Earlier this month, Supply Chain Matters posted its initial commentary to prelude what to expect in the upcoming holiday buying surge period. In that posting we observed that retailers and parcel carriers had carried over important learning from the 2013 season.
UPS has invested $500 million in plans to augment its package-car capabilities by an additional 10 percent over last year’s levels as well as dramatically flexing its capacity and intermodal capabilities at its Worldport central hub. Brown will also deploy what it terms as pop-up “mobile distribution center villages” that will function across various U.S, network points beginning with the expected holiday delivery surge.
Bloomberg now reports that Amazon has embarked on its own plans to avoid a repeat of holiday delivery snafus. A North Carolina retail advisory firm is cited as indicating that over the past 18 months, the online retailer has deployed 38 new fulfillment centers across North America, plus an additional 15 new “sortation centers” which are an added layer of capability to bypass the busy hubs of carrier partners such as FedEx, the U.S. Postal Service, as well as UPS. These sortation centers reportedly provide added flexibility to work around congestion points during high surge periods, including the all-important days before the Christmas holiday. They are further designed to be an important fulfillment component to Amazon Prime members who have signed-up for free shipping and other privileges.
As we and other have noted, Amazon is further experimenting with its own fleet of delivery vans being piloted in a select U.S. cities.
It is indeed going to be an interesting upcoming test of acquired learning as both online retailers and package carriers over the coming months. Supply Chain Matters will provide continued coverage of B2C/B2B Omni channel commerce learning during the 2014 holiday surge.