Santa was worried about this holiday season
At the beginning of the holiday season, it appeared that Santa might be struggling this year to get the gifts out on time. Experts warned that global supply chain issues could cause extended production delays, and shipping might rumble, slowing package deliveries to millions of Americans in the weeks and days leading to Christmas.
Halloween had just passed at the beginning of November, and Black Friday was just around the corner. As a result, our Santa(s), the merchants, and logistics companies prepared for the usual holiday logistical bottleneck.
The demands from Santa are expected to be growing this year to double-digit growth rates. The National Retail Federation (NRF) predicts that holiday sales in November and December would increase by 8.5% to 10.5% between now and 2020, totaling $843.4 billion to $859 billion. Furthermore, the NRF predicts that online sales would climb by 11 to 15% to a total of $218.3 billion to $226.2 billion by 2020 in the US.
Santa was worried that this increase in e-commerce would further strain an already strained supply chain.
Santa and the elves did a great job this Christmas
As we approached the end of the holiday season, we still had to believe that Santa could pull it off in style, given the global supply chain’s constraints. Despite the nervousness of many retailers, the gifts have reached their destinations.
Holiday consumers have gotten their presents on average on time despite initial concerns. Many customers helped Santa by purchasing early and in person from the stores instead of shopping online. Retailers planned ahead of time and took action to avoid further bottlenecks. And the elves, the delivery businesses, were prepared adequately and responded with the same agility. Logistics companies recruited sufficient personnel on the ground (enough elves) and constructed enough warehouses to avoid being suffocated by a last-minute flood of goods.
Most shipments delivered by UPS, FedEx, and the Postal Service during the holiday season are presents headed for home addresses. And virtually all arrived on time or with slight delays. According to ShipMatrix, UPS and the Postal Service delivered almost 97% of their goods on time between Dec. 12 and Dec. 21, with FedEx close behind at 91%.
The supply chain strain is far from over
This Christmas, Santa did a great job, but that does not imply that the supply chain crisis is over. Big-ticket products, such as new automobiles, are still challenging to find due to a lack of crucial parts, such as semiconductor chips. And costs for a wide range of commodities are rising. The freight rate, charter rate, custom data, and ocean booking data indicate that the supply chain crunch is not over. Each of these figures is still around its all-time high.
Another indicator of supply chain stress is the number of container ships waiting for berths in Los Angeles and Long Beach ports, which handle around 40% of all containerized imports into the United States. The higher this queue number, the more inventory is in transit rather than ready for sale. Shipping containers (from Shanghai) to the West Coast for the holiday season – if you can get one – may now cost up to $32,000, a 400% rise in previous years.
The line off Southern California ports peaked in Q1, dropped in Q2, then rose to new heights in Q3 and into Q4, well exceeding Q1 highs.
The magic that helped keep Santa running on-time
Experts warn that shipment delays might last through the holiday season and into next year due to a stretched supply chain.
Santa was struggling and fighting a series of delays. Products are certainly arriving later at ports, and this delay is flowing down further through the supply chain. When you combine that with shortages of truck drivers and various other labor groups, consumers have fewer options this year. No retailer likes to have empty shelves for Christmas, so logistics companies used every weapon in their arsenal to assist, including absorbing some of the cost escalations.
With the wonder of advanced TMS and visibility technology, Santa was able to easily exceed expectations for every child’s every wish. With Turvo, Santa anticipates and conquers any Christmas difficulty, keeping the elves efficient and creating the most sustainable route for Santa and his reindeer from the first chimney to the final mile. Turvo’s advanced supply chain solution allows companies to plan, execute and settle their business while also combining all internal and external systems into a single platform, reducing unnecessary tasks and simplifying business operations. Turvo uses cloud-based technologies and mobile applications to connect the global supply chain.
Turvo helped Santa see everything from every system, person, and organization associated with getting this year’s gifts from the north pole to under the tree. Contact Turvo to learn how the most advanced TMS and collaboration application can help you get through the holiday season and beyond.