Every year, the run-up to Christmas triggers a frenzy of demand in the retail sector, but shopping habits are slowly shifting away from the high street and on to the internet. An annual barrage of pressure is being applied on the parcel delivery companies and couriers of our goods and gifts. With sales for the 2015 festive period estimated to be 17-25% up on last year, parcel delivery companies and logistics networks must be carefully coordinated to maximise efficiency on the road and streamline the fulfilment process.
Central to the successful and profitable realisation of the fulfilment process is a meticulous level of pre-planning. The majority of shippers and carriers have to reserve capacity months in advance to ensure availability, and if they experience unforeseen demand – or worse, an unforeseen lack of demand – the profitability and success of the entire operation comes under serious jeopardy.
It’s not just the cost of renting the heavy goods vehicles or reserving the storage capacity they have to take into account – it’s hiring additional staff, or having to draft in agency professionals at the last minute to fill unexpected gaps. To prevent a shortage or surplus of resource, it’s common practice to create a “Peak Planning Document”. This begins with analysis of each department, last year’s sales figures, this year’s market performance and finally, an accurate prediction of this year’s festive sales figures. A fully integrated plan is then calculated, providing costs for each day of the calendar year in the run-up to Christmas and the January sales period. This allows capacity to be reserved, staff hours to be pre-planned and additional resource to be arranged from an early stage and forms the beginning of a process which has become essential to the prosperity of the retail sector.
A large proportion of high street stores rely heavily on the Christmas period to turn a healthy overall annual profit. So from that perspective, it would be fair to assume that the run-up to the festive period, from September through to January, would be the busiest, and therefore the most profitable, for logistics and parcel delivery companies. But unless a detailed plan with contingency for unforeseen demand is set in stone and implemented to full effect, businesses may run the risk of being left short and unable to complete orders, or experiencing a surplus in resource and losing margin on unprofitable space, labour and transportation costs.