5 Key Trends to Watch this Holiday Shipping Season

 The year-end holiday season is upon us, and it looks like dwindling capacity, parcel surcharges, and an unwavering boom in e-commerce will have significant impacts on the transportation environment through 2020 and into 2021. And while consumer spending will drive much of the activity on the B2C side of the equation, B2B shippers will also feel the effect of these top transportation trends.

Here are five to keep an eye on as we move further into the holiday shipping season:

1. Capacity is tight, and getting even tighter. FedEx and UPS have already told some of their largest shippers that most of their capacity is already spoken for, and that any extra trailers with holiday orders will have to wait to be picked up, according to shipping consultants and retailers. “There will be days within the holiday season where the industry will be over capacity,” FedEx’s Brie Carere told WSJ. The outlook has sent retailers on the hunt for alternatives with little luck. Smaller carriers said they “booked up their capacity for the holidays months earlier than usual and aren’t taking new customers until next year,” WSJ adds.
2. Consumer confidence bounced back. The National Retail Federation’s (NRF) preliminary reports say that consumer spending has recovered from the coronavirus pandemic more quickly than expected. “The recession appears to be behind us and the reopening of the economy over the past several months has created momentum that should carry through the fourth quarter,” NRF predicts. Retail spending and housing have both recovered; employment growth is slowing but remains positive; and consumers have saved a portion of their stimulus checks and unemployment benefits. “Consumer confidence remains below pre-pandemic levels but is improving,” it points out, “with households upbeat about both current conditions and future expectations.” With more consumers shopping from home right now, these positive outlooks could translate into tighter transportation capacity over the next couple of months.
3. The shopping season will be longer than usual. The peak five-day shopping period from Thanksgiving to Cyber Monday has evolved over the past several years with concentrated spending shifting away from traditional Black Friday doorbusters to early openings on Thanksgiving Day and increased online sales on Cyber Monday. “This year will mark the most dramatic change to the shopping timeline and extension of the holiday sales season,” CBRE points out, noting that many retailers and mall owners will not open on Thanksgiving Day this year so employees can spend the holiday with their families. Additionally, they will modify Black Friday promotions and hours of operation. “The safety and convenience of shoppers and employees are the top priority,” CBRE explains, “but retailers and mall owners must make up for these lost sales opportunities by lengthening the holiday shopping season.”
4. Big e-tailers are paying higher freight bills too. If you’ve been paying higher transportation bills this year, you’re in good company. In fact, even the company that raised the bar on same-day/next-day shipping standards is feeling the pinch. MarketWatch reports that Amazon’s shipping costs increased by more than $5 billion during the third quarter. This uptick aligns with the company’s sales, which reached record numbers during the third quarter. “Amazon had record sales in the third quarter, but the e-commerce giant also saw its shipping costs jump 57% year-over-year, reaching an eye-popping $15.06 billion for the period, up from $9.61 billion last year,” MarketWatch reports. “Amazon has benefited from the shift to e-commerce during COVID-19, with quarterly sales totaling $96.15 billion, even without the inclusion of the Prime Day event.”
5. Expect the unexpected. With carriers dealing with high demand on one side and a persistent global pandemic on the other, shipping delays are going to be inevitable. Other factors may come into play as the season begins to take shape. According to Business Insider, the forecast for this year’s holiday shopping season reflects the long-lasting impact of the pandemic. “Shipping and retail industries have been under immense strain since March, when stores shut down and customers began shopping online in droves,” it says. “As the holidays draw nearer, and issues like shipping capacity and low inventory don’t seem to be going away, it’s safe to say this year’s holiday shopping season will likely look very different from years’ past.”A Platform to Help You Navigate the Holiday Uncertainty

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