In this guest post, Marie Barrance, Sales Director at Asendia UK discusses the urgent need for strategic planning for ecommerce retailers to navigate Q4 air cargo challenges in 2024:
As the Golden Quarter approaches, ecommerce retailers are gearing up for one of the busiest times of the year, regardless of their chosen sales channel. The combination of increased holiday shopping and potential disruptions in air cargo services poses significant challenges to sellers with customers overseas. To stay ahead of these issues and ensure smooth operations, international ecommerce businesses must prepare a strategic approach.
Understanding the landscape
Recent trends indicate a significant shift in the air cargo market. Disruptions in ocean freight, heightened ecommerce activity, and fluctuations in global manufacturing are contributing to a tight air cargo market. With experts predicting a surge in demand, it’s essential for retailers to understand and anticipate these dynamics.
Recent reports highlight a notable increase in air cargo demand. In June, the demand for air cargo, measured by chargeable weight, rose by 13% compared to the previous year. This increase follows a pattern of rising demand observed throughout the first half of 2024. However, air cargo supply has only grown by 3%, creating a stark imbalance. This discrepancy suggests that securing cargo space for ecommerce parcel deliveries will become increasingly challenging as the peak season approaches, potentially leading to higher costs and limited availability.
Strategic preparation for cross-border deliveries during peak season
To navigate the upcoming peak season successfully, retailers need to adopt a proactive approach. Strategic planning and early preparation are crucial for managing the increased demand and potential disruptions.
1. Early engagement with logistics partners
One of the most effective strategies for managing peak season logistics is early engagement with logistics partners. Retailers should start discussions with their logistics providers well before the peak season begins. This early engagement allows for the negotiation of bulk service agreements, ensuring that necessary air cargo space is secured in advance. By sharing sales forecasts and marketing strategies with logistics partners, retailers can help tailor their services to meet seasonal demands.
2. Customisation of shipping strategies
A one-size-fits-all approach is not effective during the peak season. Retailers should work with their logistics partners to develop customised shipping strategies that address specific needs. This includes planning for extended shipping routes, potential delays, and customs complications. Customised solutions can help mitigate risks and ensure that shipments are handled efficiently throughout the peak period.
Efficient customs clearance
Customs clearance can significantly impact the efficiency of peak season deliveries. Delays at customs can disrupt the entire supply chain, leading to late deliveries and frustrated customers.
To avoid customs delays, retailers should ensure that all necessary documentation is prepared well in advance. This includes accurate and complete paperwork for each shipment. Working with logistics partners who have expertise in customs processes can help streamline operations and minimise the risk of congestion. Additionally, choosing logistics providers with relevant accreditations, such as a Memorandum of Understanding (MoU) with HM Revenue & Customs, can expedite the clearance process.
Despite thorough preparation, unexpected issues can arise. Retailers should work with their logistics partners to develop contingency plans for potential customs bottlenecks. These plans should include alternative procedures and solutions to address any issues that may emerge during the peak season, ensuring that operations remain smooth and efficient.
Leverage data and analytics
Data-driven decision-making is essential for navigating the complexities of the peak season. By leveraging historical sales data and market insights, retailers can create accurate forecasts and optimise their logistics strategies.
Retailers should analyse historical sales data to identify patterns and trends that can inform peak season planning. Advanced analytics tools can help predict demand spikes, allowing retailers to adjust their inventory and shipping strategies accordingly. Accurate forecasting enables better resource allocation, ensuring that inventory levels and shipping capacities align with anticipated demand.
While forecasting sets the foundation for peak season planning, real-time monitoring is crucial for managing unforeseen challenges. Advanced tracking systems provided by logistics partners offer visibility into the supply chain, allowing retailers to monitor shipments and address potential issues as they arise. For example, if disruptions occur at a specific airport, alternative routes can be utilised to minimise delays.
Building strong relationships with 3PLs
Strong partnerships with third-party logistics (3PL) providers are vital for navigating the peak season successfully. These relationships should be based on transparency, collaboration, and mutual goals.
Retailers should foster a collaborative relationship with their 3PL partners, focusing on open communication and shared objectives. This collaborative approach helps ensure that both parties are aligned in their efforts to manage peak season logistics effectively. Regular meetings and updates can help address any issues promptly and keep operations running smoothly.
The peak season presents an opportunity for continuous improvement. Retailers and 3PL partners should review performance metrics and identify areas for enhancement. This continuous improvement process helps refine logistics strategies and adapt to changing market conditions, ensuring better preparedness for future peak seasons.
During holiday peak, ecommerce retailers face a range of challenges related to air cargo demand, customs clearance, and logistics planning. By adopting a proactive approach and preparing early, retailers can navigate these challenges effectively. Staying agile and adaptable at Christmas will ensure smooth operations and enable retailers to meet the high demands of the busy season, maintaining customer satisfaction and operational efficiency.
