Across the field of logistics, experts are warning of above-average demands, tight capacity, record-setting rates, and significant delays. The irony in this year’s peak season is that these concerns and warnings are not new. They come every year, but the 2021 peak shipping season and holiday rush will test all standards for how shippers find capacity, how they manage their supply chains, and the indomitable role brokers play in helping achieve those goals.
What’s Happening Within the Industry in the Run to Peak Season 2021
A few notable expansions have occurred even after the onset of peak season in early 2020, as reported by DigitalCommerce360 and Drewry, including:
- E-commerce sales are already 9.3% greater than in 2020
- Total retail sales have risen 19.6% in 2020
- E-commerce volumes are projected to be 10.7% above all records set throughout the pandemic
- Truckload volume is expected to be up 13% or more
- EIA diesel fuel prices are expected to average $3.29/gallon, the highest level since May 2018
- Standard, home-based delivery makes up 79% of deliveries
- Out-of-home deliveries, involving lockers and in-store pickup, will rise more this year too
- Ocean freight rates are still sitting at record highs, above $10,000 per 40 ft container
- Other GRIs are set to take effect for both FedEx and UPS
- 81% of customers had a bad delivery experience in 2020
Ways Freight Brokers Help Shippers Prepare and Execute Strategies Through Peak Season
Any strategy for success in peak season starts with facts. Freight brokers play both sides of the logistics field, acting as carrier-like service and shipper-like clients. This balance exists to help brokers ensure their carrier partners and shipper partners meet company goals. For carriers, this amounts to finding high-quality loads, avoiding empty miles, and boosting profitability. Yet, they also need to stay mindful of ways to keep costs in check and acceptable for shippers. True, there are instances like today where shippers are happy to get capacity at any rate, evidenced even more strongly by the numerous carriers and retailers looking to charter and build their own ocean fleet and drayage assets to simply make it through peak 2021. Regardless of those opportunities, brokerages still can help enterprises thrive through this and future disruptions by providing these core benefits to shippers:
- Aggregates dense capacity. Dense capacity occurs when there are significantly more carriers with space than available loads. Access to dense capacity also comes from working with more mid-market carriers and those with specialized services to aggregate capacity where it seems invisible to the typical system.
- Uses technology to balance workflows. Using app-based tools, like Edge CAPACITY, creates a faster way to find high-profitability loads and secure ample capacity. Additionally, brokerages’ whole businesses rely on transportation, so their technology is likely to be the latest version and more flexible than your legacy procurement platforms.
- Intermodal, multimodal flexibility. Brokers help shippers leverage the value of intermodal and multimodal transport, reducing costs along the way. By looking at the entire supply chain, brokers can identify opportunities to leverage multimodal and intermodal options to lower landed costs.
- Expertise for unique transport types. Brokers can help shippers manage unique nuances of certain goods, including hazmat, food service, and more. Unique transportation expertise also goes a long way toward reducing other hazards in the industry and drivers of higher rates, including liquids transport, raw materials, and more.
- Lower rates through larger buying power. Since brokers are already moving more goods than an individual shipper, their larger buying power opens the door to lower shipping rates across all modes. Furthermore, brokers may operate on a different RFP schedule than your business and may be able to encourage carriers to accept mini-bids for short-term volume needs.
- Insight into market dynamics. Using world-class tools and forecasting platforms helps brokers understand what carriers should be actually paying and expecting for each movement. For example, Edge Logistics leverages the power of FreightWaves SONAR to track market activity and ensure you are getting the best deal, in every market, regardless of volatility, and using that information to better align carrier assets with your needs.
- Increased sustainability. Empty capacity amounts to wasted space, but by using CAPACITY, it’s easier to leverage a collective supply chain and find capacity to avoid empty backhauls. We’re continuously reducing empty miles by analyzing activities across individual lanes, modes and market variables.
- Complete access to your supply chain. When we have access to a customer's entire supply chain, our pricing team/engineering team can identify waste and increase productivity in supply chains with end-to-end analysis from raw materials to final delivery.
- Helps Focus on Sustainability goals. The online platform Capacity is helping to reduce deadhead miles. Empty capacity amounts to wasted space, but by using Edge Logistics’ CAPACITY, it’s easier to leverage a collective supply chain and find capacity to avoid empty backhauls. We’re continuously reducing empty miles by analyzing activities across individual lanes, modes and market variables.
- Root out inefficiencies & waste.With a focus on not only freight moves, but optimizing the upstream supply chain, the freight broker’s pricing team and engineering teams identify waste and increase productivity in supply chains with end-to-end analysis from raw materials to final delivery.
Stay Ready for Planned Peak and Surprise Disruptions With a World Class Freight Brokerage Partnership
Supply chain disruption and peak volatility are two constants in an industry where uncertainty is rampant. There’s always going to be risks in every market, and eventually, the pendulum swings between carriers and shippers to provide more balance. However, the test of success rests with having a high-quality brokerage partnership that can help your team thrive and find capacity regardless of what the market does in reality. It’s time to rethink your peak season strategy and put a brokerage in your corner. Connect with Edge Logistics to do just that today.