Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
As shippers work to meet unprecedented demand for holiday delivery this season, on-time performance data for the leading parcel delivery carriers underscore the value of early and extended peak season activity and retailers’ ability to leverage alternate fulfillment methods, industry research shows.
Data from Austin, Texas-based last-mile technology firm Convey show that UPS and FedEx are maintaining performance levels during the surge—thanks to volume limits and other strategies aimed at managing capacity—while the United States Postal Service (USPS) has seen falling on-time performance as it picks up the brunt of the remaining volume. Convey’s Parcel Network Pulse dashboard provides real-time parcel shipment data from its client base and pulls in other industry data, as well as weather, to help retail clients spot fulfillment bottlenecks affecting e-commerce deliveries across the nation.
FedEx and UPS saw only a slight dip in performance from Black Friday through Cyber Week, according to Convey. FedEx delivered 75% of packages on time between November 27 and December 3, down from 76% the week prior. In comparison, in 2019 FedEx dropped from 91% to 76% for the same shopping period. UPS delivered 80% of packages on time November 27 to December 3, down from 82% the week prior. In comparison, in 2019 UPS dropped from 90% to 80% for the same shopping period. Carson Krieg, Convey’s co-founder and director of strategic partnerships, said the stability compared to last year is due in large part to the measures both firms are taking to manage volumes this peak season—especially volume limits, a step he says he’s not seen before.
“We haven’t seen that in the past, [but] we’ve never seen the volumes we’re seeing on the parcel side of the house,” he said, adding that package volume has increased 30% year-over-year in 2020.
In the meantime, the USPS is taking packages that UPS and FedEx won’t and has doubled its e-commerce market share since early October—and has seen a corresponding decrease in on-time performance, Krieg said. USPS grew from 9% of e-commerce parcel shipments the week of October 9 to 20% the week of November 27, according to Convey data. On-time performance dropped to 78% the week of November 27, down from 87% the week prior, and down from 94% the week of October 9.
For shippers, the problem is compounded because alternates to the “big three” carriers also face capacity constraints and can’t take on new business.
“The breaking point is here,” Krieg said, noting that USPS performance had remained solid through October but suffered from a spike in volume from mail-in ballots for the recent Presidential election followed quickly by Black Friday and Cyber Week.
The effects are also being seen in Convey’s “click-to-deliver” metric, or CTD, which measures the time from when a consumer hits purchase to when the item gets delivered. It takes into account both fulfillment and transit time, and Krieg says fulfillment has experienced the biggest jump in recent weeks, increasing 72% from November 10 to December 8.
“This is largely due to the holiday peak surge of packages that are sitting on docks or waiting to be picked up by carriers,” he said.
Consumer expectations are being affected, and retailers’ cries to shop early this year are being followed by early order cut-offs for guaranteed holiday delivery. Other strategies include leveraging curbside pickup and click-and-collect fulfillment options.
“Some retailers have done really well with those strategies this year and are not seeing this [current situation] affect their whole supply chain,” Krieg said, adding that those who rely solely on the big three carriers are “having a tough time right now.”
The outlook calls for much of the same through the end of the year. The National Retail Federation estimates that holiday spending will increase between 3.6% and 5.2% this year, compared with 4% last year, including online sales, which is expected to grow beteeen 20% and 30%. NRF cited a 44% increase in e-commerce orders over the Black Friday/Cyber Monday period alone, compared to last year.
“This perfect storm of volume won’t settle down until after the holidays,” Krieg said.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.