Shipping Pitfalls: Surviving the Holidays as an eCommerce Seller

As the holidays creep closer, shoppers are gearing up to spend hard earned paychecks on their favorite aunts, grandparents, and more importantly… marketplaces.  If you were a seller during last year’s holiday season, you probably remember the trauma of last-minute capacity tightening, peak season surcharges and general rate increases, trucking timelines, customs exams, and the all-important final delivery to Amazon or fulfillment warehouse of your choice.  To guide importers and exporters through these common pitfalls, we’ve compiled tips and tricks to help sellers survive the rigors of holiday shipping.

Peak Season

Generally, the time surrounding the holidays, commonly known as peak season, begins in early August and runs through the end of January.  If you haven’t pulled the 2016 holiday calendar to plan accordingly, we encourage you to print the following table:

Date Holiday
October 31 (Monday) Halloween
November 24 (Thursday) Thanksgiving
November 25 (Friday) Black Friday
November 28 (Monday) Cyber Monday
December 25 (Sunday) Christmas, Hanukkah
December 31 (Saturday) New Year’s Eve
January 28 (Saturday) Chinese New Year

 

Shippers targeting Halloween and the top digital shopping days should have their cargo on the water by September at the latest to allow for sailing time, domestic drayage, and fulfillment warehouse delivery appointment slots.  For later religious holidays, sellers should aim for early October bookings at the latest.  The final shipping rush occurs during the Chinese New Year, which falls on January 28th in 2017.  China, the hub of eCommerce manufacturing, goes on a 1-2 week national holiday hiatus with limited to no freight moving in or out of major shipping routes.  Capacity (and therefore pricing) gets particularly tough before and after this bottleneck every year, so take care to fulfill orders in advance and communicate expectations with your supplier.

Shap Blog: A Straightforward Explanation of How the Chinese New Year Affects your Logistics, No Matter What your Zodiac Sign Is

Last year, Amazon’s Christmas delivery cut-off was on December 4, however with significant and often unannounced changes to their warehousing requirements and fees, we suggest allowing plenty of buffer time for direct-to-Amazon deliveries.  We will be posting Amazon’s deadline schedule in mid-August.

Check back to see Amazon’s shipping deadlines when announced!

The Supply and Demand of Space

Peak season is the one time during the year that carriers can try to force market conditions in their favor and make up for the losses they’ve fallen into during lower demands.  Knowing that most international sellers, including behemoths like Walmart and Target, are all trying to get products to market, carriers routinely pull vessels out of circulation to restrict capacity in high volume routes.  The economics is quite easy from there; high demand + restricted supply of capacity = rate increases.

In addition, steamship carriers try to implement general rate increases (GRI) and peak season surcharges (PSS) usually twice a month during this period.  These charges vary and are usually mitigated depending on market demand, but can range anywhere from $200-400 per TEU and $8-14 per CBM.  It’s important for sellers to build in a buffer for these increases in shipping costs.  Freight carriers are also known to roll cheaper bookings in favor of larger, premium paying customers.  For example, if you are paying $1,300 USD to ship your container, but another seller has agreed to pay $1,450, the carrier has the right to hold your shipment and put it on the next available sailing while giving the space to the competition.  When getting a quote from your freight forwarder, be sure to indicate if a premium service is required.  To avoid the risk, we suggest shipping early, and if your freight gets rolled, consider it free warehousing that you don’t have to pay Amazon for!

Let the space wars begin!

The Costs of Exams

Once your goods arrive, importers should always consider both the time and cost that a Customs (or other government agency) exam can inflict on your shipments.  Depending on the type of examination, clearing a shipment through the necessary regulatory agencies such as CBP can be immediate, take a few days, or even turn into a few weeks.  If you are a first time importer, or have experienced consistent examinations in the past, take care to pad your timeline accordingly.

Less than full container load (LCL) shipments can often experience a higher rate of examination because of the diversity of freight packed into the container.  When combining freight with unknown shippers and commodities, it’s a game of chance whether any of the bundled freight is subject to a targeting enforcement.

To answer the most natural next question, Customs does not disclose the examination targeting criteria to the trade community due to national security risk.  What we do know is that elements such as shipper, importer, tariff number, and country of origin or export are all taken under analytical consideration.  Under 19 USC 1467, Customs has the right to examine any shipments imported into the United States, and you, the importer, are required to bear the cost of those cargo exams.

For more information about Customs exams and their costs, check out Shapiro’s Examining the Issue: A Behind the Scenes Look at Customs Inspections and Examining the Issue (Part Deux): Customs Inspection Questions Answered blogs.

Mad Dash to Fulfillment

Finally, you want to consider domestic drayage and the delivery appointment to your fulfillment warehouse of choice.  Most often, a less than truckload (LTL) carrier is used, especially for full container shipments delivering to multiple warehouses.

Because of Amazon’s strict warehousing policies, truckers have to schedule and meet very tight delivery appointments and the noose only gets tighter during peak season.  During the holiday rush, Amazon can delay appointments up to 2 weeks with everyone at their mercy.  While Amazon does allow for evening deliveries, drayage carriers charge up to $500 extra for deliveries outside of normal business hours.  This is the most frequent cause of angst for sellers that we see.  Failure to consider this timeline in your planning could result in missed holiday cut offs to get your goods into the market in time for holiday sales.

We hope this helps prepare you for the holiday shipping rush ahead and to consider all the elements that can affect your shipping deadlines.  If you have any questions, or would like to learn more about our eCommerce shipping services, please contact us at ecomm@shapiro.com.

-- Jillian Vaccaro
Senior eCommerce Account Specialist