It is Friday, December 19 and the peak holiday surge of in-store and online customer fulfillment is just a two business days and hours away and the final crunch is underway. Thus far, our community already has some acquired learning from the 2014 holiday surge, learning, that stings goods producers, shippers as well as retailers and e-tailers.
Business and industry media have each reported how the U.S. West Coast port crisis impacted various brand-name retailers and exporters and their efforts to get inventory where it was needed. Goods arrived late or not at all, forcing retailers to shuffle planned merchandising and promotional plans. Yesterday, The Wall Street Journal reported on frustrations expressed by Ann Inc. owner of Ann Taylor, Chico’s, Lululemon Athletica, Perry Ellis International, Tommy Bahama and others not only for positioning holiday inventory but upcoming January inventories as well. Western U.S. exporters missed their holiday shipment windows because of the port back-ups, and will likely suffer the financial implications.
This week, FedEx reported its fiscal second-quarter earnings and beyond the numbers, reported that its network was impacted by the port crisis. The global parcel carrier implemented additional flexible airfreight capacity out of Asia to accommodate a surge of shipment re-routing needs, but capacity was described as very tight. FedEx management indicated that the carrier had to place limits on customer volumes in order to fulfill service requirements. As Supply Chain Matters has previously indicated, regardless of how the final numbers turn out, the west coast port crisis will result in noteworthy shifts in transportation strategies in the months to come.
Executives indicated that the current peak season represents the busiest in Fedex history, and volumes have been “more rational” and evenly spread. Black Friday and Cyber Monday turned out to be week-long events which FedEx executives expressed as a positive impact moving forward. Winter weather has generally cooperated with the exception of incidents of some severe storms impacting both the western and eastern U.S. coasts.
The U.S. Post Office made its presence as the Sunday delivery partner for Amazon Prime customers, and business and other media report that USPS workers are drained from having to work continuous 60 hour weeks without a break. Speaking of Amazon, the online retailer communicated to its Prime members that this weekend was the deadline to insure two-day holiday delivery. That is a hopeful sign that Amazon is cooperating with the pleas of parcel carriers to not promote the last-minute overnight shipments that crippled UPS in 2013.
Brick and mortar retailers implemented broader aspects of ship from retail store to fulfill 2014 online orders. Retailer Target is utilizing 136 of a total of1800 U.S. retail stores as local online pick and pack shipment nodes. According to the WSJ, Wal-Mart is utilizing 83 of its Supercenters as online ship from store nodes and Macy’s broadened its in-store shipping capabilities by allocating time prior to store opening for pick and pack of online orders.
The final crunch within logistics and fulfillment networks has begun. Today at Supply Chain Matters, we have placed a number of online orders with standard delivery terms as our own test of last-minute response. Already, one of our online orders has moved delivery date to December 23 from the original indication of two days prior. We placed one online, two-day delivery order with Samsung which was received on-time, as confirmed. We will initiate another test on Monday.
This author pulled into a local Mobil branded gasoline station at 7pm local time this evening and observed a UPS delivery carriage re-fueling at the diesel pump. Apparently, there were more deliveries to complete.
The last verse of the poem: Stopping by Woods on a Snowy Evening by Robert Frost exclaims:
The woods are lovely, dark and deep,
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
And so it is for brick and mortar, online retailers, carriers and logistics networks for the last days of holiday peak 2014. The last mile crunch of fulfillment is about to commence.