December is one of the busiest months of the year for the majority of businesses, largely due to Black Friday and Cyber Monday. These two days of intense retail activity can often be the most challenging to logistics companies, given the sheer amount of orders they must process and deliver. In 2014, £810m was spent on Black Friday alone in the UK, showing just how significant an event it is.
For those involved with logistics this can pose a number of challenges, and so requires immense organisation. Here are some of the ways Black Friday and Cyber Monday affect logistics companies.
The level of management and planning which goes into logistics is copious even on quiet days, but for Black Friday and Cyber Monday it is monumental. Not only do logistics companies have to arrange more transportation for a myriad of different clients, they also have to have backup plans in case any part of the supply chain suffers from delays/problems.
Since the volume of orders is so high, any bottlenecks or delays in shipping have the potential to affect the entire supply chain and disrupt all the orders caught behind the delay. Often managers in the supply chain may have to arrange for more backup vehicles and create alternative plans should any part of the supply chain fail to cope with the extra strain.
Another way Black Friday and Cyber Monday can affect logistics companies is by increasing the need for a greater number of staff. In warehouses, for instance, it would be impossible to cope with the surge in demand without having more staff, potentially on a seasonal basis.
It is not as simple as merely hiring staff at the right period, however. New staff must be trained to do their jobs safely and efficiently, which takes a great deal of planning and organisation in itself.
No matter how much planning Any given logistics company puts in to the pre-Black Friday period, there is always an element of unpredictability involved. Some of the activity from Clipper’s clients, for instance, was 50% above forecast, which shows just how arbitrary predictions can be for this period.
Much like trading forex, no one ever truly knows how the situation will turn out, so spur of the moment decisions may happen on a frequent basis. This is where the technical expertise of the operations managers comes in particularly useful, as they can quickly identify solutions to often technical problems.
It might go without saying that, despite the challenges presented by Black Friday and Cyber Monday, they are two of the most profitable days for retailers and logistics companies. Since there is such a large demand for their services, they have the opportunity to increase their profits and grow the company come the new year.
There may, however, be increased competition during this period, with multiple logistics companies vying for the most lucrative clients. That being said, it is likely that most logistics companies will at least be close to full capacity during the period.
Black Friday and Cyber Monday certainly present a challenge to logistics companies, but it is a welcome one. Whilst they must ramp up operations and effectively plan ahead, they also have the chance to boost profits and acquire new clients.
By Luke Hatkinson-Kent, freelance writer