• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Blogs » Think Tank » Riding the Peaks and Valleys of Retail Demand

Think Tank
Think Tank RSS FeedRSS

Logistics / Logistics Outsourcing / LTL/Truckload Services / Ocean Transportation / Rail & Intermodal / Reverse Logistics / Transportation & Distribution / Sales & Operations Planning / Forecasting & Demand Planning / Inventory Planning/ Optimization / Supply Chain Finance & Revenue Management / Transportation Management / Supply Chain Planning & Optimization / Supply Chain Visibility / Consumer Packaged Goods / Food & Beverage / Retail

Riding the Peaks and Valleys of Retail Demand

November 11, 2013
Robert J. Bowman, SupplyChainBrain

The peak shipping season, of course, comes much earlier. Retailers need to stock up on holiday merchandise many months in advance. But the precise moment when inventories begin to flow into stores and distribution centers has changed markedly over the years. 

Imports from Asia used to begin hitting U.S. shores in early summer, with volumes peaking in August. The goods would then be housed in warehouses for months. Last-minute orders were brought in by air, at substantial cost. A sharp rise in real-estate values, along with a desire by merchandisers to get excess inventory off their books, changed all that.

Now, goods might still be flowing into the country by ship as late as October, as retailers tweak orders in line with projections of consumer activity during the holiday season. (This year, the signs look good: the National Retail Federation predicts that 2013 holiday sales will rise 3.9 percent over last year, to $602.1bn.)

New information technology has allowed companies to do a better job of planning for actual holiday demand. As a result, they can keep a lid on inventory levels while starting their shipping earlier, says Robby Nathan, chief executive officer of Load Delivered Logistics, LLC.

Nathan says merchandisers and carriers have been planning more effectively since Hurricane Katrina devastated the Gulf Coast in 2005. "The past five years have seen better optimization trends across the board."

The result this season has been a tightening of capacity, by carriers looking to keep rates up and excess space down. The scenario is especially evident in intermodal services across North America, says Nathan.

In many instances, shipping lines are discouraging the movement of ocean containers into the U.S. interior. They prefer to turn boxes around at the coast, then get them back to Asia as quickly as possible for another lucrative load of imported consumer goods. They're charging higher rates for ocean containers with destinations such as Chicago, prompting shippers to transload their import goods at the port into larger domestic containers or trailers.

The average length of haul is declining, notes Nathan. One reason is the placement of a growing number of regional distribution centers serving the big-box stores. A shipment that used to travel up to 2,000 miles from the port of entry is now moving 300 miles or less, he says. And inbound materials are coming from all directions, not just the West Coast.

The re-shoring of some manufacturing from China to North America has also had an impact on freight traffic patterns. "We're seeing a tremendous focus on the ability of carriers to transport goods from Mexico to the U.S., and raw materials and commodities down to Mexico," says Nathan. "That supply chain is becoming a more integral part of the flow of transportation and goods."

You might think that shorter hauls would mean fewer competitive opportunities for intermodal transport, which makes the most economic sense on the longest corridors. But intermodal is thriving. Thanks to heavy investment by railroads in their North American infrastructure, just about any container moving more than 600 miles is now a candidate for intermodal.

According to the Intermodal Association of North America (IANA), total intermodal traffic grew 4.7 percent in the third quarter of 2013. Leading the charge were domestic-container volumes, up 9.4 percent versus the same period of 2012, while trailer volume rose 1.2 percent. (That's the first time that domestic shipments have exceeded international, IANA reports.) The numbers support the notion that shippers are making greater use of domestic equipment.

Service, of course, is a major reason for the success of intermodal. "The railroads have cleaned up their act tremendously," says Nathan. Service reliability has increased steadily over the past four years, as intermodal providers have equipped themselves with more sophisticated I.T. tools.

Load Delivered believes so strongly in intermodal today that Nathan is helping to fund an intermodal information exchange to bring together the three main components of rail service: the big Class I carriers, short lines and drayage providers.

Advances in I.T. over the last decade include state-of-the-art warehouse management and transportation management systems. "We're seeing these technologies play a larger role," says Nathan, "especially in the Fortune 500 flow of supply chains." At the same time, companies are just beginning to embrace "big data" as a means of structuring a wealth of information, and foreseeing consumption trends.

The most desired bit of intelligence, is, of course, what the customer is going to buy. Retailers are desperate to spot sudden shifts in demand, as well as the areas that promise the biggest opportunities for growth.

Halloween, for one, has become a massive holiday for merchandisers over the last few years. (And for Load Delivered. It's a leading food and beverage handler, specializing in temperature-controlled candy.) According to NRF, Halloween sales ballooned from $3.29bn in 2005 to $8bn in 2012. This year saw a reversal for the first time since 2009, with sales estimated at just under $7bn. NRF blamed the decline on higher payroll taxes, a still-weak economy and tepid job growth.

By any measure, merchandisers and logistics service providers are sharpening their ability to withstand the peaks and valleys of retail demand. "They say that knowledge is power," says Nathan. "Information is really a driver of everything."

Next: What about trucks?

Comment on This Article

Keywords: supply chain, supply chain management, retail supply chain, intermodal transportation, supply chain planning, logistics management, logistics services, transportation services, inventory management, supply chain management: retail

RELATED CONTENT

RELATED VIDEOS

Wake up to live
“Supply Chains in Crisis”
updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • 0620_NFT.png

    Can NFTs Be an Effective Tool for Supply Chain Visibility?

    Technology
  • The Craft Beer Boom: How to Satisfy Changing Consumer Tastes

    Shortages of Beer, Popcorn Join Supply Chain Crisis

    Global Supply Chain Management
  • FedEx

    FedEx Faces Big Changes as New Boss Confronts Higher Costs, Angry Contractors

    Last Mile Delivery
  • 0621_Burrito.png

    Chipotle Zeroes in on Supply Chain Traceability and Visibility

    Sourcing/Procurement/SRM
  • cyber crime

    The Cyber Blind Spot That Makes Every Supply Chain Vulnerable

    Regulation & Compliance

Digital Edition

Scb may 2022 sm

2022 Supply Chain ESG Guide

VIEW THE LATEST ISSUE

Case Studies

  • 3PL Doubles Productivity With Robots to Fulfill Medical Supply Orders

  • E-Commerce Company Cuts Order Fulfillment Time by 40%

  • Fashion Retailer Halves Fulfillment Time With Omichannel Automation

  • Distributor Scales Business by Integrating Warehouse Automaton Software

  • Fast-Growing Fashion Brand Scales E-Commerce Fulfillment With Whiplash

Visit Our Sponsors

Yang Ming Alithya Barcoding
Blue Yonder BNSF Logistics Generix
GEP GreyOrange Here
Honeywell Intelligrated IFM Inmar
Keelvar Kinaxis Korber
Liberty SBF Locus Robotics Logility
Lucas Systems Nvidia Old Dominion
ORTEC Parsyl QIMA
Redwood Logistics Saddle Creek Logistics Schneider Dedicated
Setlog Holding AG Ship4WD Shipwell
Tecsys TGW Systems Thomson Reuters
Tive Trailer Bridge Vecna Robotics
Verity
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2022 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing