Order Fulfillment Review: October 2016
Back to What We Think
As we enter the final few months of the year, it's almost peak season for retailers and the domestic supply chain gears up accordingly. If you're impacted by our industry, there's every chance that we've reached your busiest time of year as well. Time is short and shipments are about to start flying out of the door (we hope!), leaving little time to read and digest the latest industry analysis. That's what we're here for, with our monthly round-up of all the recent news and views.
Order Fulfillment Review: October 2016Here are all of the headlines we considered worthy of note in October. Let us know if you've seen something that we missed... we're always ready to add new elements to the monthly digest!
- Despite troubled times for the shipping industry, familiar uplift takes hold in September and October as imports spike ahead of the holidays. 2016 is no exception, as the National Retail Federation (NRF) reports increased inbound cargo that it expects to feed a 3.6 percent rise in holiday sales.
- Hanjin Shipping ended September in the throes of bankruptcy, which inevitably meant that October was a time of asset sales and attempting to salvage what little remains of its operation. The beleaguered carrier has been forced to strip away non-essential parts of its operation by the South Korean court handling the case. The company and court will attempt to settle debts and try to find some way to keep the company afloat (pun semi-intended).
- Volume numbers continue to confound America's road freight analysts, as truck tonnage fell 5.8 percent. The numbers reported last month cover September's cargo movements, so there is some scope for October to show the kind of increases we expect to see at this time of year. Nonetheless, along with consistently depressed rail freight numbers, the country's cargo movements are not providing any positive indicators for the wider economy.
- Despite those negative volume shifts, hiring proved to be a bright spot last month. Transportation and warehousing added 7,500 positions to their payroll, which amounts to around 5 percent of October's overall job growth.
- It's that time of year again, as the major names in retail try to balance attractive shipping offers with the reality of delivery costs eating into their profits. Holiday shipping policy is a binary decision at this point -- you either offer free delivery across the board or take a chance on charging and risk losing out to Amazon. Best Buy is opting for the former again this year, while Walmart is focusing on deep product discounts to convince customers. We'll see soon enough which proves to be the best strategy.
- Speaking of free shipping, Amazon Prime membership hit 20% of all US residents in October. CIRP estimates that some 65 million Americans pay the annual fee that entitles them to free two-day shipping and other perks, further underlining Amazon's dominance of online shopping.
- An explosion rocked a FedEx cargo plane late last month, not to mention everyone traveling through Fort Lauderdale-Hollywood International who observed the unexpected (and rare) occurrence.
- It seems as though autonomous vehicles take a step forward in every monthly digest we write. October's was more tasty than most, though, as Uber/Otto teamed up with Anheuser-Busch to make the first beer delivery by self-driving truck. The 120+ miles journey from Fort Collins to Colorado Springs was the first revenue generating load delivered by the new technology