November 2020
What You Need to Know About “Shipageddon”
With COVID-19’s stranglehold on the international community, E-commerce has seen an unprecedented explosion in numbers over the course of 2020. For every click on that “Buy Now” button, for every credit card number punched into the payment page, there are packages that need delivering. And the resources for delivering those packages are finite.
Industry publications and newsletters are alight with talk of “Shipageddon”, and it is something you need to prepare for. That begs the question of just how you prepare for something like this. And that’s where JF Moran comes in. We may not be able to prevent Shipageddon from happening, but we can help you to understand what it means for your business.
Shipping Rates Are Still Enormous
Back in late October, the trans-Pacific market was still maintaining rates far beyond the normal level. With spot rates from China to the West Coast holding steady at nearly triple the rates from just last year, it’s obvious that business is anything but usual. At this point, though, the major concern isn’t just affording shipping. It’s finding available shipping at all. Because, despite everything going on in the world, American buying is up!
American Consumers Are Still Spending
While the global pandemic has hit the US job market hard, the numbers on spending don’t really reflect that. In fact, Commerce Department statistics from September show that consumer spending in the US rose by more than double the expected amount. Unsurprisingly, a lot of this spending is happening behind the computer, and not in stores. All of this is a bit of a perfect storm when it comes to getting those holiday packages out on time.
Shipageddon Affects Supply Chains and Shippers Alike
It doesn’t matter if you’re a consumer waiting for packages to be delivered to your doorstep, or you’re trying to restock inventory for a retail outlet. Ships and containers are full, and new containers have months-long lead times. With the further surge in sales we’re all expecting to see during the holiday season, this all spells major trouble for keeping things moving on-timeline.
What Can Consumers Expect?
Wondering what exactly Shipageddon will look like for consumers? UPS and FedEx are already pushing capacity, and the shortage on their end could result in up to 7,000,000 a day being delayed between Thanksgiving and Christmas. Those numbers are stark, but those of us in the industry also understand that there’s always a lot happening behind the scenes. 2020’s challenges are unique, of course—but we’ve learned a lot simply by making it through the year this far.
The good news is that these numbers really aren’t a huge surprise to UPS or FedEx. FedEx has been experiencing peak levels since way back in March, and has added 70,000 new employees to help make the holidays go as smoothly as possible. UPS, meanwhile, added nearly 40,000 new employees earlier in 2020, and is looking to add an additional 100,000+ seasonal staff.
The Silver Lining
You’re in the importing/exporting business, so you obviously understand how essential deadlines are in this industry. And it’s totally understandable for consumers to grow frustrated when delivery services are unable to fulfill their orders in the usual timely manner. But it’s really not all bad news.
The numbers that are causing Shipageddon to be an issue in the first place are themselves encouraging. People are spending money. People are celebrating the holidays. And, hopefully, people are planning ahead.
Does Shipageddon mean that the industry will collapse and people aren’t going to be able to get their wares anymore? No, it doesn’t. Does it mean that you really cannot wait until the last minute to get your orders in, and that communication about progress is more essential than ever?
Absolutely.
If you’ve got customers concerned about the implications of Shipageddon, it’s okay to be honest with them. There will likely be delays. Consumers probably won’t see the deep discounts they’re used to around the holiday seasons. Shipping costs may go up. But, ultimately, the system keeps moving. They need to plan ahead, and they need to understand that inventories are low. But, as always, there are logistics professionals out there working their way through all of this.
Have Concerns About Shipping Delays This Holiday Season?
We are here to work with you through them. We’ve been the logistics solutions experts to count on for decades. This year’s challenges may be unique, but our handling of challenges is equally unique. We love a challenge, and we love showing our clients how they can overcome their own.
Contact us today to discuss your concerns and to get the answers to your questions. The last thing that you want to do is to go into the holiday shipping season unprepared. Partnering with us will prepare you for even the most complex challenges that this complex industry can throw your way.