Thursday, October 13, 2011

Holiday Traffic Jam?

Holiday Traffic Jam?

Bloomberg warns of potential capacity crunch for fourth quarter deliveries.

If consumers decide to open their wallets this holiday season, retailers and other shippers could get caught in a trucking capacity crunch, as stores rush to restock depleted inventories, warned Bloomberg business news.

During the 2009 holiday season, retail demand spiked unexpectedly, forcing stores to expedite merchandise shipments before Christmas to accommodate growing demand. That year, parcel and air-transport firms benefited from a late-year surge in business, said Justin Yagerman, an analyst with Deutsche Bank Securities in New York.

Declines in imported container volume and domestic trucking show that “cautious retailers are tightly controlling inventories right now,” according to a transportation analyst at Robert W. Baird & Co. Consumer confidence has remained low, ahead of the approximate mid-October cutoff for initiating container shipments from Asia in time for holiday delivery, so if the retail outlook does strengthen, air carriers will likely once again be the beneficiaries.

Some positive factors are in place. Gasoline prices have fallen 10 percent from their peak in May, and U.S. shoppers have pared their debts. Target reported their website crashed in late September, overwhelmed by buyer interest in a collection of designer Italian fashions.

Crystal balls are notoriously unreliable when it comes to predicting the behavior of the American consumer. But if you need to have ducks delivered during the fourth quarter, you would be well-advised to consider your company’s supply chain, and be sure you have all those ducks in a row.

Kirk Shearer
800-989-0054 x103

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