Massive disruptions in supply and demand patterns created a roller coaster ride for transportation logistics in 2020 and 2021. A snapshot of a year’s worth of FourKites’ platform data suggests we may finally be returning to pre-pandemic norms.
It’s been more than a year since the global pandemic struck, turning the world, and our complex and interconnected global supply chains, topsy-turvy in virtually every respect. We took a look back through FourKites’ platform data — from January 2020 right up through March 2021 — to get a birds-eye view of how the pandemic impacted over-the-road transportation over the course of five full calendar quarters.
At a high level, the data illustrates how disruptions in goods and raw materials, as well as a pronounced shift in consumer buying behavior toward ecommerce, drove a months-long trend toward a higher percentage of smaller shipments — specifically LTL (short for “less than a truckload”) shipments and individual parcels. A corresponding impact: a huge increase in the average number of stops that were made to get goods to their final destinations.
This all occurred, as we documented earlier this year, in the context of a steady climb of 22% in the total number of shipments that began in May of last year and peaked in November before levelling off.
Small Shipments Increase Across Industries As Consumers Shift Buying Habits
For retailers, the percentage of LTL shipments jumped from 7% in January 2020 to 16% the very next month. That percentage has remained in the double digits ever since, peaking again at 16% last August. As of the close of March 2021, LTL shipments remain at 15% of total loads.
CPG companies experienced a similar, but more pronounced shift, owing to a more significant push on direct-to-consumer channels compared to traditional retailers. The percentage of parcel shipments shot up into the 20s beginning in April, peaked at 25% in November and remained at 24% at the end of March 2021.
Similarly, the percentage of LTL shipments increased in the CPG industry, peaking at 51% in March and remaining in the high 30s to lower 40s throughout the year. LTL shipments comprised 42% of total shipments in March 2021.
The picture for Manufacturing companies differed. The percentage of parcel contributions peaked during April and May 2020 at 20%, when total Manufacturing shipments were at their lowest. These trends are specifically correlated with labor issues related to COVID, when sites had to shut down or reduce staff to create a safe work environment, impacting their ability to ship the same amount of freight. Those numbers have since rebounded to more normal levels, with TL shipments at 33% and LTL at 52% of total manufacturing shipments in March 2021.
Stop Counts Spike During Peak COVID Months
A related effect of more LTL and parcel shipments was an incremental increase in the number of delivery and pickup stops. New fulfillment hubs contributed to this phenomenon, as suppliers looked to expand their ability to fill orders. By August of 2020, the number of pickup and delivery stops had climbed 77% compared to January levels. Those numbers have since returned to historic norms, stabilizing at 36% more stops as of February 2021 compared to what we saw in January 2020.
Below, we’ve illustrated how the jump in the percentage of parcel and LTL shipments for the CPG industry correlated with the highest percentage increase in the number of stops per shipment. For CPG shipments, stop count increased, on average, 55% from January 2020, surpassing the 37% average increase for all other industries.
In the last few months, we observe that stop count trends are now returning to historic norms across all industries.
Similarly, stop count for parcel shipments grew significantly through 2020, peaking at a 265% increase in the number of stops compared to January. Changes in stop count for LTL shipments were more stable compared to parcel shipments, but still grew by 96% by August.
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It goes without saying that the pandemic is not yet behind us, and we now find ourselves in a world of more frequent and costly disruptions (as the recent blockage of the Suez Canal painfully illustrates). Disruptions have always been a constant in supply chain operations. How ready is your operation to handle these shifts proactively and minimize the effect on your operations and people?
We will continue to monitor the data and share our findings and insights with the community. Please continue to track our Trends & Insights for the latest supply chain analysis.