For retailers and online brands, peak season is one of the biggest opportunities of the year—and one of the biggest stress tests. For many businesses, demand begins picking up with the back-to-school season in the fall. But the real strain comes between Black Friday and the end of the year, when demand spikes can easily overwhelm an unprepared fulfillment operation.
For help at this critical time of year, many businesses turn to their third-party logistics (3PL) partners to ensure they can scale quickly, deliver on customer promises, and keep costs under control. However, taking full advantage of your 3PL during peak season requires more than handing off inventory and shipments.
Here’s how retailers can collaborate effectively with their 3PLs to make sure both are prepared for the year’s busiest shopping season.
Forecast early and plan together
Demand forecasting is the root of a successful peak season. If retailers don’t share this data with their 3PL, they are limiting the logistics partner’s ability to prepare properly. Instead, retailers should give any sales projections, promotional plans, and historical performance data to the 3PL as far in advance of peak season as possible.
Consider holding a joint planning session in advance of the busy season to walk your 3PL’s operations team through your best-case and worst-case scenarios so they can help you identify any potential bottlenecks that might occur.
For example, a projected surge in large or heavy items might call for some rearranging of the warehouse to make sure there’s enough room. Or expected high volumes of parcel-sized goods might mean they need to source more alternative providers to supplement deliveries in key areas.
Additionally, it’s hard to underestimate the value of a good buffer. If your 3PL is prepared to handle 30% more than what you’re projecting, they’ll be in a good place if sales suddenly skyrocket during peak.
Build flexibility into fulfillment
The reality of peak season is that demand doesn’t usually result in a neat, sloping, and falling curve on a chart at the end of the year. Instead, peak sales will most likely come in surges, such as when a product goes viral, or on Black Friday and Cyber Monday. Building agility into your strategy with your 3PL.
Your 3PL can help build flexibility into your fulfillment operations in a variety of ways, such as:
- Multi-node fulfillment. Spreading inventory across key target regions can lower shipping costs and shorten delivery timelines. Having multiple inventory locations can also help mitigate risk if something goes wrong at one warehouse.
- Carrier diversification. While national parcel carriers will handle the bulk of your peak season shipments, your 3PL can tap into crowdsourced delivery networks, regional parcel carriers, and same-day couriers to keep packages moving and support a variety of shipping options for your customers.
- Supplemental labor. 3PLs often hire seasonal warehouse workers or implement automation to ensure fulfillment operations can scale when volumes spike.
Embracing a higher level of flexibility before peak season allows retailers to maintain (or even improve) service levels no matter what the busiest season of the year may bring.
Make contingency plans for your contingency plans
If the retail sector has learned anything about peak season, it’s that something will always go sideways. Weather events, labor shortages, or unexpected shifts in consumer behavior can catch unprepared sellers off guard, quickly damage customer relationships, and drive fulfillment costs up.
The key to a resilient fulfillment operation is having good contingency plans in place with your 3PL. This could include pre-arranging overflow storage space, onboarding backup carriers in the last mile, or setting parameters to trigger expedited shipping for delayed orders.
Working with your 3PL can help you with:
- Staggering promotions to avoid overwhelming warehouse staff.
- Pre-printing carrier labels to speed up processing during a surge.
- Hedging against disruption by splitting inventory across multiple regions.
- Leveraging your 3PL’s technology for better visibility into potential disruptions.
- Setting up integrations between logistics data and customer-facing portals to minimize damage to the customer experience when an inevitable delay happens.
- Preparing for the post-peak returns rush with appropriate staffing and automation.
Your 3PL is meant to be a problem-solving partner, so it’s important that you work together and pool your data and resources to preserve customer trust and minimize any disruptions that may happen.
Whatever happens this peak season, don’t let any potential insights go to waste. Schedule a post-mortem with your 3PL in January or February to review performance metrics and identify any pain points that should be addressed before next year.
Retailers and 3PLs are strongest when they work together
Peak season doesn’t have to be your make-or-break moment every year. With proper preparation and collaboration with your partner, you can turn Q4 from the most stressful time of the year into a competitive advantage for your brand. Treat your 3PL as a strategic partner, and you’ll be better equipped to handle peak period volumes and position your business for growth next year.
About Phoenix Logistics
Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.
