COVID Effect or Panic Buying? Demand or Supply? How Will the Festive Season Play Out?
Logistics professionals are fully aware of the continuous disruptions since the COVID pandemic swept across the world, but when supply chain news hits the front pages of our international newspapers, all of a sudden, logistics peaks a whole new level of appreciation by end consumers. Empty shelves speak volumes.
In the lead-up to the festive season, retailers far and wide are challenged with getting their goods into stores at the right time, in the right place at the right cost. These are the simplistic metrics used to measure a reliable supply chain.
But there is nothing simple about supply nor demand in COVID times.
Consumer spending this coming festive season is reported with some optimism since vaccination rates continue to increase globally and the return to ‘normality’ post-COVID appears more imminent. Both Thanksgiving and Christmas in 2021 may be a very different event to the previous year.
This festive season may allow for more interaction than the socially distanced/lockdown trend of Christmas 2020. Retailers are looking into scenario planning to analyze what sales may look like for the 2021 holiday season.
How will a family gathering this season compare to the low-key festivities of 2020? Will the cash saved from staying at home during the ‘stay at home’ period be frivolously spent on the main event when families are reunited with their loved ones?
Increasingly poignant as supply challenges continue to evolve may be the impact of empty shelves and supply shortages. Lack of supply could spark panic buying for the latest gifts following the trend we endured in 2020 when multiple goods disappeared from stores across the country.
The media plays a vital role in the perception of the availability of goods. What are they reporting, and how will those reports impact consumer buying behavior? Are inventories at sufficient levels to sustain the panic buying impact? Planning ahead is complex with an unpredictable consumer, yet supply solutions must be provided to ensure the availability of the retail products everyone is expecting under the Christmas tree.
The troublesome supply issues relate not only to the global impact of COVID, such as port closures in Asia, limited supply of containers, air freight capacity as well as port congestion but also a highly reported driver shortage both in Europe and in the United States.
The push and the pull of supply and demand are heavily impacting global retail supply chains; predictability is perhaps a pre-COVID term.
“In Europe, we’re going to see some panic-buying, not just with fuel, as we lead up to this festive period, we’re undoubtedly going to see this also in the US. Trucking capacity is undermined by the driver shortage. From Asia to Europe, rail has been a viable option, but recent disruptions there have stretched transit times beyond 45 days, a far cry from the 17- to 25-day window shippers have been used to”.
As peak season commences and supply chain disruption continues, our retail logistics experts at Crane Worldwide Logistics continue to partner with our clients to provide market information and trends in the logistics market. In addition, we have charter options from China to the United States available on a weekly basis. Around the world, the Crane Worldwide team is working side by side with our clients to provide solutions with a sense of urgency.
As our clients begin to evaluate their supply chain efficiency not just in the current climate but in the long term, we provide a partnership approach to determine the most efficient and effective way forward. If you would like to discuss your challenges and learn more about our capabilities, don’t hesitate to reach out.