Paul Tyson, commercial director, ArrowXL
As we reach the final straight of 2017, retailers have already decked their own halls with boughs of holly and other festive goodies in anticipation of Black Friday and Christmas. In response, home delivery operators and suppliers of warehouse and storage solutions continue to work meticulously alongside their retail clients to finalise forecasts and collection schedules ahead of the upcoming peak season.
The phenomenal growth of Black Friday over recent years has forced carriers to regularly analyse the overall strength of their networks, resulting in continuous investment programmes designed to boost overall capacity. However, whilst those carriers exclusively handling smaller goods can focus on reinforcing their networks throughout the year in preparation for the end of year peak, two-person carriers specialising in items such as white goods and furniture have to navigate through a far more complicated calendar that features several spikes in activity. As a result, they must deploy a more agile logistics model, allowing them to regularly scale up and down to meet demand and maximise profitability.
With shoppers splashing out on new outside furniture in preparation for the summer months, Easter represents the first peak of the year for ArrowXL. However, this particular peak can be largely affected by the weather forecast over the bumper weekend, as well as when Easter falls, as consumers are more likely to spend time outside in April rather than March. In addition, a later Easter may collide with the May Day celebrations, which is another peak for our business.
It is critical that we take into account these factors when communicating with our clients and preparing our network, as no two years are ever likely to be the same. Typically we make approximately 8,000 in-home deliveries per day (many including assembly and installation) during this peak, which often runs through until the end of June.
Late summer and autumn is very much the calm before the storm and can be a difficult time for two-person carriers. Following the end of the summer holidays and the weather taking a turn for the worse, volumes are typically lower than normal, and companies must scale back operations to avoid making losses. However, at the same time, they must retain that ability to quickly ramp up operations ahead of Black Friday, which can be challenging due to the fact that everybody across the industry is looking for additional resources simultaneously.
In recent years we have also noticed a shift in activity from Christmas to Black Friday, albeit a slightly different one. Traditionally our “end of year peak” would fall in January, as consumers deliberately hold off from making large purchases in December in order to secure a discounted price in the post Christmas sales. However, retailers have now altered their tactics to take advantage of the Black Friday buzz by cutting their prices earlier. The knock-on effect is that we must ensure we have sophisticated plans and additional resources in place from mid-November onwards, so we can efficiently carry out 9,000 to 10,000 deliveries each day, as well as providing additional in-home solutions where required.
From the end of the summer onwards, our client teams will work closely alongside our clients in order to best understand their requirements for the peak season. Then, during Black Friday and the days that follow, this line of communication will be strengthened. Forecasting calls will take place several times a day, where the teams agree the number of trailers required for the anticipated volumes. Due to constant investment in our fleet and our infrastructure we can also typically provide around 10% flexibility in these volumes, which provides added peace of mind for our clients at a busy time of year.
Once the final Black Friday volumes have been fulfilled, we tend to see activity slowly fall in the lead-up to Christmas, as our clients begin to plan for the January sales. This provides ample opportunity for us to analyse our performance over the Black Friday period and prepare ourselves in the best possible way for the final peak of the year, which is triggered by the January sales.
This year, we have invested heavily in both warehouse capacity and our fleet of vehicles in order to further strengthen our service proposition. This includes a £1.7 million investment to double existing capacity at our warehouse in Wigan. The hub incorporates improved flooring, modern lighting installations and sprinkler systems for fire prevention. We have supplemented this by spending in excess of £1 million to upgrade the materials handling equipment across our network. In total, 53 pieces of specialist machinery have been ordered to further enhance productivity across our hubs, including specialist high reach trucks that can operate at a height of 13.8 metres.
Whilst the industry focuses intently on what promises to be the busiest Black Friday and Christmas to date, it is easy to forget that one-person and two-person carriers have a very different set of requirements. However, the necessity to continuously invest in their fleets and capacity will remain a common objective over the years to come.