2020 was a topsy-turvy year in the world of freight – and in the world in general – but there are some things importers can always rely on.
For example, peak season.
If you’re a small e-commerce business, getting ahead of peak season in 2021 can make a big impact on your bottom line.
We sat down with some industry experts to get the best info and tips for making the most out of peak season every year while saving money and hassle.
When is Peak Shipping Season for Importers?
Peak season happens every year, and if you’re importing you need to be prepared.
August to October is historically prime shipping time, with back to school and holiday shopping propelling consumer demand every year. But this season can be longer, depending on market conditions.
Another shorter peak season happens in January and February in anticipation of Chinese New Year when most factories and manufacturers in China shut down for a week or more. This means that many importers book shipments ahead of the holiday, causing a capacity crunch.
So, what can importers expect and how can they prepare for peak season?
Top 5 Questions for Peak Season
To get the best answers to help you conquer peak season, we reached out to some of our expert logistics providers. With years of experience and deep knowledge of the most current trends, these Freightos.com partners are sharing their insight to help importers ship smooth this peak season.
We spoke to Niel from ExFreight, a pioneer in digital freight forwarding offering instant, digitized freight quoting, booking and tracking via all modes, air, ocean and ground to over 150 countries globally.
Steve joined us from Aver Logistics. Aver Logistics works with all major carriers, tailoring services and developing lean practices to optimize customer supply chains while saving costs.
We were also fortunate to have Charles and the team at Silver Streak Logistics in the conversation. Silver Streak Logistics specializes in express and economy air freight shipping and offers inclusive door to door services with a personal touch.
All three of these Freightos.com logistics providers have years of experience in managing freight over peak season, delivering great insight to keep your sales on track.
Do freight prices increase for peak season?
Peak season happens when demand for imports outstrips capacity.
With more importers trying to get shipping space leading up to the holiday shopping season or Chinese New Year, carriers charge higher base rates and may introduce premiums to guarantee space.
During peak season, you should also expect to pay a peak season surcharge when calculating the total cost of shipping.
When demand is high and capacity is limited, cargo is often held up or even rolled. This means that if a ship is over capacitated, your goods may not make in on board.
While this isn’t a direct cost, not getting your goods on time is pricey.
How should importers plan for potential delays and hurdles?
One important tip is to ramp up production to accommodate ocean freight transit times instead of airfreight.
Airfreight is faster, but even Express LCL options (which are 3-4 times more expensive than traditional LCL) are still generally 2/3 the cost of airfreight.
Expert tipLeave extra lead time to enjoy cheaper ocean rates AND break up large shipments and diversify carriers and shipping modes to hedge against delays.
Getting in touch early with your logistics provider is essential to prevent delays and respond to unanticipated hurdles. Logistics providers can help guide you through the shipping process and save you money, for example by navigating customs clearance and documentation.
When booking with a carrier, make sure you take the entire transit time into consideration – from the moment the product is picked up from the factory to it being delivered to the customer.
This can be significantly longer than shipping time so pre-booking with that in mind will help avoid delays.
Make sure your supplier is authorized to export by the CIQ (China Inspection & Quarantine Dept) and if you’re shipping medical goods, the factory of origin also needs FDA certification.
Expert tipCancellation fees are steep, so get proof of FDA and CIQ registration before even booking.
Finally, don’t forget that your goods need to clear customs in the country of destination.
The cost of duties and taxes should factor into your decision about the economic feasibility of importing specific goods.
Do you recommend importers ship by air or ocean?
Ocean definitely offers more competitive rates, however express and economy air freight shipping have the benefit of quicker transit time and more frequently updated tracking.
With cancelled sailings and rolled cargo causing delays by ocean during peak season, many importers decide that added cost of air cargo is worth it.
Furthermore, despite still being less expensive than air freight, ocean freight prices have been increasing, especially for express services.
So while this isn’t written in stone, a general rule of thumb is that if rapid transit time is your top priority right now, airfreight might be the best option.
If, on the other hand, you are shipping FCL and have time to book well in advance, ocean freight is likely the most economical option.
One way to cover your bases is to diversify your shipping methods between air and ocean over peak season. This way you can get selling quickly and reliably with air, and replenish inventory while saving cost by ocean.
Amazon Peak Season for FBA Sellers
If you’re an Amazon seller you may have experienced shifting regulations and standards that cause delays or challenges.
One way to hedge against potential issues is to ship products to long term staging or satellite warehouses and only move inventory into FBA as stock is depleting. This is also an advantage in case Amazon requests relabeling or repackaging.
For Amazon Europe sellers, a major challenge is that importers without a physical presence in Europe need trading partners or accountants to act as fiscal representatives, which adds considerable costs.
Another challenge in Europe is that customs agencies are often declaring higher values on goods to protect from customs audits, resulting in high VAT charges and additional duties that can be levied even months after the initial entry.
Expert tipFor Amazon international sellers diversifying fulfillment and finding alternate warehousing options is the best way to navigate changing policies.
What’s the impact on last leg logistics?
One potential source of delays once your goods have reached their destination country is customs clearance. Hiring a qualified customs broker can help you avoid penalties, added charges, hassle, and delays.
Nonetheless, leading into peak season, once export customs are cleared, shipping is typically fairly smooth.
Of course, importers should prepare all documentation and pay any duties and taxes quickly, but if this is done quickly, domestic transit times are fairly fast and reliable.
Another way to keep things moving is to ship to main gateways and use expedited trucking. This is more expensive, but a smart way to get a product where it needs to be quickly.
Expert tipBefore dispatching any shipment check that the receiving consignees have storage capacity.
Another thing to keep in mind is that if you’re sending a full container, the demurrage charges can add up very quickly, and devanning and warehousing goods adds additional costs on top of storage, so make sure delivery carriers are prepared to receive your goods or it could eat into your profits.
To sum up…
Peak season means more demand, less capacity, and higher prices.
Keeping your business on track and running smoothly may seem daunting, so we brought in some experts to help clear up confusion and offer actionable tips for peak season success.
Special shout out to our logistics providers for their time and insight!
You can find Aver Logistics, Silver Streak Logistics, and ExFreight on our marketplace platform, delivering freight shipping solutions for importers everywhere.