We had a phenomenal shipping season, with a 29% surge in orders and a 23% surge in units shipped compared to last year in November and December. We want to express our gratitude to all our customers for their collaboration, which ensured a smooth and successful holiday season. Delivering our customers' orders promptly and accurately was our top priority in Q4, and it required extensive preparation over several months. We would like to share our preparation, execution, and key takeaways from the holidays.
How DCL Prepared for 2023 Peak
Leading up to Black Friday Cyber Monday (BFCM), there was uncertainty about what to anticipate. Despite worries regarding economic challenges, demand at DCL and in the consumer economy remained stable.
Here's how we prepared for the holiday season
Started peak planning in February to discuss block-and-tackle operations
Made significant capital investments to increase our operational efficiency. To quantify significant, we spent more capital on structural improvements in 2023 than any other year in DCL history (big growth!). This included expanded conveyance in Ontario and Louisville (here) and warehouse redesign in Fremont (here).
Our Transportation team was able to get volume discounts and drive down surcharge rates, in some instances by $2 per package (here).
We were able to pass all surcharges through (as is) or absorb some or all of the costs for our customers.
Secured increased carrier capacity and extended cutoff times.
We proactively collaborated with customers to get holiday volume forecasts and promotional calendars (starting as early as the summer). We staffed and prepared our operations according to forecasts to stay within SLAs, communicate capacity to carriers, and ensure all products got fulfilled and delivered on time.
We made software and conveyance upgrades to enhance our package sortation and to provide our carriers with better daily visibility on pick-up needs which led to faster carrier load times and more efficient injection into the carrier networks.
Our software and operations teams collaborated to make upgrades to our Warehouse Management System (WMS) to increase our fulfillment output (i.e. orders per hour), reducing our need to bring in temporary labor in all facilities.
2023 Holiday Recap
We saw brands launch their usual strong discounts leading up to the holiday rush but seemingly saved their marketing dollars specifically for the BFCM period. As a result, customers pounced on the promotions, order volume was exceptional in the economy and DCL was no exception. We had strong demand leading to recording-breaking volume for November and December
Here's a breakdown of our performance during BFCM
Orders and Units shipped in November and December experienced year-over-year growth of 29% and 23%, respectively.
From Black Friday through Cyber Monday, there was a 59% year-over-year increase in the number of orders shipped.
Our Transportation team was in frequent communication with our carriers to ensure they met their agreed-upon pick-ups and capacity commitments. There were no issues with the performance of carrier pick-ups during this period.
Order fulfillment SLAs for November and December achieved 99.2%. This average was impacted by a temporary decrease from Black Friday to the following Wednesday, when customer volumes surpassed our forecasts.
In the weeks leading up to and following Black Friday, there was an uptick in rush receipts. Despite this, we managed to process these receipts swiftly without any significant delays.
Our quality team worked overtime this year to match order volume. They work on a percentage basis, so when order volume increases, so does their volume of quality checks. They matched the growth you had to ensure premium quality assurance across all accounts.
