constrained.
Holiday 2023 should present shippers with more options and control, but this year is not without some challenges. With economic uncertainty and new employee agreements for some small parcel providers, this year should be interesting — especially when peak season surcharges and General Rate Increase (GRI) announcements begin.
Here are some tips to help you make the most of this holiday season—and beyond.
- Importance of forecasting. As with any year, providing detail around volume and forecasts to carriers (not only small parcel carriers) becomes critical to ensure the timely delivery of peak season packages.
- Align with promotional and marketing efforts. One challenge we continue to see is alignment with Marketing and Operations during peak season. Understanding the promotions that will be running, whether the offer is free shipping or a specific SKU promotion, it is critical to map these to your forecast and volume commitments and make sure your team is on the same page.
- BONUS TIP: Understand SKU level profitability. Every year we encounter shippers who decide to run a promotion on an item, but ultimately when they review the data, they learn that they didn’t account for shipping cost in the promotion. Having the ability to measure SKU level profitability with total landed cost before running a promotion becomes critical.
- Create a diverse carrier network. In the past 3 years, it has been essential for shippers to engage multiple carriers in order to create contingency plans during the holidays. Shippers have learned that having a backup plan is critical. While capacity may not be constrained as much for Holiday 2023, it is important to still have those contingency plans in place.
- Remember carrier cutoff dates. With Christmas falling on a Monday this year, the last weekday for delivery is Friday, December 22nd. Review all carrier schedules to make sure those dates are communicated to customers.
Holiday 2023 may be one for the books with economic uncertainty, so plan early! Check out our Transportation Outlook for insights on trends and forecasts as we head into Q4 of 2023.