Christmas will test supply chains

An executive at one of the UK’s largest multi-modal logistics platforms has warned that a surge in online demand for goods this Christmas as a result of the pandemic will test supply chains to the limit in the lead up to the festive period.

Chris Mills, director of account management, transportation at CH Robinson Europe, is urging suppliers and manufacturers to build more resilience into their supply chains so they don’t buckle under the pressure. His call comes on the back of a warning by IMRG, the industry body for online retail, that excessive last-minute online purchases could prove problematic.

Online sales in the first months of 2020 were roughly 5 per cent higher than last year. Since the onset of Covid-19 these numbers have grown exponentially, with growth rates of around 40-50 per cent according to IMRG, and these have been sustained during the crisis.

Mills said: “Suppliers, manufacturers and retailers have to be prepared for a huge surge in online purchases and for the potential for them to be concentrated in a small-time frame. Online has increasingly become the convenient way to shop during the pandemic and with increasing lockdowns across the country together with heightened demand for goods at this time of the year, supply chains are going to come under levels of pressure never experienced before.

“Events such as Black Friday and Cyber Monday will only add to the significant increase in online sales. Indeed, shopping online is expected to be up by 14 per cent year-on-year for the large-scale e-commerce sale. Research amongst Black Friday shoppers has shown that over half will do all their shopping online this Christmas. This means the delivery experience will be up there with the overall shopping experience, and therefore supply chains will determine whether it’s a good or bad festive period for FMCG brands.

“This isn’t going to be just the year that online shopping grew to record breaking levels. It’s going to be the year when real time data insights came of age. Indeed, experts predict that this year’s festive period will be like shopping online on Black Friday every day.”

Recently, CH Robinson formed an alliance with the Microsoft Corporation to combine its Navisphere multi-modal transportation management platform with the multinational technology company’s Azure cloud platform and Internet of Things.

Added Mills: “Such collaborations, as ours with Microsoft, will be critical to adapting to the new normal created by the coronavirus, such as abnormal strains placed on supply chains caused by major surges in online demand for goods. The solution we can now deliver as part of the alliance has already attracted significant interest from the markets we serve as companies ramp up their supply chains to deal with the unpredictable.”