The most profitable time of the year for the transport and distribution sectors

The festive season is here and this means the transport and distribution sectors are experiencing the busiest time of the year. This is peak season as import volumes rise sharply and the demand for consumer goods spike. This is also when some Black Friday orders are still being delivered to consumers around the country, and with Christmas and New Years around the corner, online retail sales are at an all-time high as consumers rush to stock up for the festive season.

The busiest time of year

Massive cargo trucks are travelling to airports and shipping ports to pick up tons of imported cargo. This then gets sorted and delivered to the respective retail and courier companies. Once delivered, these companies store the goods in large warehouses where it gets prepared for delivery around the country. Quality warehouses and big and accessible yard space is also an essential part of the process as goods need to be stored safely, and large trucks need plenty of space to manoeuvre.

Yes, it's the busiest time of the year for the transport and distribution sectors, but this also means it's the most lucrative time, and the successful companies know how to make this season as profitable as possible.

The growth of e-commerce 

The growth of e-commerce in the country is phenomenal thanks to disruptors in the industry such as Takealot, Superbalist, and Zando. We are now a nation that is gradually starting to turn to our laptops, desktops and smartphones to shop for goods. And this is great news for the sector as long-term growth look set to soar.

Courier services aim for near-perfect delivery rates

Right now, courier services are the busiest they have been all year, and their ultimate goal is to achieve near-perfect delivery rates. But even the big companies such as UPS and FedEx see on-time delivery rates dropping during this season from an average of 98% and 99% to 96.3% and 96.6%. To improve these rates, courier companies around the country are investing in more resources and planning better for overall better customer experience. 

This is how they take on the festive season:

Advance planning

The phrase, "failing to plan is planning to fail," is perfectly suited to courier companies, and this is especially true for peak seasons. This is why the top companies plan in advance for this period by implementing projection models to help forecast the loads they will be handling. A great starting point is historical data trends as this creates a baseline to work with. 

Increasing capacity

The industry heavy-weights are well-prepared for the festive season, and as a response to heightened demand, most companies invest in more vehicles and drivers, increase the capacity of sorting facilities, or invest in newer automation processes to fast-track packaging. 

Careful coordination

Careful coordination and planning are key aspects - this ensures efficiency and timely deliveries. The importance of this is magnified when peak times hit, therefore, many companies have improved their holiday distribution strategy to optimise delivery routes. They work very closely with their clients so they know the exact amount of cargo/freight they are picking up or dropping off on a daily basis as opposed to a weekly one. This hands-on coordination makes it easy to monitor schedules and adjust where necessary. It also makes it easier to identify in advance whether they can accommodate certain loads or not.

Managing expectations

Managing expectations is imperative - successful companies communicate well with their clients and inform them in advance on the dates for their holiday shipping deadlines. This is especially important for last-minute Christmas orders. By doing this, companies set clear expectations and their clients avoid disappointment.

As transport and distribution companies are making the most of the season, many others are deciding to enter the sector in 2020. If this is your plan, speak to 3CUBE Property Solutions and we will help you find the ideal industrial property to make the most of this lucrative sector.