Holiday Shipping & Supply Chain Update

by LJM Group

Holiday Shipping Update & 2024 Landscape:
This was the timely topic discussed on November 20th at the Telsey Advisory Group online webinar featuring LJM Group, leaders in parcel shipping logistics and Carrier contract negotiations since 1998, with a focus on personalized consulting services, cost management, and spend recovery.

Key Takeaways:
In 2023, logistics reflected a slower world economy in general, and the effects of rising inflation helped open capacity. Carriers announced historically high shipping rates, and these increases are expected to stay.

Unit levels are normalizing with 2023 seeing an increase over 2021-2022. Despite the impact of the pandemic, shippers may still be ahead due to the unprecedented growth in shipping during that time.

This holiday season is marked by a decrease in supply chain bottlenecks and inventory shortages. Carriers and shippers alike are generally well-positioned and sufficiently staffed. In response to higher Carrier rates this season, shippers should encourage early orders and strategic marketing to push inventory and reduce shipping costs.

Holiday shipping cut-off dates for UPS and FedEx are 12/21 for next-day and 12/15 for ground, similar to 2022. Coast-to-coast is 5 to 7 days. Carriers will continue to increase fees for peak weeks, but shippers are responding by spreading out peak volume and focusing on store replenishment to avoid fees and lessen strain.

Weather remains an unpredictable factor. Winter storms historically prevail, and both UPS and FedEx hired 100k seasonal workers.

Amazon shipping became a reality in 2023 with several beta tests. Amazon will be competing with the Carrier duopoly more in 2024 and beyond.

AI and automation emerged as game-changers that will continue to transform the shipping logistics landscape. Almost 20% of online purchases involve AI and the trend will continue as it benefits both shipper and client, enabling management of inventory and insight into customer behavior.

Food delivery and crowd-sourcing models are evolving, requiring retailers to adapt.

In 2024, Carrier rates will continue to increase along with expected volume, and shippers need to watch carefully for dynamic pricing. Additionally, accessorial and late payment fees bear careful monitoring. These conditions necessitate a focus on stringent logistics and audit processes.

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