The holiday season is here, a time for joy, gift-giving, and, for businesses, the inevitable race to meet skyrocketing demand. While shoppers enjoy festive deals, companies face increasing supply chain challenges.
According to Procurement Magazine, retail supply chain leaders in the US and UK anticipate potential revenue losses of up to 30% this holiday season due to ongoing supply chain disruptions and a decline in consumer spending.
With tighter shipping timelines, unexpected hiccups like weather delays or labor shortages, and the need to juggle stock across channels, the pressure is real.
These supply chain challenges are not only about keeping shelves stocked but also about maintaining customer satisfaction during the most critical sales period of the year. But don’t worry, it’s not all doom and gloom.
In this blog, we’re not just highlighting the top supply chain challenges of the 2024 holiday season; we’re also sharing quick solutions to help businesses deal with these hurdles easily.
Why Are Supply Chain Challenges Tougher During the Holidays?
The holiday season puts immense pressure on supply chains as demand skyrockets while timelines tighten.
Retailers rush to stock shelves, e-commerce orders flood in, and shipping networks get stretched to their limits.
Add in unpredictable consumer trends, labor shortages, and weather disruptions, and it’s easy to see why businesses struggle to keep up.
Simply put, it’s a high-stakes race to meet customer expectations without dropping the ball.
What Supply Chain Challenges Will Arise this Holiday Season?
While the holiday season brings a common set of supply chain challenges for companies each year, the way that those challenges present themselves, the reasons behind the challenges, and potential solutions vary.
Differentiating factors include things like market conditions, geopolitical and weather-related issues, regulatory issues, and new solutions becoming available to the market.
Logistics challenges companies will face this year are likely to be an intensified continuation of the supply chain issues that have plagued companies across all sectors throughout 2024.
1. Shipping Delays
While the Pandemic-induced capacity crunch has eased, freight is still bottlenecking at several points in the supply chain.
- Port Congestion: Even if goods reach the right port on time, congestion may delay their availability.
- Longer Wait Times: Ports worldwide are experiencing increased delays, adding to the already lengthy ocean freight journey.
- Canceled Sailings: Ocean carriers are canceling sailings to balance supply and demand, making ocean freight less reliable.
- Seasonal Capacity Crunch: The holiday shopping surge creates its own bottlenecks, slowing freight movement and complicating transportation arrangements.
These persistent issues highlight the ongoing impact of global supply chain challenges during peak seasons.
The Solution: Go for Faster Shipping Methods
Consider faster shipping methods like air freight services to overcome delays.
Newl’s air freight services drastically reduces transit times, transforming month-long journeys into just days.
Partnering with a 3PL ensures seamless transport to and from airports, simplifying logistics and helping businesses stay ahead in the face of global supply chain challenges.
2. Rising Costs from Air Freight Dependencies
Global supply chain issues today, including port congestion, are pushing companies to rely on air freight for timely holiday deliveries.
However, many freight brokers are not IATA-certified, requiring them to pass shipments to IATA certified forwarders.
This leads to double markups, brokers’ margins plus forwarders’ fees, further driving up costs.
Coupled with air freight’s inherent expense, this reliance strains budgets during an already costly season.
The Solution: Minimize Mark-Ups by Cutting Out Middlemen
To tackle rising air freight expenses, partnering with an IATA-certified provider like Newl can make all the difference.
As a certified agent, Newl eliminates secondary markups by handling air shipments directly, saving you from unnecessary broker and forwarder fees.
Additionally, planning shipments early and combining air freight with expedited ground transport can further optimize costs.
With Newl’s expertise and certification, businesses can navigate global supply chain issues today with confidence, ensuring efficient and cost-effective holiday deliveries.
3. Warehouse Space and Labor Shortages
Labor and warehouse space shortages across the logistics industry will make getting freight a little more complicated than usual this year.
All that extra holiday freight needs to be received, stored, picked, packed, sorted, and shipped, but finding the bodies to accomplish all that for the extra freight may be difficult.
While there are some worries that the looming recession will reduce the need for seasonal retail labor, it’s likely that warehouses will still run into understaffing issues since they were so understaffed to begin with.
Not to mention, many warehouses are bursting at the seams after overstocking as insulation against Pandemic-related import issues. Finding space for all the holiday stock will likely be difficult for some companies.
The Solution: Partner With 3PLs
Luckily, there are 3PLs and full-service warehouses that companies can pass the overflow off to.
