Monday, December 7, 2015

Holiday On Ice?

Parcel carriers, bricks and mortar retailers headed in different directions.

More and more, presents that end up under the tree are being delivered at the front door. 

Traditional retailers continue to struggle, as do the ocean, rail and truck freight carriers who supply them, while online shopping is poised for double-digit growth. Peak season usually is the “most wonderful time of the year” for shipping companies thanks to a surge in holiday orders. But this year, it is highlighting the growing gap between the transportation industry’s haves and have-nots, reported the Wall Street Journal.

There is a stark disconnect between online and brick-and-mortar shopping expectations this year. Stores are sitting on near-record inventories as consumer spending hasn’t yet caught up with hopes of a surge stoked by low gasoline prices. Retailers are also employing new methods of logistics technology-driven inventory management for the holidays, including shipping items sold online from some stores and stocking fewer goods in others, as they attempt to better predict rapidly shifting consumer demand. This leads to more small package shipments, while American freight shipping volume fell 5.3% year-over-year in October, according to the Cass Freight Index report.

That is a big difference from UPS, which predicts its deliveries will increase 10% to a record 630 million packages between Black Friday and New Year’s Eve, compared with last year. The U.S. Postal Service announced earlier this month it expects to deliver 600 million packages during the same period, an increase of 11% from last year, while FedEx has said it would deliver 12% more packages from last year, or 317 million, between Black Friday and Christmas Eve.

Overall, online shopping is projected to grow between 8 to 15 percent over last holiday season, with Americans belatedly joining the worldwide surge of orders placed on mobile devices. Amazon said it expected its fourth-quarter sales to grow between 14% and 25%.

So for B2C businesspeople, will this be a warm and prosperous “December to remember,” or will weak sales make it a “holiday on ice?” Depends on how they handle their customers and their inventory.

Kirk Shearer
TOTALogistix <>
800-989-0054 x103

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