564: Discover Why Peak Season Is A Margin-Making Event, Not An Ops Event, with Shipium

Geoff Tamman of Shipium & Dean Freson of ODW Logistics talk about reframing peak season as a margin question; simulation; network redesign; & demand surcharges.  IN THIS EPISODE WE DISCUSS: [03.08] Why peak planning conversations are almost always about capacity, labor, carrier commitments – but much less often about margins. "It's an overlooked topic, until it's too late… A small rounding error in August is multiplied exponentially in December – that one penny becomes millions." [05.25] People, systems, or carriers – the first thing that breaks on your worst peak day. "Peak is a four letter word, but the real four letter word is cost. Those peaking surcharges, volume tiers… How are you managing those components, to ensure you're putting the right capacity in the right carrier in the right method, to manage cost structures and margins?" [07.52] What you can still influence in October, and what's already locked in. "If you haven't already, take a second look and audit your contracts." [11.20] When you hit peak, the network runs hot and volume triples; the cost per parcel changes first, and what often surprises people. [12.52] Managing demand surcharges, and what cost can look like at different times of year. [16.44] How you can determine whether you're making money during peak, instead of waiting to find out in February. [18.25] The signals to look at in the first week of peak that tell you whether the network is still economically healthy, rather than just keeping up with volume. "Start to pay attention to the lanes, the origins and destinations." [22.36] How much a 'good' routing or rating decision matters when you're processing millions of parcels, and what happens when that decision gets slower or less accurate. "'Good' isn't good enough. You need precision, alerts and alarms and all those things. But, more so, you need a system and services that are looking at all at these micro decisions and asking: If you're doing a million units a day and one is off, why is that one unit off?" [25.54] The peak decisions Dean would simulate now before committing to them, rather than discovering the answer later down the line. "Having the ability to simulate helps us make a business decision rather than a gut reaction, and understand the impact financially." [30.44] The operational improvement that has had the biggest measurable impact on cost per parcel at ODW, and how they identified it. [31.34] What last peak taught Dean that changed ODW's network design. [33.35] Which parts of last year's peak network Geoff and Dean would redesign today with everything they know now. "Understanding exactly how the carrier volumes and mix plays into the peak surcharge, and how it's calculated. Last year we didn't have all the same tools we have available today, so we're in a better place now with Shipium as a partner." RESOURCES AND LINKS MENTIONED: Head over to Shipium's website now to find out more and discover how they could help you too. You can also connect with Shipium and keep up to date with the latest over on LinkedIn, or you can connect with Geoff or Dean on LinkedIn. If you enjoyed this episode and want to hear more from Shipium, check out: 502: Current Success vs Future Potential: Finding the AI Balance, with Shipium 491: 2028 – Shipium Counts Down to the AI Revolution 299: Modernize Your Ecommerce Supply Chain, with Shipium Check out our other podcasts HERE.