Commentary
The pandemic has changed Black Friday forever. Surcharges announced in August by the largest shippers are the penalty for not selling out early. The pandemic has caused shippers to fully reassess their supply chain strategy and their carrier mix.
One way that delivery services hope to deal with the holiday crush is to push retailers to ship more packages early in the season, and charge more the closer it gets to Christmas.
UPS, FedEx and USPS have all had surge pricing premiums during the holidays. Surcharges could increase to as much as $5 per shipment this year, forcing some retailers to pass along the cost to consumers.
Preparation is key – Make inventory management adjustments NOW!
Historically, veterinary clinics and retailers reduce their inventories in December in preparation for taxes and asset/liability ratios for lenders. I urge practices to move their reorder points on “A” and “B” items to quantities equal to four or more weeks on hand. Restock when inventory quantities on hand depletes to three or four weeks on hand. Lead times to receive a restocking order will likely expand to four or more days from the time an order is placed. It is better to be overstocked by a week or two than to be out of a key product you use or sell every day.
Sources that discuss the shipping challenges are listed below:
- UPS announces unprecedented surcharge changes, Intelligent Audit, August 7, 2020. Link.
- Want something delivered by Christmas? Order way in advance, CNN Business, October 27, 2020. Link.
- Why are Black Friday deals starting so early? Fast Company, November 1, 2020. Link.
INSIGHTS: Think back to March and April when orders backed up in fulfillment centers and carriers couldn’t deliver the packages. That situation has not changed radically this fall and despite their best efforts, UPS, FEDEx and USPS will “get ‘er done” at premium prices for slower service.
Remember, primary restocking orders on Tuesday or Wednesday with fill-ins on Friday and Monday” – Kirk Augustine