The peak season for ecommerce businesses and retailers is just around the corner, sparking both excitement and panic in small and growing businesses.
While major events like Black Friday and the winter holidays can lead to substantial increases in revenue for organizations, too many customer orders and shipments can strain supply chains, budgets, and logistics systems alike.
Heading into 2025 – the age of the modern customer – SMBs face a host of new issues, as geopolitical conflicts and trade route issues have emerged, leading to increased container and freight costs. To ensure businesses can take full advantage of the benefits of peak season sales, small business owners will need to start implementing efficient shipping strategies quickly.
Rising Costs and New Challenges Impacting SMBs
Peak shipping season, also known as the period between October and January, refers to a period when order and shipment volumes increase drastically for businesses. There are more orders to fulfill, more returns to process, and more customer interactions to navigate.
During this time, supply chain efficiencies and shipping issues can naturally arise for any ecommerce or retail company. The more the ecommerce landscape continues to grow, the greater shipping challenges become as brands struggle to keep up with new demand.
This year, not only are ecommerce sales set to increase by a further 8.8%, but organizations will have to tackle a new range of challenges. Since the start of the Middle East war in October, global trade and shipping routes have been placed under immense pressure.
The issues in the Red Sea have led shipowners to be confronted with higher insurance premiums, as the risk of vessel loss has dramatically increased. Additionally, maritime companies implementing new routes to avoid the Suez Canal are using greater volumes of fuel. The result is higher freight costs for companies shipping products worldwide.
According to the Drewry WCI composite index, while the average cost of a 40-foot container is 47% lower than the previous pandemic peak recorded in 2021, it’s 291% more than the average 2019 rate and $1,204 higher than the 10-year average rate.
How SMBs Can Prepare for Peak Season Shipping: Top Tips
Increased demand from shoppers alongside higher shipping rates means SMBs will need to take a strategic approach to preparing for the 2024 peak season. Leveraging opportunities to increase sales while keeping costs low and delivering consistent customer experiences won’t be easy.
Here are some of the best ways SMBs can prepare to navigate this difficult landscape:
1. Plan Ahead
Ultimately, the earlier you start planning for peak season, the more prepared you’ll be. Leveraging the data you already have, as well as analytical and forecasting tools, will help you determine how to optimize stock levels and reduce the risk of stockouts.
Examine your historical data and seasonal changes in sales and think through planned promotions and sales, such as “Black Friday” deals. Planning ahead will also give you an opportunity to keep customers informed of any potential issues or delays they might experience.
Make sure you have a strategy in place for proactively communicating with customers about holiday shipping deadlines and disruptions. Offering customers access to order-tracking tools can also help keep them informed and improve the level of trust they have in your business.
2. Consider LCL Shipping
With the average cost of a large container rising in 2024, SMBs may need to consider branching beyond “FCL” or full-container load shipping. Working with a freight forwarder that offers LCL shipping for small volumes of cargo can help SMBs save significantly on shipping fees.
For smaller businesses that don’t need access to an entire container with each shipment, LCL shipping, also known as less-than-container load, significantly reduces operational expenses. However, it’s important to remember that not every freight forwarder takes the same approach to LCL shipping services.
Ensure that the freight forwarding partner you choose to work with can guarantee allocation for your shipments, support door-to-door and port-to-port delivery, and provide comprehensive access to shipment tracking tools so that you can better manage your shipping process.
3. Diversify Your Logistics Strategy
As new challenges continue to arise in the global shipping and logistics landscape, diversification can be a good way to protect your business from unexpected disruptions. For instance, one option is to consider working with multiple shipping carriers. This gives you more flexibility, allowing you to experiment with ocean, land, and air freight options.
Diversification of shipping carriers also helps to compare based on shipping rates, delivery times, and services, reducing costs and enhancing customer experience at the same time.
Another way to diversify your logistics strategy is to consider storing popular inventory across multiple warehouses and global locations. Sending inventory to locations closer to your customers in advance can help you stay ahead of global freight issues and offer faster delivery speeds to your customers, even during peak season, when routes are likely to be more congested.
4. Communicate with Your Suppliers
Working closely with manufacturers and suppliers prior to peak shipping season can help minimize the risk of stockouts and optimize your sales potential. Share your predicted order volumes with suppliers as soon as possible and account for longer lead times caused by port delays, supply chain issues, and natural increases in peak season demand.
Setting expectations with suppliers in advance will help you prepare for any hurdles you might face as sales volumes increase. You may even decide that, prior to the peak season, it makes sense to work with a range of different suppliers offering similar products to reduce the risk of missing inventory.
Increasing your number of available partners will help you sidestep backlogs and other issues that can increase lead times and cause late deliveries for your customers.
5. Take Advantage of Supply Chain Tech
Even outside of the peak shipping season, it makes sense to take advantage of technologies that can improve how you manage and organize your supply chain. Take a closer look at your:
- Warehouse management system software
- Inventory management software
- Solutions for order management and processing
- Returns management system
- Ecommerce fulfillment applications
A robust and streamlined technology stack will help you process orders faster during the peak season, improve order accuracy, and boost overall operational efficiency. It will also help you access valuable data you can share with your suppliers, logistics companies, and freight forwarders, keeping everyone on the same page.
6. Upgrade Your Approach to Customer Service
Finally, remember that thriving during peak season isn’t just about selling as many products as possible. The customer service you deliver during this hectic period will shape how customers feel about your brand, determining whether you’ll be able to earn their loyalty.
Therefore, it’s important to review your returns policies and processes and share them with customers, ensuring they know how long they’ll have to return gifts, if necessary. Make sure you have enough people on your customer service team to answer inquiries about delivery times, delivery cut-off dates, and discounts.
Train your team to ensure they’re aware of your promotions, the shipping options available, and the delivery issues your company might encounter. You can also consider using automated tools and chatbots to rapidly answer common customer questions through your website.
Prepare for Peak Shipping Challenges in 2024
While peak season has always been challenging for small businesses to navigate effectively, 2024 introduces new challenges to overcome. With higher shipping rates to manage, alongside increases in customer demand and an unpredictable landscape, SMBs must ensure they’re prepared.
Planning ahead, working with the right partners and suppliers, leveraging innovative technology, and ensuring you are ready to deliver an exceptional customer experience will be crucial to your success.
