How can parcel delivery services efficiently manage the peak period?
- May 16, 2022
- 4 mins
[REPORT]
Peak season: how to efficiently optimize your routes?
Black Friday, Christmas, sales… moments of the year so dreaded by the parcel delivery industry, where business peaks!
This critical time of year is called the “peak period” or “peak season”. It matches the sales peaks, in stores and online, that happen just before and during the end-of-year holidays.
The most important events of the peak season are:
- Single Day in China (November 11)
- Cyber Week with Thanksgiving, Black Friday and Cyber Monday (4th Thursday to 5th Monday of November)
- Christmas (December 25th)
These sales events significantly increase the amount of parcels to be delivered: carriers have to handle several million parcels each day, several times a month. In 2021, La Poste – Colissimo carried 100 to 120 million parcels between November and December. This intense period challenges their ability to adapt and can be difficult to manage if not well prepared.
So how can parcel delivery companies cope with the peak period while offering a quality logistics service? Read our advice on the subject in this article!
Manage the peak period efficiently
The peak season is a period that must be prepared months in advance — improvising would inevitably lead to failure. Today, many digital tools exist to help carriers manage their logistics operations. To cope with this very intense period, carriers are implementing a number of best practices that we will reveal in the following article.
1. Anticipate the quantities to be processed
By analyzing the activity of the previous periods (peak period of the previous year) and by following the market forecasts, as well as the evolution of their business activity (new or lost customers), carriers estimate the quantity of parcels they will have to handle. Generally, delivery companies create a master plan over several years that will guide the development of their organization with the opening of additional facilities, for example. This plan, which takes into account standard periods and peak seasons, is adjusted each year based on current and forecasted activity.
Carriers are not all affected by the peak season in the same way, as it often depends on the share of B2C parcels they have to handle. Therefore, preparation is not the same, but they all face the need to adapt to a high and short term pace while ensuring maximum quality service to their customers. To meet this challenge, couriers work hand in hand with their customers to assess their needs and get the most accurate and reliable business forecasts possible.
As discussed in our previous article, the structure of a parcel delivery network is specific and, in most cases, is based on territorial sectorization. Often based on postal codes, the latter allows the delivery agency to divide the area it covers into different sections in order to plan its routes. Sectorizing its territory in an optimal way to improve the performance of routes but also the performance of parcel pick-up and sorting in the warehouse, before being loaded into the vehicles.
💡 Kardinal’s Territory Analytics & Optimization (TAO) solution helps you assess your current sectorization and review its performance. Using your historical data, the tool optimizes your area sectorization and resource allocation.
Strategic sectorization solution dedicated to the parcel delivery industry
When the peak period approaches, you can simulate changes with a sectorization tool that will help you measure the impact they may have in terms of resources, costs and performance.
💡 Our TAO solution allows you to manually edit your sectorization to refine the areas and test the impact of local modifications: vehicle fleet changes, activity changes, new regulations, opening of an additional branch…
Indeed, it is essential to be able to offer a large enough and well organized network to efficiently cover the whole area to be delivered.
It is also important to make sure that you have all the necessary resources for the smooth running of the business. With the help of an intelligent tool, you can more easily determine the need for additional resources along with the relevant areas.
2. Prepare your teams and adapt your organization
As the quantities to be handled are much higher than normal, it becomes essential to strengthen your teams. Couriers generally rely on contractors to ensure deliveries, especially on the last mile. Therefore, it is mostly up to them to hire seasonal workers to manage all daily deliveries. This recruitment must be planned in advance. Indeed, the shortage of delivery drivers still affects the entire industry.
It can be wise to create a “call center” dedicated to the peak period to support the customer relations teams who may have to manage significantly more requests. This will improve the customer experience.
The sorting teams should also be strengthened. To cope with the peak season of 2021, La Poste-Colissimo has announced that it has added nearly 6,000 new staff to its teams, while GeoPost/DPDgroup has recruited 12,000 drivers and 5,000 operators for its sorting facilities.
Given this context, it is essential to train teams effectively, especially temporary recruits. Some hub managers have told us that drivers are fully effective in their area after 3 to 6 months. After this time, they know their recurrent customers and their constraints (their preferred delivery times, for example) and have a good understanding of their area and its specificities.
A warehouse’s capacity is quickly limited during the peak period: to overcome this problem, some carriers have developed a two-flow system: several departures are made on the same platform, one after the other. Once the first wave of trucks has left for its routes, another one replaces it. This system doubles the capacity of the facility with minimal disruption to the organization.
3. Automate some tasks
To improve the work of operational teams and their performance, courier companies are increasingly investing in tools to automate repetitive tasks with little added value. Thanks to these tools, the benefits are significant, saving many hours and reducing the risk of error. La Poste – Colissimo has invested in new equipment that can process over 35,000 parcels per hour, compared to 10,000 to 15,000 for the “old generation” sorting machines.
Among the different tools, we should mention conveyor belts on which operators place the parcels arriving at the facility so they can be forwarded to the different delivery drivers. These conveyor belts allow a faster and safer transport of the parcels as well as a decrease in weights carried by operators.
The goods are transported to the delivery drivers who collect the goods related to their area. They can then sort and load them into their vehicles before leaving for their routes. For better efficiency during the route, it is essential to load parcels in a relevant way: the last parcels to be delivered are placed at the back of the vehicle and the first ones to be delivered at the front, easily accessible.
At each step, the operators scan the labels of the parcels for full tracking of the shipment (from the parcel drop-off to the final delivery through the arrival at the delivery facility). Parcel scanning can be performed by using handheld scanners or using a smartphone with an app that can read barcodes. This requires the implementation of a WMS / TMS (Warehouse/Transport Management System) or an ERP (Enterprise Resource Planning) connected to all of these tools and managing all operations.
4. Optimize delivery routes
Last mile delivery is a difficult and yet essential part of logistics, as it involves delivery to the final customer. Costly and unpredictable, last mile transport must be optimized, especially during the peak season. Route optimization is the key solution for carriers to reduce their economic and environmental costs.
Its main purpose is to optimally plan routes: under normal conditions, dispatchers already spend too much time on this complex and time-consuming task, so during peak period… it is impossible for them to plan the delivery of millions of parcels by hand!
💡 Route optimization solutions such as Kardinal’s Always-On Route Optimization (ARO) solution provides a tool for dispatchers to plan their routes and save valuable time that can be spent on more valuable tasks.
However, optimization is not limited to planning: routes must be adapted to real-time hazards. Absent drivers or customers, traffic jams, accidents… difficulties can quickly arise, significantly impacting travel times. Therefore, it is essential to be able to follow in real time how ongoing routes are doing.
💡 Our ARO (Always-On Route Optimization) solution is based on a dynamic algorithm that allows you to adjust your routes in real time to adapt them to field reality. This allows you to respond quickly and accurately to unforeseen events. This continuous optimization, at the heart of our algorithms, allows for an optimization that is both relevant and achievable in the field.
By analyzing your past activity, you can anticipate the next peak season with confidence. In order to manage this intense period efficiently, it is essential to be well prepared. Unforeseen events will inevitably occur, but implementing preventive solutions will allow you to respond proactively. Many new technologies are being developed to assist the different teams affected by these issues. Among them, sectorization solutions allow parcel delivery companies to analyze their activity and make informed decisions to improve their performance during the peak period and throughout the year. This is why Kardinal has developed its TAO (Territory Analytics & Optimization) solution: to provide operators with the insights they need to efficiently manage their business.
