How Brands Are Navigating Rising Costs This Peak Season
by Lori Boyer
Peak season always puts pressure on margins. But this year? The pressure is different—and heavier.
Rising costs are hitting from all sides:
- Shipping costs surged 8% in 2024, and are still climbing.
- New tariffs on key Chinese imports are forcing many retailers to rethink product strategies mid-season.
- Carriers continue to adjust peak pricing and surcharges in response to capacity volatility.
In short, the old “lock in rates and hope for the best” model won’t cut it in Peak 2025.
How big brands are adapting
Brands like Costco are taking a highly proactive approach. The company is diversifying its sourcing to reduce tariff exposure, leaning into private-label products to protect margins, and pulling forward inventory to avoid late-season spikes in costs and capacity constraints.
Walmart and Unilever are attacking the problem at the packaging level. Both are reworking packaging designs to reduce waste, shrink dimensional weight fees, and lower transportation costs.
Meanwhile, brands like Target and Nike are using pricing levers to stay ahead. Target has raised prices selectively on key SKUs, while both brands are scaling back promotions to protect margin.
The common thread? There’s no single lever. Winning brands are taking a multi-pronged approach, adjusting constantly as conditions evolve.
How smaller brands can adapt
For smaller brands, you may not have the same sourcing flexibility or pricing power—but shipping strategy is one of the most controllable levers you do have:
- Use dynamic rate shopping to automatically select the best carrier/service based on current rates and surcharges.
- Build multi-carrier flexibility so you can shift volume quickly if one carrier’s costs spike. Audit packaging and SKU mix to identify margin-draining products or inefficiencies.
- Model shipping cost impacts into your pricing and promotion strategy.
Why this matters
You can’t control tariffs or market-wide inflation. But you can control how much of that pressure reaches your bottom line—and smart shipping strategy is one of the fastest ways to defend margin.
In Peak 2025, brands that treat shipping strategy as a lever—not an afterthought—will be far better positioned to protect profitability and stay competitive.
Want more strategies? Download our free ebook: Why Peak 2025 Is Different—And How Leading Brands Are Adapting → [Download the ebook]