Carriers specializing in online shipping, such as FedEx, UPS and the US. Postal Service, have racked up big gains this holiday season while railroads, truckers and ocean carriers have suffered a 15 percent sales decline this fall, a trend credited to the shift to online ordering, according to The Wall Street Journal.
Physical retailers are sitting on near record-high inventories as consumer spending hasn’t yet caught up with hopes of a surge stoked by low gasoline prices. They are also employing new methods of inventory management for the holidays, including shipping items sold online from some stores and stocking fewer goods in others as they attempt to better predict rapidly shifting consumer demand, resulting in more packages.
The Cass Freight Index report, which tracks North American freight shipping volumes, fell 1.5 percent in September from the year earlier, and is below September readings going back to 2011. It fell 5.3 percent year-over-year in October.
Railroads experienced lower growth in container and trailer volumes in the third quarter, and that segment fell 1.4 percent in October. Trucking companies reported excess capacity, and the global ocean freight market grew only 1 percent in the third quarter, said ocean shipping giant A.P. Møller-Mærsk A/S.
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Editors Insight: Most holiday shopping is for non-food, but the more consumers get into the habit of shopping online, the more they will be inclined to buy online for all purchases, including food.
The food segment has been slower than other retail sectors to expand into e-commerce, but the pace of change is accelerating.
One-quarter of global respondents to a recent Nielsen survey of e-commerce consumers are already ordering grocery products online for home delivery, according to a September Food Logistics cover story. More than half (55 percent) of consumers are willing to use it in the future. The research points to an omni-channel f&b retail environment rather than a replacement of the existing brick and mortar option.
Meanwhile, many supermarket chains are investing a lot of resources in digital marketing initiatives to improve customer satisfaction and strengthen customer loyalty. Such investments will facilitate the growth of e-commerce in the food retail sector. 11-23-15 By Elliot Mara
