Warehouse Wisdom. Weekly. 11/10/2023

Happy Friday & Veterans Day!

We hope you’re as excited about the online holiday shopping season as those surveyed by Cisco AppDynamics. 59% said they will spend the bulk of their time shipping online, believing they can make their budgets stretch further, get better choices, and avoid last minute shopping troubles by purchasing online. Circana reports that the figure may be as high as 80%! Just make sure you’re ready for this increase in shopping behavior, because 71% also said a bad experience will push them back to brick-and-mortar stores.

This week, we’re covering growing online shopping options, good news in the freight world and not so good news in commercial real estate, a warehouse returns conundrum and more. So get that website cranking, order pickers oiled up, and shipping in line – and let’s jump right into our next weekly roundup!

LOGISTICS VITALS

SALES AND DISCOUNTS ARE RISING

We know what consumers think about the upcoming holiday shopping season, but what about business leaders just like you? According to Fiverr International LTD’s poll of business leaders:

ONLINE MARKETPLACES

MOBILE AND MICHAELS WANT TO BE KING

Keeping up with the pace of change in online commerce is tiring! And Google is at the top of the list of keeping us on our toes. The search giant just announced a slew of new tools for shoppers – this time aimed at holiday bargain hunters. Users can now access Google’s “deals destination”. The results now feature promotions and markdowns. Google also released tools to help identify promotions, view coupon codes, opt in for price drop alerts, and even view price history on products! If you sell on the Google machine, better check out these new selling toys before the holiday rush.

But Google isn’t the only retailer making moves. Watch out Etsy, here comes Michaels! The art and hobby supplies retail behemoth just launched MakerPlace, an online marketplace for sellers. MakerPlace, which launched this month, is not only a place for merchants to sell their handmade products but is also a platform for companies to sell virtual classes and online guides! And as if that wasn’t enough for all of you ‘crafters’, the platform doesn’t charge a listing fee and plans to offer professional sellers a bit of a pricing break over Etsy’s 6.5% transaction fees. If you sell handmade craft products, MakerPlace could be your next hit online. But give it a test before the word spreads to your competition.

And don’t forget to give some love to online mobile sales channels. Mobile is growing to new heights, and thanks to a benchmark survey from 1WordlSync Data, we have a glimpse into how high it’s flying. 87% of shoppers are using their smartphone to research a product while in-store at least some of the time, and 66% of shopper migrate from in-store browsing to online purchasing…Wow! If that’s not enough to convince you to make sure your mobile shopping experience is spot on, here’s some more food for thought. 66% of shoppers purchased an item online in the last 2 months that they only ever bought in-store on previous shopping excursions. Okay, I think we’re convinced now, right?

SHIPPING

USPS AND AMAZON DISRUPTING THE FREIGHT SCENE

Not only are American consumers loving on their smart phone, but they also just keep on spending - and container imports keep rising. In fact, October 2023 was the third best in this regard, up 33% from February and a 3.9% increase from last year. Container imports were even up from pre-Covid timeframes in 2019.

And the freight news just keeps getting better this week. USPS announced a partnership with Amazon, moving the chess pieces to compete further with FedEx and UPS. Now, when you purchase Amazon Buy Shipping labels, you can choose USPS Ground Advantage. This newly created delivery service ensures 2-to-5-day delivery across the continental U.S. By tapping into Amazon’s Buy Shipping label option, sellers can capitalize on the lowest available shipping rates as well!

Every bit of news of lower costs is good news, and diesel prices didn’t disappoint as well. The national average diesel price fell 8.8 cents this last week to settle at $4.366 a gallon, according to Energy Information Administration. Pricing has dropped 17.9 cents over the last two weeks. Even the average price for a gallon of gasoline slipped 7.7 cents to $3.396 in the most recent week. That’s 40 cents less than a gallon cost this time a year ago. Looks like logistics professionals are “winning” both at work and at home.

COMMERCIAL REAL ESTATE

SIGNIFICANT RENT INCREASES BECOMING A THING

But leave it to commercial real estate to break the trend of upbeat reports.

According to CBRE’s U.S. Industrial Q3 2023, third quarter construction fell a whopping 37% quarter over quarter, and 64% annually. And did someone just use the word “significant” when it comes to warehouse rents? Our ears are perked. Prologis just announced that U.S. companies could see a significant rental increase in the coming months. This is a revision from the increased rents projected a few months back. Looks like we have the makings for a warehouse rental crunch! If you’re currently locked into a long-term lease, then don’t panic. But if your lease is coming up soon, it may be time to quickly button up any negotiations to lock in the best rates.

Looks like there’s no reprieve in Canada either, unless you make a run for Calgary. According to Collier’s recent research, the average industrial property rent in Canada is $14.93 per square foot overall, with Vancouver leading the race for highest priced market at $21.84, followed by Toronto at $18.57. Meanwhile, in Calgary, average rents are only $11.89 per square foot. With 333 days of sunshine per year, we can think of a lot of worse places to land!

WAREHOUSE OPERATIONS & SUSTAINABILITY

CUSTOMER RETURNS TAKE A MASSIVE UPSWING

While the sun may be shining in Calgary, the outlook for holiday returns isn’t so bright. There could be a wave of returns, at least according to shipping platform uShip. In their most recent survey, 48% of consumers returned at least one gift last holiday season (21% returned at least 3) and an estimated 40% of consumers say they plan to return at least one gift this year. But that’s not all – 31% of consumers say they are making returns a part of their purchase strategy! These numbers are a bit overwhelming, so be sure your sales game is on point and your return strategies are dialed in, because here comes Santa Clause on a second visit with the returns!

Perhaps a hot topic in logistics can help soften the blow of returns - sustainability. From carbon conscious decisions to the good old, corrugated cardboard box, opportunities abound to win new customers and improve our environment. In fact, surveys have shown that many consumers are willing to pay a premium of up to 20% for products bearing a carbon label. And according to the Corrugated Packaging Alliance (CPA) during their yearly life cycle assessment studies, the corrugated industry has reduced its per-unit greenhouse gas emission for an average US corrugated box by 50% from the period ranging from 2006-2020. By making conscious freight and packaging decision, not only can merchants enhance their reputation as a socially responsible brand, but they can also put more money in their pockets.

WAREHOUSE TECH

UPSKILLING IN DATA MAKES YOUR WAREHOUSE AMAZING

We end the week with a strength and weakness for the warehouse and logistics industry. Three fourths of all supply chain management professionals surveyed in the 2023 MHI Annual Industry Report indicated that they are increasing investment in technology – everything from AI to IoT. The problem? Most respondents indicated that they can’t gobble up enough talent to implement and manage the new technologies. Many companies surveyed indicated that they plan to utilize an upskilling strategy – helping appropriate in-house talent acquire new skills. Whether you’re running the ship and trying to fill talent gaps or you’re a logistics professional trying to help pitch in, it looks like learning the ins and outs to “data” will be the name of the game.

WAREHOUSE QUICK DELIVERIES

GROWTH IN LOGISTICS JOBS SHOWS NO SIGNS OF STOPPING, & MORE…

• Logistics & warehousing is the place to be for future job growth

• Cameras, AI, and machine learning help Intel have E-ray vision; see through packages

• Is AI leading to happier customers? eBay thinks so…

• Shipper Maersk reported revenues down $10 billion, lays off 10,000 employees 

• Congestion overload at Panama Canal sparks a whopping $4 Million bypass price tag

• TikTok is using outsourced logistics companies to offer product delivery through its social network