As the holiday season approaches, small businesses across Australia are gearing up for the challenges that can make this year’s deliveries more complex and costly than ever before. Peak season is a time when the confluence of high fuel prices, escalating shipping costs, and labour shortages can strain even the most well-prepared companies. In such an environment, adaptability and proactive planning are essential to mitigate financial strain, especially for businesses reliant on international trade.
In 2024, global air freight costs have already risen by 12 per cent while container rates have surged by a staggering 233 per cent. Simultaneously, consumer spending remains muted as households tighten their belts amid rising living costs and ongoing economic uncertainty. With little relief on the horizon, businesses must adopt strategies that maximize efficiency, maintain competitiveness, and protect profitability during this critical period.
Adding to the pressure, wage growth is outpacing productivity, contributing to a tight labour market and operational challenges throughout the supply chain. Businesses are now faced with the task of managing overburdened staff, rising recruitment and training costs, and the need to sustain operational efficiency.
Given these mounting challenges, early planning is crucial. Businesses must adopt tools and strategies that enable them to adapt swiftly to changing conditions. Below are five key strategies to help businesses navigate the peak season and emerge stronger on the other side.
- Embrace automation
2024 has underscored the importance of efficiency, especially with the rapid advancements in AI. Investing in automation software, such as FreightExchange, to consolidate orders and streamline processes can significantly reduce time and increase productivity. Although the initial investment may be higher, the long-term benefits – such as improved visibility over charges, operating costs, and deliveries – will pay dividends during peak season. Leveraging cutting-edge technologies can help your business better manage unexpected events, labour shortages, and rising operational costs. - Strategically reposition inventory
Positioning inventory closer to customers well before peak season can greatly reduce last-minute delivery costs and ensure faster deliveries when they matter most. Restocking inventory or repositioning goods early means you can wait until you have a full load to capitalise on cost savings. This strategy not only optimises your logistics but also helps counteract the impact of rising shipping costs. - Leverage cost-effective transport alternatives
Preparing for peak season now gives you ample time to explore slower, more cost-effective transport options. Opt for rail over road transport and sea freight instead of expedited air freight services where possible. This approach can help offset the sharp increases in container and air freight costs, enabling you to maintain competitive pricing for your customers. - Optimise offshore operations
If lead times allow, consider having your offshore suppliers handle the order picking and packing process. This can reduce the need for additional onshore staff in an environment where labour is scarce, addressing both the labour shortage and rising wage costs. - Capitalise on favourable export conditions
With the USD at an all-time high, Australian producers have an opportunity to find US customers and benefit from advantageous export conditions. Exporting to the US at scale isn’t a quick win, but you can take small steps now to sell in the US and help offset potential declines in domestic consumer spending and open up new revenue streams for your business.
Turning challenges into opportunities
The transport and supply chain bottlenecks caused during peak are always challenging. That’s why careful planning and strategic decision-making can turn these obstacles into opportunities. By focusing on efficiency, optimising inventory, choosing cost-effective transportation, and seizing export opportunities, your business can navigate the peak season successfully and emerge stronger on the other side.
