Summer is coming to an end which means retailers and supply chains need to start preparing for the holidays. With e-commerce on the rise, supply shortages, and COVID-19 restrictions causing shipping delays, this will prove to be a challenging year for order fulfillment. Now is the time to get your holiday plan ready to ensure on-time shipments.
After facing many disruptions last year, businesses are coming into the holidays more prepared than ever before. These preparations offer a new set of obstacles that must be overcome. Here are new challenges to avoid this holiday season.
Limited Warehouse Capacity
After the shipping delays and supply shortages that were caused by COVID-19, many businesses have opted to keep more inventory on-hand in distribution centers. The reason for this is to be prepared if manufacturers are forced to shut down due to outbreaks. This leads warehouses to operate at a much higher capacity than in previous years which limits the space available for increased holiday demand.
The higher demand for warehouse space can lead to increased costs and possible shortages if you cannot acquire the storage space you need. It’s important to contract warehouse space now, before the holiday surge.
Supply chains are congested due to a shortage of drivers and a backlog of containers from overseas, creating a bottleneck effect at the ports and rail yards. The shipments are ready, but a widespread transportation capacity issue has created massive freight delays. This is causing inventory pileup in a new way.
Before inventory pileup was storing more product than what was being sold. This was usually caused by poor demand forecasting on the product. Now inventory pileup is occurring from businesses storing more products at the yards and is forced to hold them due to limited shipping capabilities. With limited warehouse space, demurrage and storage charges at the yards become expensive very fast.
In August 2021 the unemployment rate decreased to 5.2%. This is a big improvement from earlier in the year, but many businesses are still struggling to fill positions. Labor shortages in manufacturing, warehousing, and shipping can create delays in order fulfillment so it’s important to plan ahead. Start hiring more employees in the leading months to ensure staffing needs are met. A proactive staffing strategy also allows you time to train and prevent employee burnout.
Partner With a 3PL
The seasonality of the holidays is stressful for businesses of any size. The best way to be ready for the peak shipping season is to start your preparations as early as possible. Partnering with an experienced 3PL provider like Evans Distribution Systems streamlines the process of securing transportation and space, processing orders and improving the overall customer experience.
For more information on a fulfillment solution contact Evans for a free quote.