As Black Friday approaches, the logistics sector is bracing for a potential financial blow due to surging shipping costs. This increase could pose a significant challenge to supply chain businesses, potentially impacting profit margins.
The Impact of Rising Shipping Costs
The logistics sector is gearing up for Black Friday, a process that requires year-round preparation to ensure a seamless consumer shopping experience. However, this year’s operations may face hurdles due to the annual increase in shipping costs around Black Friday. Last year, nearly a third of firms in the sector experienced cost hikes, with carrier rates soaring nearly 25% during the Black Friday week. This surge drove average per-item delivery expenses from £3.50 to £4.37, according to a recent report by Mintsoft, an order fulfilment software provider.
Staffing and Stock Challenges
In addition to higher delivery charges, logistics companies also grapple with labour shortages during the peak shopping season. Over 90% of supply chain firms report needing temporary workers to meet demand spikes. However, nearly 18% of these firms struggle to find enough workers, further straining operations. Last year, firms using Mintsoft’s software processed a record 1.2 million orders on Black Friday alone, a 35% increase in dispatched orders. This figure is expected to rise another 14% this year, adding to the pressure on operators to ensure quick, accurate fulfilment.
Adopting Agile Approaches to Handle Peak Season Uncertainty
In response to shifting consumer habits and geopolitical disruptions, some logistics providers, like Aramex UK, are moving away from rigid forecasts. Instead, they are adopting a demand-driven approach, adjusting shipping capacity as needed and offering tailored solutions for both established retailers and start-ups. This strategy allows them to handle rapid shifts in consumer demand and avoid disruptions during high-traffic periods like Black Friday and Cyber Monday.
As the retail sector enters its busiest period, companies across the supply chain are feeling the strain of peak season pressures. However, by adopting agile and flexible approaches to logistics, they can better navigate these challenges and meet rising consumer expectations.
