Carriers: 11 best practices for a successful Peak Season
- September 19, 2022
- 5 mins
As we mentioned in our webinar dedicated to the Peak Season in parcel delivery, anticipation is the key word to apprehend this crucial period. Usually in November-December, Peak Season can vary depending on the country and the players.
For logisticians, this business peak has a very strong impact on:
- Quality of service: today’s end customers have high expectations and demand impeccable quality of service. This will determine the memory they will keep of the carrier but also of the shipper for the following year.
- Profitability: this is the time of year when everything is at stake. The colossal volumes of parcels generate a large part of the turnover if this period is well managed.
The stakes are therefore high for parcel delivery companies, who are seeing the number of parcels to be processed explode and their organization disrupted.
In this article, we share 11 easy-to-implement tips to help you better address the peak period. These best practices come from the experience of our experts and from our observation of our clients’ activities.
#1 Analyze the activity of the previous periods and estimate its evolution
In order to predict your activity for the next peak season, take a look back at your activity from the previous year. This gives you a good starting point to build your predictions. With the development of e-commerce, volumes are increasing year after year. There is a high probability that your next Peak Season will be even more intense than the previous one.
When you have the volume of the previous year, apply a certain percentage of increase in activity: 3%, 5%, 10%… depending on your forecasts. This will give you a first global vision of the intensity of the period.
During peak season, some parcel delivery companies have to transport several million parcels in one day, which can put a strain on an entire organization! It is therefore important to be prepared. To do this, isolate the most intense day in your history and build your worst case scenario. Then anticipate the means to be put in place to face it in the most efficient way possible.
#2 Work closely with your customers to assess their needs
Today, your customers are more and more e-commerce websites. They possess a lot of data that can be quite predictive, especially thanks to the emergence of Artificial Intelligence tools that can anticipate the buying intentions of consumers. Your customers are thus able to estimate a very precise volume of activity. d’ qui permettent d’anticiper les intentions d’achat des consommateurs. Vos clients sont ainsi en capacité d’estimer un volume d’activité très précis.
The earlier you have this information, the better you can size your resources and incorporate them into your models. Communication and collaboration with your customers is therefore essential to help you assess their transportation needs and adjust your predictions.
#3 Give visibility to subcontractors regarding volumes to be processed
This communication is also essential with another stakeholder of your activity: your transport subcontractors. The peak period is intense for you but it is also intense for them. By giving them visibility on the working time, on the estimated volume of your activity, on what you expect from them, you will be better able to negotiate prices but you will also allow them to organize themselves to recruit in a more qualitative way. Indeed, this anticipation of recruitments will have a great impact on the field: novice drivers do not have the same productivity as experienced drivers.
With your activity forecasts, they will be able to estimate the number of drivers needed and start recruiting and training in advance to maximize productivity. The quality of service of your transport providers reflects on yours, so don’t neglect it! Having well-prepared subcontractors will help ensure the success of your peak season.
#4 Review contracts with subcontractors to anticipate the period and provide more flexibility on schedules
It is common to have annual or quarterly contracts with your service providers, but it is sometimes possible to review them in anticipation of the peak period. This time of the year is very important for your business, so it may be wise to adjust them. Build contracts specific to the peak season by defining a volume of activity and establishing bonus systems. Generally, contracts are based on a price per parcel but go further: put the quality of service at the heart of your collaboration to encourage them to surpass themselves.
#5 Recruit seasonal workers for picking and train them efficiently a few weeks before Peak Season
During peak periods, volumes are such that the recruitment of employees is essential in order to cope with them. As we have already mentioned, subcontractors must recruit drivers, ideally beforehand so that they are operational during the peak period.
The reinforcement of your teams can also be necessary: more and more companies call upon seasonal workers (students, temporary workers) whose mission is to manage the picking. They can also be brought to help the drivers in a punctual way. This allows the whole activity to gain in productivity since the drivers will spend more time on the road and less time sorting their packages.
#6 Sectorize your territory in an optimal way
In parcel delivery, territorial organization is generally based on a sectorization system where each depot manages several zip codes. Optimizing this sectorization allows to improve the performance of the routes but also that of the picking and sorting of the parcels in the warehouse, before their loading in the vehicles.
