The transportation environment has remained challenging through much of 2021, with everything from ocean container shortages to port congestion to tight trucking capacity making life difficult for companies shipping outbound freight and receiving inbound goods.
The situation may not ease much during the fourth quarter of the year, when the biggest selling holidays—Black Friday, Cyber Monday and the holiday season as a whole—all happen.
Companies that aren’t already thinking about what they need to do differently this year could face some steep challenges as they work to get their products to and from their destinations on time.
Strong Spending Appetite
Where 2020 was the year that shoppers flocked online to do their holiday buying, experts are telling companies to be prepared for a more “hybrid” selling environment in 2021—some online and some offline.
This means stores will have to stock their physical shelves while also paying close attention to the demand that’s coming through their ecommerce storefronts. This is new territory for any company that either started or significantly escalated its online presence during the pandemic.
BlackFriday.com is already predicting a “strong spending appetite” for Black Friday 2021, which will officially kick off the holiday spending season. And while shoppers will be on the prowl for values and deals, the site says they’re not planning to take a foot off the gas as the pandemic wanes.
“That combination of consumers being more discerning about value, while also being eager to spend, signals success for retailers during Black Friday 2021,” BlackFriday.com notes. “This year, we predict that online Black Friday sales (combined Black Friday and Thanksgiving spending) will grow about 20% year over year and hit $17 billion.”
More In-Store Shopping
This may be the year that more shoppers return to stores to see, touch and feel the merchandise that they’re buying for friends, family members and colleagues. “This upcoming holiday season, retailers can expect significant store growth over last year from a traffic perspective, since shoppers are likely to feel safer returning to shopping malls,” Columbus Consulting’s Brad Eckhart tells RIS News. “Retailers [that] managed their inventory tightly during these past months of unpredictable demand must now begin building up their safety stock, carefully determining to what magnitude this increase should be.”
This may be harder than it sounds. With the holidays a few months away, and with everything from new clothes to paint to bicycles to furniture difficult to find right now, ecommerce companies will have to get creative in how they source the goods they need to stock their physical and virtual shelves. With KPMG anticipating 7% higher holiday sales for U.S. retailers in 2021 (versus 2020)—and ecommerce holiday sales expected to grow by 35%—the time to secure product, logistics services and freight capacity is now.
The Right Logistics Partner
Speaking of transportation capacity, parcel carriers are already warning customers that seasonal capacity will be constrained this year. According to Supply Chain Dive, one parcel shipper is sitting down with about 300 of its customers who make up its peak volume surge to understand what each of their demand projections are for the holidays. “The company has also announced surcharge increases ahead of peak, which are targeted toward high-volume shippers and those experiencing demand spikes,” the publication adds.
Time to start prepping for Christmas shipping capacity crunch, FreightWaves points out that the retail inventory-to-sales ratio has sunk to a new, all-time low. “And as retailers struggle to catch up, imports could be capped in the months ahead by a trans-Pacific shipping network that has reached its limit,” it points out. “That, in turn, implies more premium charges and even higher all-in costs for importers racing the holiday clock, which practically speaking, may be already ticking.”
Knowing that things are going to be pretty busy during the fourth quarter of the year, both ecommerce companies and brick-and-mortar retailers should be securing their logistics, freight and labor now in order to handle the onslaught. The right logistics partner can help companies solve their most pressing challenges and also position them to be able to take advantage of new opportunities.
“We’re closely tracking the transportation trends and taking steps to ensure that our customers get the capacity they need to be able to deliver their goods on time, all the time,” said Joe Jaska, Head of Land Transport, Americas at DB Schenker. “We’re also working closely with shippers to make they’re well prepared for the upcoming holiday season.”