A full supply chain, including air cargo, ocean cargo, and freight
A full supply chain, including air cargo, ocean cargo, and freight
Wed 11/08/2021 - 23:04

Preparing for Peak Season: 3 Things Impacting Supply Chains Today

Author: Zach Warrick

2021 is a year of continued supply chain disruption across industries, and with peak season approaching, now is the time for retailers to examine current logistical challenges. Let’s examine three primary challenges facing supply chains today: strained e-Commerce deliveries, global shipping disruptions, and continued labor shortages.

 

Consumer Demands Continue to Strain E-Commerce Deliveries

A skyrocketing surge in consumer demand is constraining shipping capacity after a complex 2020. Growth may slow, but per Axios’ Sam Ro, consumer demand is “like a coiled spring”. For many, existing supply chains were not equipped to handle the rise in consumer demands.

Additionally, consumers continue to shift strongly toward e-Commerce. Online retail grew two-to-five times faster in the COVID-19 crisis than in previous years, and many retailers are continuing to reshape their supply chains to meet the change in consumer shopping habits. The shift to e-Commerce has also led to a shift in delivery expectations. Up to 69% of consumers are much less or less likely to shop with a retailer in the future if an item they purchased is not delivered within two days of the date promised. Yet average supplier delivery times have increased to record levels.  According to the U.S. Postal Service, 1 in 5 pieces of mail in the country was delivered late in the first quarter of 2021.

Delivery is key to customer satisfaction, and retailers should consider risk mitigation strategies, such as navigating vendor lead times and diversifying their carrier portfolio to navigate these constraints.

 

Global Shipping Disruptions Threaten Peak Season

Peak season, with traditional holidays and extended seasonal events, is on the horizon. An already disrupted supply chain will complicate inventory forecasting and management.

For example, a recent COVID-19 resurgence in China further threatens already strained supply chains. Additionally, shipping is still recovering from the backlog created by the container ship Ever Given’s blocking of the Suez Canal. Nearly 400 ships were delayed during the week-long blockage.

Due to ongoing shipping delays, retailers already started ordering ahead of peak season. Historically, third-quarter bookings tended to be the norm. This year, many retailers began ordering in June. Increased demand has created an extended “peak season” environment, which only extenuates delays. These delays may extend for another year.

 

Continued Labor Shortages

Finally, the United States currently experiences a substantial shortage of truckers and warehouse workers. A study by the American Trucking Association predicts that the shortage will likely double within the next decade.

Organizations cannot simply slow down their supply chains, however. With customer demands only increasing, strategies must be deployed to attract talent in a high-demand environment.

Labor shortages also emphasize the importance of warehouse and supply chain automation. By incorporating more automated solutions, supply chains can bridge the gap created by labor shortages.

 

How GEODIS Can Help

While retailers cannot fully control every aspect of their supply chains, they can still seek solutions to improve their supply chain management. Planning for and staying ahead of the serious supply chain delays is crucial.

Navigating complex supply chains requires expertise and adequate resources, and GEODIS is here to help. We deliver exceptional value by improving supply chain efficiency, profitability, and customer satisfaction across the supply chain via our contract logistics, transportation, and freight forwarding services.

To find out how GEODIS can help you realize these goals, schedule a call with us today.

 

 

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