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If you’ve seen higher than expected freight rates, we hear you, we see you. There’s a couple of potential factors for these increases. Since Q2 of 2020, the freight markets have shown robust growth, which has raised rates dramatically. While this is good news for carriers and manufacturers, it has caused CPG shippers to pay the price in rising freight rates. In this week’s blog, our team analyzes the various factors that are driving up freight rates and why they are happening.

Factor 1 | Port Congestion 


With pandemic-related consumer shopping habits, many West Coast ports operated at maximum capacity during the summer. In 2021, the uptick in imports has compounded the situation and caused even more congestion. March retail sales increased by 9.8% sequentially and 14.3% year-over-year. A 27.7% jump led to an increase in sales of food services. With more imports on board, shippers should brace for capacity constraints. As the produce season gets underway, rates will also rise.

Factor 2 | Produce Season


The start of the produce season typically occurs in February in the southern US. By spring/summertime, it has reached the majority of the US. During this time, capacity is tightened as refrigerated carriers dedicate a lot of their space to hauling produce. Other products that can ship via dry van or on refrigerated trucks will move to van transport, thus increasing freight rates across the board.

Factor 3 | Reliance on Split Shipments 


eCommerce brands have been comprehensively using split shipments for years. Firstly goods need to be picked from inventories across different locations. With not enough room on a single truck or plane for an entire shipment, it may have to be divided into individual boxes and delivered individually. Split shipments happen to occur even more often during cross-country or international shipment of goods. The more the shipments, the costlier the shipping costs; therefore, the trend ends up being a pricey affair and often harmful to the shipping ecosystem.

Counter Rising Rates with these Techniques: 

Advance Planning


One of the most effective ways to combat these high freight rates is planning shipments far in advance. Cargo cost is increasing every day. To avoid paying surged charges and avail early bird facilities, companies have to plan their shipments well in advance strategically. Working with a team of transportation experts (Like Taylor) that uses digital platforms to leverage data on the freight costs to predict rates and trends affecting the rates will help to plan and lower costs. 

Work With A Team Of Experts

Work with a dedicated logistics team to ensure conditions do not endanger profitability. Teaming up with a partner like Taylor can help your organization correctly forecast costs and find more favorable pricing through consolidation or mode optimization services.

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B2B Fulfillment, B2C Fulfillment, eCommerce Fulfillment, Fulfillment, Inventory Management, Supply Chain, Supply Chain Management, Third Party Logistics, Warehousing
Inventory Management

As businesses and operations scale, they need to examine the accuracy of their inventory management and forecasting processes. Demand forecasting goes beyond simple estimates of product demand, looking into intricate patterns overtime to produce more accurate and timely predictions. Through better demand, an organization will be able to manage inventory better, increase revenue, and improve customer support. As businesses and processes scale, they need to investigate the accuracy of their inventory management and forecasting processes. 

What is Inventory Forecasting?


Inventory forecasting involves mapping and maintaining stock levels required to complete customer orders. You do this by estimating how many products you’re likely to sell over a specific period. Managers use past sales data – taking into account future promotional campaigns, various external factors, and holiday items – to accurately predict inventory levels.

Advantages of Forecasting in the Supply Chain


Current forecasting technology uses artificial intelligence and machine learning to help companies plan. Instead of having to adjust your inventory based on customer needs manually, you can use past samples of inventory data to determine consumer demand patterns. Even models such as holiday purchasing can be accounted for, helping modify your projected demand based on previous years as well as current market trends. It can be challenging to perform such forecasting manually, as large amounts of data need to be taken into account. A specific product or SKU may presently be in decline but may see a boost every holiday season. A manual or traditional model of inventory management may be limited to the past few months, and therefore recommend that you cut back on supply. An inventory management system digs deeper and will realize that the product’s demand will likely boost during the holiday season even though it’s currently in decline. While a business owner will be able to recognize these types of trends over their highest profit or most notable items, it’s unlikely that they will be able to notice those trends over hundreds or thousands of inventory items—and that could result in lost revenue. Advanced forecasting makes it possible to capture these insights, even over the most significant amounts of inventory and particularly complex inventory chains.

Talk With Taylor


Don’t turn a blind eye to inventory forecasting. Without proper inventory management, you could miss on the many cost-saving opportunities and benefits that come with inventory forecasting and supply chain management. Talk with Taylor today!


Warehouse Management System (WMS) Guide
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