Small Parcel Market Outlook Available. Get Ready for Capacity Restraints & Higher Costs.

September 21, 2021


As the all-important fourth quarter draws closer, the small parcel market is still chaotic. We continue to see peak season surcharges announced by carriers and parcel management providers, while any remaining last-mile capacity is being snapped up as quickly as it becomes available. And this is all while shippers are struggling to ensure enough inventory is available for the holiday peak season.

Small Parcel Market: Value Over Volume

Lessons learned this time last year will surely help in certain areas, but we still see severe strains on the supply chain after 18 months of the pandemic. Congestion at the ports and blockages across the internal networks are exacerbated by the chronic truck driver shortage nationwide.  Additionally, the shift in strategy by the major carriers of value over volume, resulting in turning away business that doesn't provide enough margin, is leaving shippers scrambling to get products in the hands of their customers.

FedEx described last year as a “Shipathon” and across social media it was described more of a “Shipaggedon.” This year promises to be more of the same for the parcel market particularly as more people get vaccinated, businesses fully reopen, and parts of the economy return to pre-pandemic levels. The ever present problem of surcharges is taking a backseat to capacity restraints in many cases.

Be Prepared for a Long Peak Season

To avoid last year’s mishaps, shippers will need to be agile within their operations to keep goods flowing throughout their supply chains. Proactive strategies such as shipping freight as early as possible, building flexibility into delivery dates and, most importantly, exploring alternate shipping solutions will make a big difference. In many cases, retailers have already stockpiled inventory to avoid the delays, which is resulting in "peak season" starting well in advance of the actual holiday season.

“Peak-season surcharges never end,” John Haber told SupplyChainBrain. “That’s been going on since COVID hit. The line between what’s ‘peak’ and what isn’t is blurring.”

One thing is certain, this year's peak season will be more expensive and much more uncertain than previous years which is putting pressure on shippers and consumers alike.

Download our Q4 Parcel Market Outlook here and be prepared.


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts has united with Transportation Insight to become North America’s #1 provider of small parcel management and optimization services.  Our team of best-in-class analysts employs cost modeling techniques to help clients optimize their supply chain spend, reducing costs by 20% or more.  Our approach is non-invasive to daily supply chain operations as we employ unparalleled market intelligence and proprietary cost modeling technology, targeting hidden costs and identifying savings opportunities. After establishing the success criteria, SME leverages proven project plans, data warehousing, and milestone documents to ensure an optimized and implementable solution. We build strong business cases based on your data to negotiate better terms, pricing, and service for our clients. We deliver your competitive edge.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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Small Parcel Market Outlook Available. Get Ready for Capacity Restraints & Higher Costs.

September 21, 2021


As the all-important fourth quarter draws closer, the small parcel market is still chaotic. We continue to see peak season surcharges announced by carriers and parcel management providers, while any remaining last-mile capacity is being snapped up as quickly as it becomes available. And this is all while shippers are struggling to ensure enough inventory is available for the holiday peak season.

Small Parcel Market: Value Over Volume

Lessons learned this time last year will surely help in certain areas, but we still see severe strains on the supply chain after 18 months of the pandemic. Congestion at the ports and blockages across the internal networks are exacerbated by the chronic truck driver shortage nationwide.  Additionally, the shift in strategy by the major carriers of value over volume, resulting in turning away business that doesn't provide enough margin, is leaving shippers scrambling to get products in the hands of their customers. FedEx described last year as a “Shipathon” and across social media it was described more of a “Shipaggedon.” This year promises to be more of the same for the parcel market particularly as more people get vaccinated, businesses fully reopen, and parts of the economy return to pre-pandemic levels. The ever present problem of surcharges is taking a backseat to capacity restraints in many cases.

Be Prepared for a Long Peak Season

To avoid last year’s mishaps, shippers will need to be agile within their operations to keep goods flowing throughout their supply chains. Proactive strategies such as shipping freight as early as possible, building flexibility into delivery dates and, most importantly, exploring alternate shipping solutions will make a big difference. In many cases, retailers have already stockpiled inventory to avoid the delays, which is resulting in "peak season" starting well in advance of the actual holiday season.
“Peak-season surcharges never end,” John Haber told SupplyChainBrain. “That’s been going on since COVID hit. The line between what’s ‘peak’ and what isn’t is blurring.”
One thing is certain, this year's peak season will be more expensive and much more uncertain than previous years which is putting pressure on shippers and consumers alike. Download our Q4 Parcel Market Outlook here and be prepared.
ABOUT SPEND MANAGEMENT EXPERTS Spend Management Experts has united with Transportation Insight to become North America’s #1 provider of small parcel management and optimization services.  Our team of best-in-class analysts employs cost modeling techniques to help clients optimize their supply chain spend, reducing costs by 20% or more.  Our approach is non-invasive to daily supply chain operations as we employ unparalleled market intelligence and proprietary cost modeling technology, targeting hidden costs and identifying savings opportunities. After establishing the success criteria, SME leverages proven project plans, data warehousing, and milestone documents to ensure an optimized and implementable solution. We build strong business cases based on your data to negotiate better terms, pricing, and service for our clients. We deliver your competitive edge. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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