Initially, forecasts called for this peak season to be bigger than ever for FedEx Ground. But the Fed raising interest rates, the threat of a global recession, and inflation have all served to cool consumer discretionary spending this holiday season. What does that mean for those who own FedEx Ground Routes or are looking to buy them? Here’s a look at peak season forecasts and what they mean.
Fewer Packages and Deliveries
The first thing the recession and possible slowdown impacts is the number of packages and deliveries. There will be fewer packages and fewer deliveries overall if predictions hold. What that means is that while peak will still happen, and it will likely still be large, but the rush will be somewhat mitigated.
But a word of caution here: it is still best to be prepared for high-volume days. Weather and other factors will still come into play, as we have discussed on his blog. The steps you need to prepare for peak need to stay the same, and an understanding of the current market fluctuations will help.
The key is to be flexible and go with the flow of the deliveries and packages that actually come down the belt to be loaded on your truck.
Less Shipping Activity
In addition to fewer packages to deliver, peak season forecasts also predict there will be less shipping activity. This only makes sense: fewer consumer orders means that your shippers will not be shipping as many orders. Maybe.
This can be impacted by the type of shipper as well, and the kind of goods they provide. Bargain shoppers often gravitate toward less expensive items, and your shippers may also run sales to attract more orders. Like deliveries, it is still best to be prepared for higher volume.
Also, have conversations with your shippers. Ask about their plans and anticipated demand for the coming peak season. This will help you be prepared for what will actually happen on your route rather than following a broader company-wide prediction.
If you are looking to bring on helpers and extra drivers for peak, this is a good time to warn them that they may only be needed part-time. You can combat this by sharing helpers and drivers with other route owners, hiring part-time to start with the idea that things may pick up, and helping to manage expectations for your staff if you have one.
You also might want to put some friends and family on standby to help out if things get too busy. Around the holidays, people often want to bring in some extra cash if they can, and that may work to your advantage.
Prepare for Peak Season Forecasts to be Wrong
Lastly, prepare for peak season forecasts to be wrong. We have addressed this throughout this blog in various ways. But it bears repeating that peak forecasts are sometimes wrong. Consumers do things that surprise the “experts.” They spend differently, travel more, and even borrow to make their holiday season brighter.
As a result, you can’t always count on those predictions to be 100% accurate. Also, broad peak season forecasts may or may not apply to the area where your route is located. Take what experts tell you and make your own decisions based on what you know or have experienced in past seasons.
And if you are new to the FedEx Ground route business and this is your first peak, this may be a great learning opportunity for you. And if you’re looking to buy a route, doing a ride-along and learning about the business you want to buy might be a great idea during peak.
When you’re ready to buy or sell, we’ll be here for you at route advisors. Contact us today. We’ll be with you every step of the way.