Logistics Providers Work to Shore up Holiday Supply Chains

The months of November and December are the biggest time of the year for retailers of all shapes and sizes, according to the National Retail Federation (NRF). In fact, this seasonal period can account for as much as 30 percent of a company’s annual sales. For 2015, the NRF reported a 3.7 percent growth in holiday sales to $630.5 billion, and a 4.1 percent growth during the same period in 2014. On average, retailers have reported a 3.1 percent annual increase in holiday sales since 2005.

According to PwC’s 2016 Holiday Outlook, shoppers plan to spend 10% more this holiday season; an average of $1,121 each. And consumers with annual household incomes less than $50,000 told PwC that they will increase their percentage spending levels even more than consumers overall. PwC also says 62 percent of retailers expect an increase in overall sales this holiday season.

This growth presents both opportunities and challenges for companies that face the obstacles of scaling up their supply chains every year to accommodate the expansion. As we saw in 2013 and 2014, these efforts aren’t always successful. Immediately following the 2013 holiday season, for example, both UPS and FedEx came under fire for not being able to handle the holiday rush.

“Holiday spirit turned to rage today as irritated consumers dealt with a third day of broken promises,” USA Today reported in UPS still staggering under holiday crush, “while UPS, the world’s largest package delivery company, staggered to recover from a holiday crush that caught the service unprepared and left thousands of people short of gifts under their Christmas trees.”

Getting it Right This Time

Fast-forward to 2016 and it’s evident that parcel carriers (like UPS and FedEx), truckload/less-than-truckload carriers, logistics providers like Odyssey Logistics, and individual shippers have taken steps to shore up their supply chains to accommodate the busy holiday season. To meet their goals, many companies are turning to technology for help.

In Forbes’ How Technology Is Driving Logistics This Holiday Season, transportation consultant Andrew Schmahl discusses how logistics firms are leveraging new technologies to optimize delivery methods and help their clients meet the demands of the holiday shipping season.

“Gone are the days when logistics companies could get by simply focusing on operations,” Schmahl writes. “The ability to provide on-time deliveries now meets only a minimum standard of success, despite extreme weather and increased volumes going through the same infrastructure.”

In addition to using technology to help optimize delivery locations, logistics companies must also leverage new technologies to optimize delivery methods, Schmahl adds.

New mobile apps and real-time data analytics tools allow retailers and logistics partners to dynamically select which channel best optimizes speed, cost, and convenience, including nationwide express networks, regional carriers, postal consolidators, or even local couriers.”

Giving Shoppers What They Want

Here’s the bottom line: Shoppers want simplicity, convenience and options to meet their needs.

“Going forward, we expect emerging technologies like ‘Blockchain’ (i.e., a technology that underlies bitcoin, where it serves as the public ledger for all transactions) will continue to help boost growth among logistics companies working together for different parts of a package’s journey,” Schmahl concludes, “and for this boost to increase reliance and trust in nontraditional carriers.”

Odyssey has the technology you need to shore up your supply chain this holiday season

Odyssey is ready to help your organization meet all of its customers’ needs this holiday season. If you have any specific questions about your supply chain and how we’re using technology to ensure a streamlined process now and throughout the year, please reach out to your Odyssey representative.