When you picture your days of preparation for November and December holidays, you can probably imagine crowded locations, long queues at the shops, and a hectic road traffic. During these periods, also called ‘peak seasons’, the shipping world has to deal exactly with the same problems, and more. Every business wants to have the products shipped from point A to point B before holidays, so that you can have your products on the shelves before and during holidays.
Peak season is basically a period of time when the cargo loads exceed the average volumes during other periods. This excess implies that the spaces available for cargos are completely filled and airlines start prioritizing the shipments they will take.
There are two types of airlines that provide shipping services: passenger airlines and cargo airlines. The former divide their aircraft space into passenger’s area and cargo area. The cargo area is also divided into passenger’s cargo and commercial cargo, but they always give priority to the belongings of their passenger’s (suitcases and others); therefore, their space availability can always vary. On the other hand, cargo airlines are fully dedicated to commercial shipments and have more options for cargo management.
Both types of airlines have to prioritize cargos. These decisions are based mainly on the rates paid by the customers, but also on the type of products being handled. For instance, shipping of dangerous products –such as aerosols- has a series of restrictions that determine which other products can be carried in the same aircraft space, and if the dangerous products pay higher rates than the rest – guess whose cargo gets shipped? You know it.
However, the base line of the space issue is the difference between demand and supply. According to the latest statistics from September 2016 from the International Air Transport Association (IATA), the airfreight demand increased 6.1% year – on – year, while the capacity rose 4.7% over the same period. The 1.4% of the uncovered capacity is the issue that airlines are struggling to handle.
During peak season, airlines face a period of power, when their demand is higher than their supply. It is a period of power because the lack of space makes their customers (like you) pay higher rates than those rates offered during non-peak seasons.
Rate increases become a method for airlines to make more profits; however, they have extra costs to pay – i.e.: extra labor shifts for their employees, extra airport terminal fees for the prolonged airplane parking needed to load high volumes of cargo, and so many others.
Sometimes, some premium rates are offered in order to secure early bookings and to avoid days or weeks of waiting for shipment departure. If you pay premium rate, you go first and your transit time becomes shorter since your cargo is also given priority in connecting flights.
Another important factor to consider is the size of the company that ships with the airline, and the volume that it represents to them. Like any other business, airlines care about their customer portfolio and they try their best to give priority to big brands, because providing them with quality services implies more volumes of cargoes from those same companies. In many cases, bigger volumes are considered more important than highly profitable rates. Therefore, some transport providers prefer to assign their capacity to the big companies that pay lower rates than to the small companies that pay higher rates.
What you can do
Paying premium rates during peak seasons will many times be the best solution to avoid lack of space, waiting times and too many flight connections, while being able to satisfy your customers’ needs.
If you are searching for airfreight options it is probably because you are very urged to fulfill an inventory, therefore sea freight is not an option for you due to its long transit times. Nevertheless, although it is a common practice to ship a product order by one transport mode, it is interesting to consider both air and sea modes for your shipment. You would need to identify a percentage of the cargo that would most immediately supply the inventory needs and ship that cargo by air, while the other percentage moves by boat.
In addition, you can consider placing your air bookings with at least two weeks of anticipation. Airlines need a date and cargo details to make the booking, hence you need to be precise about descriptions and the dates when the products are available. If you are the consignee, you can make plans with strict deadlines with your providers so you can secure the booking dates. If you are the shipper, it is easier for you to make your own planning to adjust to advanced air bookings.
It is not to be forgotten that good relationships always help to find solutions. Having a good relationship with your airline, freight forwarder or shipping line helps towards having a good name. If you are able to position your company name and yourself in their minds, they will most likely try to find the solutions for you when you are dealing with space problems. Perhaps, they cannot secure a space for you, but they will do their best to ask for possibilities, or to keep you on the loop in case some space becomes available due to a last minute cancellation.
Keep in mind that this is the time of the year that they are the busiest, so the longest relationship and highest rate come first. Being pleasant, fast to answer questions, not making too many demands go a long way because becoming “annoying” means they will easily forget you to take care of other customers.
Dealing with peak season issues is most of the time about good planning, being creative with inventory possibilities, paying premium rates to secure your shipment and your customer satisfaction, and of course, a good relationship with your logistics provider.
How can we support you?
What have you planned for the upcoming holiday season? If your goods will be ready to be picked up soon from your supplier, the best thing you can do is to start getting shipping quotes and arranging the logistics for your shipment. On Fleet, more than 400 forwarders are ready to quote on your shipment; you can compare their quotes, ask questions, even book and pay the forwarders via Fleet if the service they offer fits your need. Our team at Fleet is excited to have you on board, our priority is to make sure that your shipment would arrive on time and under budget for the holiday.
With Fleet, your shipment will be on its way before you know it. Let's start!