The 2020 holiday season is going to be unlike anything in memory. The COVID-19 pandemic means travel restrictions, health and safety concerns, and social distancing. Together, these factors mean that online holiday shopping is anticipated to be the largest ever. Adobe Analytics predicts U.S. online holiday sales will reach $189 billion in 2020, up 33% from the prior year. In fact, online store sales projections for Cyber Weekend 2020 hit $51.1 billion, almost double 2019. This tremendous increase in volume has significant implications for the logistics industry. This post explores how third-party logistics (3PL) companies are gearing up to deliver over this unprecedented holiday season.
Delivery Delays Possible
Demand may very well outstrip capacity. In fact, delivery delays of one or two days are likely to be common, according to Satish Jindel, president of ShipMatrix, which analyzes shipping package data. Jindel projects that during the 34-day period between Thanksgiving and Christmas, 86.3 million packages a day will require shipping; however, he anticipates total shipping capacity for the industry to be 79.1 million parcels a day. How can you best anticipate or avoid these delays? Turn to the experts–3PLs.
Ecommerce fulfillment depends on getting items to the customer quickly and efficiently. To do that, you need to have inventory in warehouses ready to be picked off the shelves and packaged. 3PLs have the warehouse space ecommerce requires. In 2019, 3PLs accounted for about 800 million square feet of warehouse space across the U.S. (according to CoStar Group). When you consider that Amazon has 290 million square feet of warehouse space, the capacity offered by 3PLs becomes apparent. Many online vendors are looking to 3PLs who offer warehouse spaces in different regions to achieve their ecommerce fulfillment goals.
From April to October 2020, the U.S. added 146,700 warehouse and storage jobs, and holiday hiring is expected to add thousands more. 3PLs have the experience and expertise to increase their workforce and maintain a high degree of health and safety protocols at the same time. When logistics is the sole area of specialization, clients can feel confident that everything is being done with the greatest efficiency that safety will allow. Some 3PLs include automation or partial automation as well.
Together, transportation and warehousing industries added 108,200 jobs in October, according to recruiting firm Challenger, Gray & Christmas. That’s a 198% increase over October 2019. What that means for you is that there are not only more workers in the warehouses, there are more drivers, too. 3PLs have years of experience in hiring the best drivers. With strict vetting, real time tracking, and electronic logging in place, 3PLs are perfectly positioned to give you the best possible options for getting your goods to your customers. Working with 3PLs makes good business sense.
Chaos or Control
Your brand depends on the whole experience that your customer has, including speedy delivery. With the right 3PL, you have the best chance of enhancing your brand during this COVID holiday season. With the warehouse space to appropriately stock your inventory, the workers needed to pick and pack it, and the drivers to deliver it to your customers. This holiday season, there’s the potential for significant chaos, but by using a 3PL service is one way you can achieve some control.