Patrick Gallagher, CEO, CitySprint, looks at festive supply chain capacity.
In the 27 years I have been working in this sector, supply chain capacity during peak times such as Christmas has been high on the agenda. As the economy has started to pick up and e-commerce has emerged as a powerful industry force, this issue has become even more acute.
Deloitte forecasted that online shopping will account for 13% of December sales this year, and estimated that online sales now account for 50% of growth in the Christmas retail market. Even if we allow for increasing numbers of click-and-collect orders, the volume of goods delivered will rocket. Keeping pace with this growth will be the logistics industry’s primary challenge in the coming years.
For example, parcel hold times at click-and-collect points are three days on average. During Christmas, this could lead to long waiting periods for clients collecting parcels and put a real strain on the collection point’s real estate.
There is not sufficient room for manoeuvre in most supply chains, meaning that one cold spell close to Christmas could be a disaster. It is both the responsibility of retailers and distributors to address this.
Building a sustainable supply chain requires retailers to engage more directly with logistics companies and integrate delivery as a core part of their strategy. Retailers’ reputations are tied to their delivery record and consumers can be quick to publicise and slow to forget failings.
The answer to mitigating fleet capacity problems is getting smarter about delivery and capacity.
This means ensuring that fleets are bolstered to deal with busier periods, as CitySprint has done by implementing a recruitment drive ahead of Christmas. In addition, delivery options are still too focused on the schedule of retailers and distributors, with consumers fitting around the capabilities of the retailers’ distribution partners.
Time-flexible delivery options for consumers should become the norm. After all, festive shop fronts and marketing campaigns will seem extremely trivial if customers are left without presents under their trees.