Still today, most of the actors of the sector carry out their sectorization once or twice a year manually on spreadsheets. Since business fluctuates a lot, especially during the peak season, it would be wise to review your sectorization on a more regular basis. However, when it is done manually, it naturally takes up a lot more of your teams’ time. This task can be automated with Kardinal’s Territory Analytics & Optimization (TAO) solution, which allows you to analyze your activity in depth and size your resources as accurately as possible.
#7 Simulate changes with a sectorization tool
We live in a world of constant change (explosion of e-commerce, new consumer expectations, development of green fleets, etc.). These upheavals can hit you hard, as was the case with the Covid-19 health crisis, and it is not excluded that this will happen again in the future. It is therefore crucial to be prepared for different possible evolutions and to anticipate those that may occur.
At each peak season, parcel delivery companies are facing record volumes: +25-30% volumes in 2020 compared to 2019 for Viapost, +8.6% in 2021 compared to 2020 for GeoPost/DPDgroup. This inevitably implies changes in the organization of these players. However, these changes can have a significant impact depending on whether you open a sub-depot, implement new services, sign new contracts, electrify your vehicle fleet…
To measure this impact, run as many simulations as possible: test different levels of percentage increases or analyze the differences in costs and performance if you change your fleet or open another depot. Build your best-case and worst-case scenarios to consider all possibilities. Also work with your contractors to estimate the number of drivers you will need based on your simulations. This is made easy with sectorization and optimization solutions such as Kardinal’s Territory Analytics & Optimization (TAO) that allow you to refine sectors and test the impact of local changes.
Even if the calculations are more complex without a sectorization solution, try to do some tests on basic route optimization. This will allow you to have a first idea of the gain linked to this optimization. Anticipating saves costs!
#8 Set up an inter-subcontractor and/or inter-depot competition on quality of service, number of packages, etc.
We share with you a good practice we have already seen in the parcel delivery industry: the implementation of a competition during the peak period in order to create an internal emulation among its subcontractors or within its depots. The goal is to invite them to improve their performance on different KPIs: quality of service, number of parcels delivered, level of productivity… It is up to you to define the game rules.
This initiative is not very expensive to set up, you just have to communicate well with your interlocutors. Generally, everyone gets caught up in the game, especially when a reward is at stake. This gamification allows you to invite your teams to surpass themselves to generate the best possible service while adding a more pleasant touch.
#9 Exchange zip codes with neighboring depots based on the previous year's history
You don’t do this very often: exchange zip codes from one depot to another based on activity, density, contracts that have been signed. However, it is sometimes much more interesting to think between depots with a more macro vision. It is estimated that 24% of parcels are transferred to another route each morning.
Zip codes are not always well sized according to the business and it may therefore be appropriate to review the distribution between the depots, especially if one of them is not performing well in a given territory. This is why it is important to have a precise vision of its activity and the performance of its transport subcontractors.
#10 Implement a two-waves system in the warehouse
As we know, logistics real estate is very expensive and logisticians are looking to optimize each space in order to amortize its cost. During peak season, warehouse capacities are quickly limited and with the influx of parcels, space becomes scarce. Some carriers have found a solution: the two-wave system where two departures are made on the same platform, one after the other. You can even go further and set up a triple wave system.
This operation requires a little more organization, but it allows you to make more routes in the same day and to deliver more packages. This is not negligible during the busiest days of the peak period! Faced with the explosion of volumes, you must be able to meet this demand.
#11 Automate route optimization with a tool capable of planning the delivery of millions of parcels per day
As we have already mentioned, peak season requires the recruitment of additional workers, especially novice drivers. These drivers are not yet familiar with their sector and need to be coached on route optimization. Try to simplify their work and increase their productivity by implementing a route optimization tool. This tool will take care of the complex calculations so that they can focus their time on the proper execution of deliveries in the field.
If you do not have employees dedicated to picking, you can implement an optimization solution to organize the drivers’ picking. It is essential to accompany them in the picking and to give them visibility on the points to be delivered so that no package is forgotten or delivered late.
To succeed in your peak season, it is essential to anticipate it well. This anticipation must be done in terms of data, resources but also processes. Many best practices exist to help you face this intense period in a more serene manner, use them! Kardinal’s solutions have been designed to help you optimize your transportation operations. Do not hesitate to contact us with your problems, we would be delighted to discuss them with you.
