In the classic film from 1996, "A Toy Hero", Arnold Schwarzenegger plays a desperate father trying to find, on Christmas Eve, a toy that is sold out. It is possible to identify with the regret of those who left shopping until the last minute, but it is unlikely that a logistics professional in the retail sector will have the same problem. To ensure the stock, it is necessary to start a meticulous planning up to twelve months in advance
Normally, retailers start buying Black Friday and Christmas items in September, when the transport flow also increases. Most of the goods are shipped by sea between August and October, and the other, of the most urgent or unexpectedly popular products, is shipped by air mode starting in mid-September
This year, however, everything indicates that the peak season for maritime freight is occurring two months earlier than usual. There is already an anticipation of maritime shipments for various reasons: greater storage capacity at the ends, an unexpected and brief drop in freight rates and the attempt to avoid possible interruptions in transportation due to labor negotiations at East Coast ports and the risk of increased Chinese tariffs after the November elections. Another factor that contributes to this is the ongoing capacity issues in ships, caused by threats to carriers transiting through the Red Sea and congestion at ports in Asia
In addition to these global challenges, Brazil also faces specific issues that affect logistics, especially during the high season. One of the main factors is the chronic congestion at the country's major ports, like Santos and Paranaguá. This congestion can lead to delays in the movement of goods, what can cause an increase in the waiting time of ships. With the high season arriving earlier, these problems worsen, because the increase in the volume of shipments further raises the pressure on port infrastructure. To mitigate these challenges, it is crucial that Brazilian retailers plan ahead and consider the possibility of redirecting their shipments to less congested ports or even investing in intermodal transport options. Close collaboration with logistics suppliers that have the ability to adjust routes can be crucial to ensure that products reach the market at the right time
The air transport market is also starting to become overloaded with e-commerce volumes coming out of the Asia-Pacific region, what complicates the planning of those who are behind in replenishing their stocks for the year-end holidays
What to do to help the retailer who missed the advance shipping movement of the high season? In the past, it would be more difficult to serve these clients. But, since the pandemic, the supply chain industry has adapted to deal with disruptions in trade flows. It is likely that logistics providers will implement contingency plans and resort to creative solutions to bring goods to the location where they will be purchased. Examples of this include redirecting cargo through different ports and mixing modes of transport – as maritime and air – to avoid high-risk areas or bottlenecks
Another advantage is that technology has advanced and more logistics providers can offer visibility into the flow of cargo and events, allowing real-time reactions. The combination of AI and data analysis is revolutionizing the calculation of ships' arrival times, considering a broader range of variables, from weather conditions to vehicle performance, to provide more accurate forecasts that support planning. This particularly benefits those retailers who provide their own data to their suppliers. Working with partners that offer a comprehensive logistics solution and have advanced technology can enable adaptations to replenish stocks more easily
As a last resort, perhaps the retailer needs to allocate budget for premium shipping. For the most demanded products and high-value goods, it is necessary to minimize the risk of stockouts by using transportation options that offer more capacity and faster transit times. Intermodal services, for example, can offer significant reductions in the route and, in some cases, already have guaranteed space reserved with air and sea carriers. The LCL (less than container load), although more expensive than full containers, frequently have priority with shipping carriers
Perhaps the most reassuring news of all is that, although the high season arrived earlier in 2024, the supply chain is better positioned than ever to handle the unexpected. There is still an opportunity to act and ensure that products are available for customers. In this scenario, the key to success will be the ability to adapt quickly and explore new solutions. Whoever can maintain a flexible and strategic approach, making the most of the technology and resources available, will be better prepared to overcome difficulties and meet demand. When facing these challenges with creativity and resilience, they will not only meet the customers' expectations, but will also strengthen their position in the market for the future
