3 Holiday Season Metrics to Improve Shipper/Carrier Relationships

Tracking the right metrics today can mean a world of difference as you begin conversations with carriers for next year.

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Old Dominion Freight Line

According to Deloitte’s annual holiday retail forecast, holiday sales are expected to increase between 7-9% this year, and the e-commerce portion of that is rising even quicker, with online sales expected to increase by 11-15%. However, that doesn’t mean that retailers are stocking less inventory in the brick-and-mortar locations; they’re simply becoming smarter about what goods they keep on hand to meet demand. And, as more consumers select options such as “buy online, pick up in store,” they’re still expecting the item to be available as soon as they can drive to the store.

It’s not too late – and never too early – to start thinking about how to improve next year, especially as supply chain woes stretch into 2022. Tracking the right metrics today can mean a world of difference as you begin conversations with carriers for next year. Here are a few important numbers to keep an eye on throughout the season: 

On-time, in-full (OTIF) accuracy

Before the pandemic, many retailers were already transitioning to an OTIF model – shippers needed to deliver goods during a very specific window, not early or late, or face a stiff penalty. This required shippers to work very closely with the carriers to ensure goods moved through the supply chain like clockwork. Now, with pandemic-related supply chain disruption impacting every facet of delivery, meeting OTIF requirements is more important, and more difficult, than ever. Make sure to have a conversation with your carrier to ensure they can meet your changing needs, especially if you anticipate you’ll need more capacity next holiday season.

Carrier communication

OTIF data is critical to your operations, but it’s also important to consider how often you’re receiving data. You shouldn’t have to spend time continually calling your carrier for updates. Carriers are leaning on technological innovations more than ever before to ensure they are offering customers real-time tracking and visibility. And, receiving shipment updates in real time can make a significant financial impact on your business at the end of the year.  

Keep track of how frequently your carrier transmits status through your transport management system (TMS) or electronic data interchange (EDI), and if it’s not to your liking, discuss with your carrier how to increase reporting. Communication is essential as you look for workarounds during delays to avoid missing a delivery window, and having that updated data at your fingertips enables you to make more informed decisions in a pinch.

Sales by region

The way brick-and-mortar retailers are structuring their stores has changed as consumers shift to e-commerce. Recent research from Edge by Ascential found retailers may dedicate as much as one-third of their floor space to fulfillment operations by 2023. Stores will look to keep their most popular products in stock to ensure quick availability/last mile delivery, and shippers will need to understand which products sell better where in order to meet demand. That may mean pulling back on storage space for less popular items and increasing space for more popular items, likely necessitating a change in shipping strategy.

As you keep track of sales data for specific regions, loop your carriers into the conversation. They can help you understand capacity levels in each area, and how you can restructure your shipping strategy to ensure top selling products are moving quickly and efficiently. As the holiday season creeps earlier and earlier each year, it will be important to make sure these goods arrive at the store to meet early Q4 demand, so start planning for the spike now.

Planning is never finished

There’s always something new you can learn about how to fine tune operations. Especially in this supply chain crunch, maintaining a strong relationship with carriers is an important aspect of continued growth. Keep track of holiday sales and delivery data and use that as a foundation for ongoing conversations around shipping strategy – it’s a great way to set yourself up for success in the New Year.