Order Fulfillment in Review: May 2016

May is a month of preparation for the fulfillment business. We're still some way out from our busiest time of year, but getting set for up peak season is top of mind for most providers.  With all the preparation required for the busiest shipping period of the year, it's easy to miss the news and analysis that affect our industry. As we move into June, let's take a second to reflect on the important supply chain stories of last month and what they mean for the industry as a whole.

Order Fulfillment in Review: May 2016

These are the headlines that caught our eye across the world of order fulfillment in May:

• The National Retail Federation kept its optimistic hat on ahead of the summer, as it announced a fall in imports. Despite the dip, the NRF emphasized that goods are still coming into the country in "some of the highest numbers we've ever seen," with the added promise of forecasts that predict a bumper summer for goods arriving into U.S. ports.

• The country's rail and road freight also saw declines reported during May. Looking back at April's tonnage, the American Trucking Association (ATA) confirmed a 2.1% dip, making for a second consecutive month of falling volume. Similarly, the Association of American Railroads  (AAR) said rail freight posted a 10.3% decline in carload traffic for the month of May. Despite the seemingly gloomy news, both associations mentioned the more positive economic climate of Q2 and put some of their volume declines down to a sluggish first quarter and lingering inventory issues in the supply chain.

• As ever, e-commerce was the place to look for positive news last month. Online retailers posted a 15.1% increase in Q1 and achieved a ratio of 11.1% of all retail sales, which marked the most significant penetration of total sales to date. As we also reported in May, several major retailers are re-gearing their supply chains with a focus on improving e-commerce performance.

• An experiment by PayPal Canada could herald the next competitive arena for fulfillment services: free return shipping. While most major retailers have now embraced the offer of free shipping - especially in the wake of the fiercely competitive 2015 holiday season - the same service for returns has been slow to materialize. However, once the genie is out of the bottle it will be hard to put back in... is PayPal the platform to pop the cork for consumers?

• Shipping companies hope to avoid export delays from U.S. ports, as they negotiate with authorities over new container weight regulations. Carriers hope to create standards across key ports that would avoid backlogged container shipments.

• Beauty and cosmetics products caused a big stir on social media, with both Becca/Jaclyn Hill and Pat McGrath reporting surging order levels thanks to successful online marketing campaigns.

• Self-driving cars are never far from the headlines these days, but it could be another automated vehicle that makes the most significant impact on the supply chain. Former Googlers are behind start-up Otto, which aims to bring self-driving trucks to the highways of America in the near future. With so much automation hitting our industry in recent years, it's not hard to see Otto's technology being acquired and implemented by one of the major players before the decade is out.

That's it for another month. Now we can all look ahead to the summer months and the looming challenges presented by another peak season.

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