Freight costs and capacity constraints can directly impact festive-season margins. If freight costs increase around 20% – 40%, brands relying on last-minute capacity could see a significant increase in their landed cost. At the same time, limited space means that last-minute requests may not be accommodated easily. Brands that plan their freight requirements ahead of the festive season can secure capacity earlier, evaluate alternative routes and reduce the risk of paying a premium or missing a critical shipment slot, writes Utkarsh Tripathi, Co-Founder and Chief Operating Officer (COO), Hexalog.
What are your expectations on year-on-year (YoY) change in shipment volumes ahead of the festive season?
We expect cross-border shipment volumes to register double-digit growth year-on-year in the run-up to the festive season. The acceleration in demand is already visible, and with brands preparing for higher consumer activity, the pressure on freight capacity and logistics networks is expected to intensify further. For businesses operating across international markets, the festive period is increasingly becoming a test of how well they can anticipate demand and secure capacity rather than simply respond to orders as they come in. Average transit times are expected to remain relatively steady, but space availability is emerging as the more immediate constraint. During peak periods, brands that have not planned their freight requirements in advance are likely to face greater difficulty securing capacity. The challenge, therefore, is not necessarily that shipments take longer by default, but that limited space can make last-minute movement significantly more difficult and expensive.
How do you expect freight costs to move across major trade lanes ahead of the festive season?
Port congestion is already putting upward pressure on freight costs across key trade lanes. Current trend analysis points to the possibility of freight costs increasing by as much as 20% in certain lanes during the peak period. This makes customised logistics planning increasingly important. Predefined routes may not always be optimal when capacity, congestion and rates are changing rapidly. Brands that can dynamically evaluate routes and capacity are better positioned to manage these cost pressures.
What do current freight and shipment activity indicate about festive demand?
Current freight activity points towards strong and accelerating festive demand, with shipment volumes expected to rise further in the coming weeks. This suggests that brands need to prepare for the operational impact of the demand surge rather than view the festive period simply as a sales opportunity. Freight capacity, customs processing, warehousing and last-mile fulfilment will all come under greater pressure as volumes increase.
Are companies are holding more inventory to protect against supply disruptions?
The current behaviour is somewhat different from a conventional inventory build-up. We are seeing customers delay orders and wait for freight rates to soften before committing, rather than uniformly increasing inventory ahead of the peak. This reflects the uncertainty businesses are navigating around freight pricing and capacity. The challenge for brands is finding the right balance between securing inventory early enough to protect festive availability and avoiding excessive logistics costs.
How do freight costs and capacity constraints can affect festive-season margins?
Freight costs and capacity constraints can directly impact festive-season margins. If freight costs increase around 20% – 40%, brands relying on last-minute capacity could see a significant increase in their landed cost. At the same time, limited space means that last-minute requests may not be accommodated easily. Brands that plan their freight requirements ahead of the festive season can secure capacity earlier, evaluate alternative routes and reduce the risk of paying a premium or missing a critical shipment slot. Visibility becomes most critical when shipment volumes are at their highest. At lower volumes, a missed scan or a delayed customs clearance may go unnoticed. During peak season, the same gap can result in a missed delivery commitment to the customer. The customer ultimately remembers the missed promise, not the reason behind it.
Peak season also comes with higher capex and tighter margins, leaving businesses with less room to recover from operational errors. A fragmented vendor chain can make this more challenging because there may be no single owner for the gap between freight, customs, warehousing and last-mile delivery. End-to-end visibility helps identify where a shipment is stuck and enables teams to act before a delay becomes a customer-facing problem.
How can delays at one stage create downstream inventory and delivery challenges?
A delay rarely remains isolated to one stage of the supply chain. For example, a customs hold can result in a missed warehouse or floor slot, which can subsequently lead to a missed delivery commitment. In a fragmented logistics ecosystem, identifying and addressing that ripple effect can take longer because different stakeholders own different stages. An integrated system can identify the disruption closer to its source, allowing teams to intervene before the impact moves downstream.
Most brands are unlikely to experiment with new suppliers or logistics routes during the festive peak itself, when the cost of disruption is particularly high. Instead, supplier and route diversification is typically tested during the off-season, when businesses have greater flexibility to evaluate performance without putting critical delivery commitments at risk. The festive period therefore tends to reward the resilience that businesses have built and tested well in advance.
How can real-time shipment visibility help companies respond to delays and changing demand?
Real-time visibility enables businesses to act while there is still an opportunity to correct a disruption. When a delay is identified early, both the brand and logistics teams can evaluate options such as rerouting, replanning the shipment or adjusting the delivery commitment. Without timely visibility, businesses often discover the issue only after the shipment has already missed a critical milestone. The value of visibility, therefore, lies not simply in knowing where a shipment is, but in creating enough lead time to take corrective action.
Are businesses prioritising resilience and predictability over the lowest logistics cost?
The industry is increasingly recognising that logistics cannot be viewed purely as a cost line. The disruptions witnessed through COVID-19, geopolitical conflicts and major trade-route blockages have demonstrated the cost of prioritising the lowest rate without considering reliability and resilience. For cross-border businesses, a slightly higher but predictable logistics cost can often be more valuable than the lowest quoted rate if the latter comes with a greater risk of delays, capacity shortages or disruption. The focus is therefore gradually shifting from cost minimisation to predictable, resilient and measurable supply-chain performance.