Full-service warehouses can not only store freight but also carry it through the entire warehousing process, from receiving to shipping.
Outsourcing warehousing solves both the storage space issues and the staffing issues that many companies are encountering this holiday season.
4. Extreme Weather Events
Extreme weather events are increasingly impacting the supply chain industry, causing delays, damaged goods, and logistical bottlenecks.
From heavy snowfall grounding trucks to hurricanes closing ports, unpredictable weather adds another layer of complexity during the critical holiday season.
These disruptions force companies to scramble for alternative routes or faster shipping methods, which can lead to skyrocketing costs and strained resources.
For businesses, navigating these supply chain industry challenges requires agility and preparation.
The Solution: Remain Proactive
To stay ahead of extreme weather disruptions, businesses can adopt proactive strategies.
Partnering with a reliable logistics provider, like Newl, ensures access to flexible routing and contingency plans during weather-related challenges.
Using tracking systems and weather data can help anticipate issues and reroute shipments effectively.
Diversifying transportation modes, such as using rail or air when roads are blocked—also reduces risks.
By addressing supply chain industry challenges head-on, companies can keep operations smooth, even when the weather isn’t.
5. Unpredictable Consumer Demand
Fluctuating consumer behavior and insufficient historical data continue to present challenges in supply chain demand forecasting.
Post-pandemic economic shifts, combined with rapid trend cycles driven by social media platforms like TikTok and Instagram, make it harder for retailers to predict future demand accurately.
Surplus inventory from earlier delivery delays has further complicated matters, leading to price reductions across wholesale and retail sectors.
As a result, retailers often find themselves relying more on intuition than actionable, data-driven insights.
The Solution: Utilize Forecasting Strategies
To address these challenges in supply chain demand forecasting, businesses must move beyond traditional methods and embrace advanced forecasting strategies.
Start by using diverse data sources, such as market trends, consumer behavior insights, and historical sales data across all channels.
Use this data to create more accurate forecast models, ensuring they’re continuously refined with real-time updates.
Collaboration with suppliers is also critical to better align sales velocity with lead times.
By implementing robust tracking tools and fostering clear communication, businesses can reduce guesswork and focus on strategies that truly matter.
Overcome Holiday Supply Chain Challenges with Newl
While these solutions provide a strong starting point, they’re not the only ways to tackle holiday supply chain hurdles.
If your business needs expert support to navigate this season’s complexities, Newl is here to help.
At Newl, we offer comprehensive logistics and warehousing services tailored to meet the unique demands of businesses during the holiday season.
With our extensive global partnerships and expertise, we provide customized solutions to ensure smooth operations no matter where you’re located.
Here’s how Newl can support your business:
1. End-to-End Logistics Solutions
From ground, air, and ocean freight to customs clearance, our services cover the entire supply chain, ensuring reliable and timely deliveries.
2. Advanced Warehousing Support
Our state-of-the-art facilities and inventory management systems streamline storage, picking, and packing, helping you meet demand efficiently.
Let Newl be your trusted partner to overcome this year’s holiday challenges with ease. Reach to us today for more information.
Final Thoughts
The holiday season always comes with its fair share of supply chain hurdles, but it’s not all doom and gloom.
With a bit of planning, flexibility, and the right partners like Newl, you can deal with these challenges head-on.
It’s all about staying ahead of the curve, keeping your customers happy, and making the most of this busy season.
At the end of the day, overcoming these hurdles isn’t just about avoiding issues, it’s about creating a smooth experience that leaves your customers coming back for more.
You’ve got this!
Frequently Asked Questions
1. What is the bullwhip effect in supply chain?
The bullwhip effect is a supply chain phenomenon where small changes in consumer demand at the retail level cause much larger ripple effects throughout the supply chain.
These fluctuations grow bigger as they move from retailers to wholesalers, distributors, manufacturers, and eventually to raw material suppliers.
The name comes from the way a whip’s motion magnifies as it travels down its length, creating a sharp crack.
2. What is CPFR in supply chain?
Collaborative Planning, Forecasting, and Replenishment (CPFR) involves a set of coordinated practices where business partners work together to plan key supply chain activities.
This collaboration ensures customer demand is met efficiently while minimizing costs.
3. What is MVP in supply chain?
A minimum viable product (MVP) is an initial version of a product or feature designed to test and validate customer needs and preferences.
It is created with only the essential features required to provide value, allowing businesses to gather feedback and refine the product while saving time and resources.