Editor’s Choice: What Early Holiday Shopping Means for Parcel Shipping

holiday shoppingNote: Today’s post is part of our “Editor’s Choice” series where we highlight recent posts published by our sponsors that provide supply chain insights and advice. Today’s article is from Logistyx Technologies.

Regardless of whether consumers and retailers are ready, holiday shopping – and shipping – season is here! With carriers announcing capacity shortages and major headlines advertising “Shipageddon,” consumers have been encouraged to start shopping for the holidays NOW.  While this elongated holiday shopping season can certainly create new revenue opportunities for retailers, retailers can only capitalize on the opportunity if their parcel shipping operations are prepared to execute.

Although the holidays have always been considered “peak season” for parcel shipping, this year’s unparalleled e-commerce growth has redefined and intensified that reality. Businesses relying on parcel shipping must prepare for a capacity crunch and delivery setbacks (nicknamed the “Nightmare on Parcel Street”) as FedEx and UPS capacity for the holidays is filled. ShipMatrix projects as many as seven million packages per day could be outside of maximum capacity for these two leading carriers’ parcel delivery services, and even regional and last mile carriers OnTrac, LaserShip, and Speedee Delivery have reached capacity heading into peak season.

Despite Amazon moving its Prime Day event from July to October, Amazon Prime Day has remained a catalyst for competitors such as Target, Walmart, and Best Buy to launch their own offers. This year, however, these offers aren’t only available for a “limited time.” Rather than halt promotions after Amazon Prime Day and relaunch the offers closer to Thanksgiving, many retailers opted not to hit pause on their holiday sales. For example, Target is offering “Black Friday pricing all November” and Home Depot is making special offers available until the end of the year.  The hope is to spread demand to prevent further strains on supply chains by encouraging consumers to shop earlier and avoid crowds and delivery delays. In addition, many carriers have encouraged retailers to run these types of sales events to increase the chances of deliveries reaching customers on time.

Extended discount periods aren’t the only changes we’ll see this holiday season. We’re also likely to witness a dramatic shift in consumer wish lists – pivoting from luxury goods to practical purchases such as home goods, office supplies, and outdoor equipment.  For example, coats and fire pits are finding their way onto many letters to Santa, as they enable friends and family to gather outside in cold temperatures while respecting social distancing guidelines.

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