When it comes to just about everyone involved in supply chains and logistics, the holiday freight shipping season is a period circled in bold ink on the calendar. And with good reason, as it's traditionally the biggest shopping time of the year. Last year's holiday freight shipping season hit in the midst of several ongoing supply chain stresses, which that increased volume figured to exacerbate further. But recapping holiday freight shipping season 2021 shows that was not necessarily the case - even though there were still plenty of challenges for shippers, carriers, retailers and customers. As we approach the beginning of peak season this year with holiday merchandise already getting into the channel, it's informative to take a look back at last year.
Supply chain issues
The supply chain issues around the 2021 holiday freight shipping season have been well documented, but as this is a recap after all, let's go over them again. In essence, they can be boiled down to shortages, as in shortages of:
- Warehouse space
- Labor both at the ports, and among truck drivers
- Shipping containers
- Components to manufacture products
All of those issues combined with a period of especially elevated customer demand. So using the old tried and true supply and demand equation, not enough supply getting to consumers plus too much demand equaled problems. The results of those problems meant some products just weren't being made fast enough, while others found themselves stuck on ocean container ships waiting to dock and unload - and that of course, led to inventory challenges.
Did someone say inventory challenges? Perhaps the most notable characteristic of the holiday shopping season in 2021 - and one that's been an off-and-on issue since the pandemic began - were shortages of key items. On a day to day basis, people are most concerned about grocery store staples. But for the holidays, that concern shifts to gifts and decorations. What were the items most affected by supply chain issues last holiday season?
- Christmas lights
- Consumer electronics like TVs, cellphones, and laptops
- Specific kids’ toys
- Game consoles
- Fashion and accessories
That list covers just about every base, doesn't it? While not every toy, cell phone or strand of lights was impossible to find last year, supply chain issues impacted just about every type of product someone may have looked to purchase - tracing back to holiday freight shipping season. To back that up, out-of-stock messages were up more than 250% from 2019, during last year's holiday season. And even when their desired items were available at an online retailer, consumers had to have confidence that shipping challenges wouldn't cause them to be delivered in time for Valentine's Day, rather than by December 24, or they wouldn't check out.
Even before the 2021 holiday season hit, consumers had heard plenty in the news about supply chain challenges. The lessons they learned? Start shopping even sooner, as in, Black Friday no longer marked a holiday shopping kickoff. Consumers looked for gifts and pulled the trigger on purchases as early as they could, taking advantage of earlier deals offered by retailers as well. Expect that pattern to continue this year. As for shippers and retailers, they'll be looking to avoid a repeat of all those out of stock messages and lost sales. In fact, they've already taken steps on that front (and perhaps even overcorrected), as a combination of planning ahead to ensure stock and long delayed shipments coming in have left some retailers with too much inventory.
While inflation added an estimated $6.2 billion to customers' bills last year, some theorize this over-abundance of inventory could cause prices to head back down again. Another consequence of this philosophical change from just in time to super extra early logistics? Shelves in many warehouses are already fully stocked (even now). So some retailers are changing their return policies to no longer require the actual item be brought back for a customer to get paid - because their warehouses and supply chains lack capacity. It remains to be seen exactly what this year's holiday season will bring.
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