A Challenging Peak Shipping Season Ahead
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This year’s peak season—generally the onset of fall through December—will be stronger than ever, thanks to high volume for the holidays and burgeoning demand overall. Although this is usually good news for all members of the supply chain, heavy delays and tight capacity will present challenges. Preparing now can help you avoid problems, meet capacity needs, and maximize your success.
Peak Shipping Season Challenges
A recent survey from Logistics Management reinforces the industry-wide sentiment that this peak season will be more active than last year due to increases in imports and new orders, as well as an improving economic outlook and the perception of a waning pandemic. However, several issues could present setbacks:
Port congestion and container shortages
Record numbers of shipping containers are already congesting U.S. ports and creating bottlenecks in the supply chain. The arrival of backlogged and holiday freight compounds the problem. Already projected to reach a record-breaking 25.9 million containers this year, container volumes are not likely to decline until well into 2022.
Truck and trailer shortage
Although truck utilization is at or near 100% and orders for new trucks are up, production of new trucks and equipment has stalled. Prices for industrial materials have increased so quickly and significantly that manufacturers are waiting for more pricing certainty before filling orders.
Major disruptions caused by Hurricane Ida have worsened existing delays as we enter the peak month for storms. In addition to tighter capacity in Louisiana due to transporting emergency materials, flooding in New Jersey and Pennsylvania kept trucks off the roads. Carriers also tend to avoid threatened areas until they have cleared, which means capacity constraints building up across the supply chain will last for weeks or even months.
Railroads face congestion and poor service issues as shippers turn to rail transportation amidst tight truck capacity. High demurrage charges due to long container dwell times have increased shipper concerns and complaints. Despite problems, intermodal volumes are predicted to increase 9% this year as congestion continues to rise.
The trucking industry is desperate for drivers, but obstacles persist. Companies are offering pay increases and better working conditions to attract drivers, especially females. But COVID-19 has made it difficult for prospects to get training and licenses to operate commercial trucks, and new drug testing requirements are thinning the already decreasing workforce. Warehouse space is also in short supply, in part because of labor shortages. Some employers are increasing wages to recruit enough workers for peak season as COVID-19 unemployment benefits expire.
How to prepare for peak shipping season amid current challenges
Peak season presents supply chain obstacles every year. Although this year’s unusual conditions could cause more setbacks, there are ways to rise to the challenge:
Work with a freight broker or third-party logistics (3PL) provider
A 3PL offers advantages for shippers when capacity is tight. Leveraging connections to extensive networks of contracted carriers, a 3PL offers more reliable trucking capacity and access to more competitive rates. Capstone Logistics provides:
- Contracted capacity – Custom routing guide development with reliable carriers for your most important lanes
- Backup capacity – Fixed-price solutions for when primary carriers cannot uphold commitments
- Project capacity – Capacity and fixed pricing for short-term and long-term projects, waves, and other duration-specific needs
- Ad hoc capacity – Assistance with overflow, recovery loads, or seasonal surges to minimize disruptions to your supply chain
Outsource warehouse support services
By outsourcing warehouse functions to a third party, you can scale your operation to accommodate demand surges quickly and cost-effectively. A third-party provider can place skilled labor, management, and function-specific technology in your manufacturing or distribution facility to drive peak performance. Warehousing and Distribution Services from Capstone Logistics can handle everything from the entire warehouse to any single function within it.
Rise to the Shipping Challenges Ahead
Ready to maximize your success during the busiest peak season in recent years? Whether you need access to reliable trucking capacity, short-term warehouse labor or full-service warehouse management, Capstone Logistics can help you maximize your success affordably during uncertain times. Contact us to explore available options and get started.