In today’s blog, we will take a look at the logistics industry and how it deals with the incredible challenges of delivering packages to customers around the world. With the holiday season in full swing and as frantic shoppers look to purchase last minute gifts before Christmas, the shipping industry is forced to work 24/7 to meet demand. The holidays can make or break the year for many retailers and ecommerce websites, and these businesses depend on shipping companies to ensure their customers are satisfied.
In today’s global economy, logistics companies must be prepared to ship products manufactured in one country to people who could live on the other side of the world. In addition, complicating factors such as bad weather and strained infrastructure make the holiday season a tough test for the industry. In recent years, the logistics industry has made a concerted effort to integrate more technology into their operations, to speed up processes and increase efficiency. Cloud software has been especially useful for logistics companies, allowing many people and computers to remotely upload and download data, which can be vital for processes to function correctly in busy times such as the holidays.
The winter holiday season has a major economic impact on many countries. Looking at the largest Western economies, Christmas spending totals about $450 billion each year. An important trend in holiday shopping has been the increase in ecommerce sales, which obviously necessitates shipping. Ecommerce sales increased by 13.4% in 2015, and in 2016, most expect online sites to gain more of the holiday shopping market share, likely over reaching over 11%.
More online sales are increasing the pressure on the logistics industry, but so far, most major shipping companies are reporting that deliveries are on schedule. Thanks to ecommerce sales, Fedex announced that, “The last four Mondays before Christmas would likely be among the busiest days in the company’s history”. To handle the increased demand, the logistics industry has been expanding, opening new distribution centers and hiring more workers. Overall, the industry is growing rapidly, and is estimated to be worth $2.7 trillion globally. With the continued increases in online ordering expected in the coming years, each holiday season will become bigger and more of a challenge for the logistics industry.