In times of the constant increase of online shopping, demands get higher, but who will deliver so we all have our presents under the Christmas tree this year? Many experts are of the opinion that the existing infrastructure is no longer able to support the old model of e-commerce, and a fundamental reorganization of supply chains is needed.
Even Santa Claus delivers Coca Cola with a truck, but because of the plenty of disruptions in international logistics, Christmas is a very busy time working with freight. The past couple of years holiday shopping has started as early as October. We have Halloween, Black Friday and Christmas right after each other and that’s what we call a peak season. Connected to peak season there are always elevated freight rates, capacity challenges and complicated logistical procedures. The limitations of container based freight are most acute in the United States, where 70% of imported goods arrive by sea, and there is a huge labor shortage in the logistics sector. Though the biggest losers in this type of supply chain disruption will always be the smaller players, as they will not be able to restock for the Christmas season.
Good question is if people will spend less on Christmas presents thanks to the incredible energy prices and the increased cost of living this year. We are in a financial and political storm and choices become more limited because of it. According to the International Monetary Fund’s prediction in October, global growth is slowing down from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023. Not to mention the frightening prediction of global inflation rise from 4.7 percent in 2021 to 8.8 percent in 2022.
How can suppliers and retailers keep satisfying consumers’ need for multi-channel delivery methods, low prices, and a smooth customer experience in the midst of increased competition, higher delivery costs and shrinking margins? Not long ago speed and cost were the most important factors, but today, sustainability is becoming more decisive as well. People pay more attention to packaging or the source from which companies obtain their energy. The focus has also shifted from the priority to please and serve the consumers no matter what, to cost optimization.
However challenging the conditions of the market appear, we can always find delivery and supply chain trends that are crucial to know. Digitization has had a significant impact on logistics. Several innovations have already been introduced, such as app-tracking for example, and there is always a huge demand for research to implement more efficient technologies. The goal is simplifying processes and increasing the stability of the supply chain.
Companies need to pay attention to maintain customer loyalty by offering convenient service and managing complex operations. Effective route optimization needs to consider many variables such as traffic, vehicle type, weather, driver availability, weather, parcel size etc. Facing pressuring public opinion, the needs of nature and more complicated regulatory requirements, businesses need to embed green logistics practices across the supply chain to reduce their carbon footprint.
There are many challenges and question marks, but there are always new solutions and the goal is to find a way to stay agile and to increase resilience in the face of constant change and obstacles.