Back in October 2021, I wrote in this column that the peak season that year would not be traditional. That lack of normalcy was the result of supply chain problems brought on by a once-in-a-lifetime (we hope) pandemic. We were dealing then with what my publisher termed “whack a mole” supply chains: One supply chain issue would pop up, we’d whack it with a solution, only to see another one arise.
Lots of inventory had been brought in during the summer of 2021 to ensure that customers did not face the empty shelves of the prior peak season—which was, of course, the first Christmas of the Covid pandemic. But there was a downside to that: Efforts to build up inventories led to higher acquisition, transportation, and carrying costs, which fueled the inflation and higher interest rates that have been with us ever since.
On the brighter side, the pandemic taught us some important lessons about agility and resilience. Faced with nearly constant disruptions, supply chain managers quickly learned how to turn on a dime—a skill that has served them well during our current year of uncertainty.
Take the upcoming holiday season, for example. Newly imposed trade policies have caused the 2025 holiday season to be split into two distinct parts—what some supply chain professionals are calling a “bifurcated holiday peak.”
It started when retailers got the first whiff of possible tariffs. We hadn’t even finished the 2024 holiday season when companies started front-loading purchases to beef up inventories ahead of the tariffs. That continued throughout the spring, when we saw rapidly changing tariff policies and increasing inventories to match. But these importers were not alone in their strategy. With so many aiming to avoid tariffs, we experienced a surge in demand for transportation and warehousing capacity, resulting in considerable increases to total landed costs.
Much of that new inventory was then dispatched to storage until it was needed. That is where we are today, as we enter the second part of our split season. The focus now turns to DCs and the trucks needed to move products to stores in time for holiday shopping.
We have a couple of months to see if this strategic gamble paid off. Will the inventory that was ordered so early prove to be the right merchandise, and was it enough? Will consumers be in the mood to buy this holiday season? What happens when it’s time to replenish the inventory, and how much of the tariff-induced price increases will be passed on to consumers, further fueling inflation?
Throughout this decade, one thing can be said—supply chains are never boring to watch.
