Earlier this week, Supply Chain Matters updated readers on initial data and mixed results related to the recent Black Friday and Cyber Monday holiday shopping weekend. After reviewing very preliminary data related to online order volumes, we addressed another factor related to this past weekend’s shopping events, namely that many of the population areas across the U.S. Midwest and East Coast regions encountered severe winter storms resulting in significant ice and snow. We speculated that this might have added to the impetus of consumers to shop online vs. a trip to local shopping malls.
We further noted the silence of Amazon, the kingpin of online sales growth.
That silence was broken yesterday when a number of online and general media outlets began reporting that Amazon Prime customer were not happy with delivery of their online goods.
As initially reported by the site Recode, Amazon indeed acknowledged that some customers’ orders experienced shipping delays as the company struggled with high demand and winter storms. A spokesperson for Amazon indicate to the site: “We are off to a record-breaking start to the holiday season and on peak shopping days, delivery promises vary and may be longer than normal based on order volume and the fulfillment and delivery capacity available in a given area.” Further noted was: “The winter storms that swept across much of the country at the same time also extended delivery times in some areas. We will work directly with customers who are experiencing an issue with their delivery.”
Since the original report, other outlets have run with the logistics hiccup headline and this evening, most of the major U.S. news networks featured the story on news broadcasts.
An Amazon spokesperson told Business Insider: “We’re serving customers with our fastest holiday delivery speeds ever including Same-Day and One-Day deliveries. Some deliveries were briefly impacted by weather earlier in the week, but we worked quickly to re-balance capacity across our network, setting customers up for a great rest of the season.”
“Seen a few reports that saying we’re having delivery problems. Not the case,” tweeted Dave Clark, Amazon’s senior vice president of worldwide operations. “Some deliveries were briefly impacted by weather earlier in the week but we quickly re-balanced capacity and it’s all systems go now. Thanks to our customers for what looks to be another big holiday.“
According to the Recode report, Amazon Prime customers immediately flocked to social media affording little sympathy to the online giant. Adding to the consternation was a posting on Amazon’s Facebook page lauding a successful holiday weekend and thanking customers for their business.
GeekWire reminded readers how the online retailer doubled the number of seasonal hires up to 200,000, along with experimenting with using temporary warehouse space near its fulfillment centers to give platform sellers room to stage their inventory and quickly replenish items that are selling fast. This blog had earlier highlighted for readers the reported $1.5 billion in supplement investments made to promise the online retailer’s Prime members same-day or one-day delivery services for this holiday season.
Today, Clark tweeted: “We quickly re-balanced capacity and it’s all systems go now”
Regardless of all the back and forth, it would appear that Amazon is just as vulnerable to logistics and transportation delays as any other carrier. As noted in our previous updates, with FedEx out of the picture, the Amazon Logistics network has to lean on parcel carriers DHL, UPS and the U.S. Postal Service for backup.
Prime members who pay an annual fee for guaranteed shipping services obviously have little sympathy for explanations as to why shipping commitments slipped.
In our last Supply Chain Matters holiday fulfillment update we noted: Bottom-line, the 2019 holiday fulfillment period may turn out to be somewhat different when all the dust settles. A lot more appears in-store.
Indeed, there is a lot more to come and the weak link is turning out to be logistics networks. In the meantime, Amazon can ill afford further glitches across its logistics networks since all eyes are now turned to that direction.
© Copyright 2019, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.