Feature / 17 Dec 2023

Unwrapping the challenges of peak season in supply chain and logistics

The holiday season is upon us, and the supply chain and logistics industry are in the midst of one of the busiest times of the year. This bustling period, marked by heightened consumer demand and frenzied shopping, brings forth a myriad of challenges that logistics professionals must adeptly navigate to ensure seamless operations.

Usually there are two peak seasons every year. The first one is between September and December due to events such as Black Friday and Christmas, and the second peak would be shortly before the Lunar New Year in January and February. Peak seasons tend to be synonymous with a surge in consumer demand, making forecasting and inventory management a delicate balancing act.

However, a supply chain survey conducted by CNBC in October 2023 among logistics executives who manage freight manufacturing orders and transportation shows that retailers and shippers have mixed views about consumer spending outlook during this holiday season.

The survey found respondents almost exactly split in their outlook for 2024. In the first half of next year, 34% expect freight volumes to be down up to 10%, 33% of participants said it would be unchanged, and an equal percentage expect an increase of 5%.

Freight forwarders face a surge of activity during peak seasons. An influx of cargo can lead to capacity constraints, which can lead to infrastructure strains and delays in the supply chain. It is vital that logistics providers are well-coordinated and transparent about all aspects of the supply chain to ensure that any of these risks are managed effectively. On top of demand forecasting and planning, they also adopt a dynamic approach towards warehouse sizing and inventory management to manage trade fluctuations.

Keeping stock moving
According to the CNBC survey, 67% of logistics firms say products being moved into stores this holiday season are more promotional and lower-cost items. An even larger majority (83%) indicated that they are not moving more higher-priced items. This means that, more than ever, more and more cargo is heading from ship to shelves.

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GAC’s specialised freight forwarding, contract logistics and value-added services such as component assembly, repacking and labelling enable us to provide our customers with multi-faceted support to help them increase their competitive advantage and meet seasonal demand. Further, cross-docking and fast flow-through capabilities can be activated when timing is crucial and cannot be moved to help ensure speedy delivery to market.

For Trevor Stamp, General Manager of GAC Dubai’s Contract Logistics operations, GAC logistics services have the flexibility to manage all manner of cargo challenges and keep stock moving smoothly.

“The key is to work closely with our customers to guarantee a secure supply chain by providing the tailored services they need,” he says.

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“Peak seasons always bring challenges, especially with the growth of e-commerce. At GAC, we have always been prepared for any increase in demand for both our warehousing and logistical services.

“With our comprehensive management solutions, we can ensure that customers’ needs are met with cost-effective end-to-end service packages.”

Agile system
GAC’s warehouse operations are supported by its advanced warehouse management system (WMS). The system produces real-time snapshots of stock levels and issues advance alerts when new stock is required. The agile system can be customised to meet customers’ distribution demands, leading to better inventory control and production management.

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“Real-time tracking and visibility are vital to ensure timely deliveries and meet our customers’ expectations,” says Trevor.

“By providing insights and data on all aspects of cargo management, we have built trust with our customers for our openness and transparency in contract logistics.

“This is particularly the case during peak seasons when traffic is high and the risk of financial implications if stock does not reach its destination in time is profound.”

The supply chain and logistics sector must be prepared for any challenge that can arise during peak seasons. GAC continues to take proactive measures to address potential issues whilst implementing robust strategies.

By leveraging technology, optimising processes and fostering a collaborative workforce, businesses can not only survive but thrive during the demanding peak season, ensuring customer satisfaction and operational excellence.

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