In the classic 1996 film "Jingle All the Way," 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 someone who left shopping for the last minute, but it is unlikely that a logistics professional in the retail sector has the same problem. To ensure stock, it is necessary to start meticulous planning up to twelve months in advance.
Usually, retailers start purchasing Black Friday and Christmas items in September, when transportation volume also increases. Most of the goods are shipped by sea between August and October, and the other, consisting of more urgent or unexpectedly popular products, is shipped by air starting from mid-September.
This year, however, all indications are that the peak maritime freight season is occurring two months earlier than usual. There is already an anticipation of maritime shipments for several reasons: greater storage capacity at the ports, an unexpected and brief drop in freight rates, and the attempt to avoid possible disruptions in transportation due to labor negotiations at the 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 on ships, caused by threats to carriers transiting 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 peak season. One of the main factors is the chronic congestion at the country's main ports, such as Santos and Paranaguá. This congestion can lead to delays in the movement of goods, which may result in an increase in the waiting time for ships. With the high season arriving earlier, these problems worsen, as the increase in shipment volume further intensifies the pressure on port infrastructure. To mitigate these challenges, Brazilian retailers must plan ahead and consider the possibility of redirecting their cargo to less congested ports or even investing in intermodal transportation options. Close collaboration with logistics suppliers who have the ability to adjust routes can be decisive in ensuring that products reach the market at the right time.
The air transport market is also beginning to become overloaded with e-commerce volumes leaving the Asia-Pacific region, which complicates planning for those who are late in replenishing their stocks for the end-of-year festivities.
What can be done to help the retailer who lost this pre-season shipment anticipation? In the past, it would have been more difficult to serve these clients. But since the pandemic, the supply chain industry has adapted to deal with disruptions in trade flows. Logistics providers are likely to 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 transportation – such 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, enabling real-time reactions. The combination of AI and data analysis is revolutionizing ship arrival time calculations, 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 who offer end-to-end logistics solutions and possess advanced technology can enable easier stock replenishment adaptations.
In the last resort, the retailer may have to allocate budget for premium shipping. For the most demanded products and high-value goods, it is necessary to minimize stockout risk by using transportation options that offer greater capacity and faster transit times. Intermodal services, for example, can offer significant reductions in travel time and, in some cases, already have guaranteed reserved space with air and maritime carriers. LCL (less than container load), although more expensive than full containers, often has priority with shipping carriers.
Perhaps the most reassuring news of all is that, although the peak 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 to customers. In this scenario, the key to success will be the ability to adapt quickly and explore new solutions. Whoever manages to maintain a flexible and strategic approach, making the most of technology and available resources, will be better prepared to overcome difficulties and meet demand. By facing these challenges with creativity and resilience, they will not only meet customer expectations but also strengthen their position in the market for the future.
