During a season of reduced overall spending, FourKites platform data indicates that consumers are stocking up on essentials. As you might expect small packages, home delivery final mile and curbside pickup will keep shippers, carriers and retailers busy through the holidays.
Last year, FourKites platform data showed a surge in small shipments (“less than load,” or LTL, and parcel) of F&B (25%), retail (25%) and CPG (38%) products in the two weeks leading up to Thanksgiving and the two weeks leading up to Christmas. That makes sense intuitively, as people typically stock up on essential provisions heading into the November holiday and continue through New Year’s. In addition, shippers are replenishing orders with available safety stock to hit on-shelf availability goals.
We are already seeing a similar trend during this holiday season based on pre-Thanksgiving shipment data, but at an even greater scale.
These assumptions are grounded in the shifts we saw last year and current data patterns in the FourKites platform. We will continue to keep a close eye on these metrics to evaluate the continued impact of COVID on our supply chains.
Specifically with regard to LTL and parcel shipment growth, we anticipate Retail and F&B shipments to be 59% and 28% higher, respectively, than their pre-holiday growth of 58% and 45% in 2019.
This growth is likely to be driven by:
We are also seeing indications that the industry’s trend toward improved on-time, in full (OTIF) performance will continue, even as LTL and parcel shipments increase, as corroborated in our recent Amazon Prime Day analysis. Specifically, we anticipate OTIF performance to improve by 4-5% during the 2020 holiday season.
Improved OTIF performance reflects a supply chain that is better prepared in multiple regards after months of adjusting to pandemic-related disruptions. For instance, manufacturers have spent millions to increase production of popular F&B and CPG products, and retailers are more prepared for possible panic buying. Moreover, shippers, carriers and retailers are making better use of technology to collaborate in making goods flow more efficiently and reliably. Still, there are many factors that are outside of shippers hands these days – among them low inventory, COVID concerns, a tight freight market, and more – all of which can have a serious impact on OTIF performance.
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Bottom line: Even as consumers tighten their purse strings overall, demand for home delivery and curbside pickup of provisions is still increasing. And despite shippers, carriers and retailers being even busier even than last holiday, FourKites models indicate the supply chain appears equipped to deliver — on time and in full.
