Looking ahead: 2022 holiday logistics predictions

Since 2020, the global logistics industry has seemingly gone off the rails. Between a global pandemic, a ship getting stuck in the Panama Canal, unprecedented spikes in demand leading to a global snafu of shipping containers, historically long queues of ships waiting to berth in ports around the world, war, and rising inflation; it almost beggars belief that all of this has occurred in just two short years. Yet with all that has happened, life still goes on, and the wheels of logistics continue to turn.

That said, it’s time to take a look at what’s on the horizon for logistics and the global supply chain. With the holidays being one of the busiest times of the year, it’s worth taking a moment to consider what challenges shippers will be faced with before it’s crunch time. Given the current state of the world, here are a few of our predictions for the end-of-year holiday rush looming on the horizon.

A softening of consumer demand

Both 2020 and 2021 saw record-breaking levels of consumer demand brought about by the pandemic and subsequent lockdowns. Holiday sales at the end of last year reached $ 886.7 billion, earmarking a growth of 14.1 per cent from the previous high.

As concerns over global inflation rise, however, consumer demand is already beginning to soften as the world contends with higher fuel costs brought about by Western sanctions against Russia for the ongoing conflict in Ukraine. While there are some signs of inflation beginning to correct itself, it could be some time yet before general consumer costs return to normal.

A continued uptick in e-commerce and omnichannel strategies

Consumer shopping habits were irrevocably altered due to Covid as shoppers have come to embrace digital shopping methods over in-store purchases. Many retailers have embraced omnichannel strategies to cope, but that might not be enough to buffer against big-box competitors with more overhead to invest in providing more delivery options to consumers.

While consumers haven’t opted out of physically shopping altogether we will continue to see a hybrid of in-store, online, and click & collect, as consumers begin their holiday shopping. According to a recent survey from McKinsey, approximately 75 per cent of respondents said they prefer omnichannel shopping.

More online shopping means continued supply-chain strain

While it has eased somewhat, the global supply chain is still a mess from the initial lockdown. Unfortunately, this could continue to affect shipping through this year’s holiday season. The question is, will shoppers wait for inflation to soften, or will they spread out their holiday shopping? How shippers choose to answer that question could have an impact on their forecasting for the rest of the year.

Various shortages will continue to be an issue

Labor gaps across various sectors, not the least of which in warehouses, trucking, and manufacturing, could lead to continued shortages of various goods while affecting the speed at which goods will actually move through the supply chain.

Supplied.

The semiconductor shortage that has been wreaking havoc on the automotive and consumer electronics industries is expected to continue until 2024.

Russia’s continued war with Ukraine is causing a shortage of a number of various consumable goods, not the least of which is wheat as Russia is the world’s leading exporter of flour and other wheat products, accounting for 17 per cent of the global supply and distribution.

There are a significant number of variables that could affect the remainder of this year. Given how the past few years have gone, it’s almost impossible to know with any degree of certainty what the future will hold, especially as the global supply chain is still struggling to regain equilibrium.

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