With pumpkin spice season encroaching, many suppliers and retailers are already deep into holiday logistical planning. Will the months ahead bring yet another time of disruption and change across the supply chain?
A new report reveals several converging issues that are causing concern for the holidays. According to a survey of logistical providers from software solution provider DispatchTrack, high fuel costs and inflation are particularly affecting seasonal plans.
Among other insights, the "2022 Last Mile Holiday Perspective" report found that six in 10 logistics pros are worried about inventory shortages and 82% are concerned that they will miss their delivery windows this year, as many did last year following supply chain bottlenecks. An overwhelming 93% expect operating costs, including fuel, to be higher this year.
Accordingly, budgets are top of mind as summer fades. Most respondents (82%) say their biggest concern is fuel costs, followed by inflation (50%) and driver shortages (48%). About a third reported that they are wary of holiday delays that are out of their control.
In this wobbly climate, one in four respondents say they are not sure what to expect in terms of a successful holiday season. There’s a split in financial optimism, with a third anticipating revenue increases and a third foreseeing a decline.
[Read more: "What to Expect for Festive Gatherings in Q4"]
Although worry is a top sentiment, only one in three businesses are gearing up for the holidays earlier than they did last year to get ahead of any challenges. About half of the respondents said that their companies have invested in new technology or expanded existing solution in 2022 and about 40% are planning to rent additional warehouse space or trucks to prevent potential fulfillment roadblocks. Three in four logistics professionals expect to raise their pricing this year to account for higher operating costs.
"Inflation and fuel prices are mounting serious pressure on last mile operators to optimize routes and find new ways to improve efficiencies. Margins have never been this uncertain," said Shailu Satish, DispatchTrack’s co-founder and COO. "It comes as no surprise that this report revealed businesses are making aggressive technology investments to improve last mile efficiencies, especially to reduce miles driven and trucks on the road this holiday season and beyond."