October 30, 2023

Shipping Peak Season is Almost Here - Analysis 2023 (USA)

Peak seasons are the busiest time for shipping companies and other key players in the supply chain. Although peak season begins to take shape in August, it enters full gear in November and December. This isn’t a new occurrence as it is a yearly scenario in the supply chain. However, how the industry shapes up to meet the demands of the peak season tends to differ from year to year. 

With the current position of the industry, it is predicted that several key players such as shipping companies and last mile delivery service providers will increase fees to cater to the fulfillment demands of the peak season. 

 A Quick Look at Service Providers With A High Possibility of Extra Fees for Peak Season

One thing is common during peak seasons – surcharges placed at different stages of logistics process to offset the extra labor and resources. 

  • OnTrac surcharges will be placed on residential packages and this will kick off from the 28th of October 2023 to 12th of January 2024. The extra fees will be charged based on the shipper’s baseline volume. Surcharges range from $1.35 to $6.40 per shipment. 

  • UPS surcharges will be focused on high volume shippers. Surcharges will also cover heavy, large and difficult-to-handle shipments. The extra fees ranging from $1.35 to $7.50 per shipment will be charged from 29th of October 2023 to the 13th of January 2024.

  •  GLS is looking to set a flat extra fee of $1.50 covering residential deliveries. This will take effect from 30th of October 2023 to 7th Jan 2024. 

  • FedEX is set to impose surcharges on high volume shipments. With the surcharges per shipment ranging from $1.35 to $6.35 for ground shipment and $2.40 to $7.40 for express shipment, FedEX is getting set for the peak season. These surcharges takes effect from 30th October 2023 to 14th Jan 2024. 

Although surcharges comes to play in peak seasons, there are companies that do not impose these extra charges. In the USA, service providers that are partners of the US postal services have shown intentions not to impose peak season surcharges. 

The spokesperson of DHL eCommerce via an email says they will not impose peak season surcharges this year. The CEO of OSM Worldwide, Gaston Curk gave a statement that they will be able to avoid extra charges on shipments. Other service providers that won’t be imposing peak season surcharges include Halify, Veho, and AxleHire. 

Why Peak Season Surcharges?

The interaction between the forces of demand and supply creates the peak season. It is a time of high demand compared to relatively low supply forces. The high demand creates pressure and often disrupts the even flow and balance of the supply chain. 

The pressure of high demand in peak seasons results in warehouse and port congestion, the need for increased labor time and effort, and delays in delivery. In a bid to push up the supply to meet the high demands of peak season, carriers and other key industry players put in more regarding personnel, equipment, time, and other resources. All these come with increased expenses, hence the need for peak season surcharges. 

Advice for Shippers/Businesses Regarding The Peak Season

According to Carson Krieg, the director of global alliances at Project44, over-communication is a significant measure for businesses and their carriers in peak seasons. His statement is hinged on the fact that demand and supply forecast is a must for all parties and must be shared for smooth navigation through peak seasons. 

Embrace Data

Building upon the words of Carson Krieg, the director of Global Alliances at Project 44, Data is pivotal. There is a responsibility for shippers and businesses to pay more attention to demand forecasting and planning. This way, businesses can predict customer behavior and needs for the peak season. 

With data and the company's historical records, businesses can know areas of heavy surcharges and communicate appropriately to the carriers. This is a trigger for better negotiation for the best of both parties. 

Deploy the Priority Game

During peak seasons it may be difficult to execute fulfillment to every location within your region of operation. Prioritize areas of larger volumes of packages to be delivered. Companies can cut down on transportation surcharges. 

Be in Sync With the Carrier

Effective communication between shippers/businesses and carriers is the way to go in peak seasons. Let in carriers on sales and order details regarding volume analyzed from the forecasted data. Efficient data sharing will help negotiations, speed, and overall efficiency. 

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