I’m Jay Kent, managing director of SLB Performance, a consulting firm that helps companies reduce supply chain costs, implement BI tools, and improve in-stocks and customer service. After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals. To mitigate costs and improve efficiencies, it’s important to understand the market. So twice a month, I’ll share parcel news and thoughts. Be sure to hit the subscribe button to receive the latest newsletter in your LinkedIn notifications.
Holiday surcharge announcements have been announced by FedEx, UPS and OnTrac so far, but the USPS announced that it would not implement holiday surcharges. Instead, it will offer “increased predictability in pricing for customers. There will be no additional fees for residential area delivery, for Saturday delivery, or for minimum volumes. Instead, USPS will continue to be the most affordable way to mail and ship this holiday season.”
The USPS also announced that because of its initiatives to convert over 150,000 workers into career positions since Oct 2020, it anticipates only adding 10,000 seasonal employees.
However, Amazon plans to hire 250,000 employees across the United States for the upcoming holiday season. This is a big increase from the 150,000 individuals they hired in 2022.
As for holiday surcharges, Amazon will charge its holiday peak fulfillment fee for FBA sellers from Oct 15 to Jan 14. The amount of the fee will remain the same as in 2022 and is meant to cover increased fulfillment and transportation operating costs during the busy holiday season, according to its post on Seller Central.
Holiday Outlook
Consulting firm AlixPartners is projecting a 3% to 6% increase in sales this holiday season, down from last year’s 6.6% growth. higher interest rates and higher debt levels will pressure holiday spending this season. found that 26% plan to spend less compared to last year, with 38% of households earning under $45K planning to spend less.
“Once again, we are going to see the Dickens classic—A Tale of Two Cities,” said Bryan Eshelman, Americas leader of the retail practice at AlixPartners.“Higher-income consumers may not be in the best of times, but we see them sustaining their spending through the holidays. However, most other consumers, including lower-income ones, will make retailers feel like this holiday is the worst of times.”
Consulting firm Bain, meanwhile, is forecasting 3% nominal growth in US retail sales this holiday. One of its recommendations is for retailers to get an early start – shopping will start earlier, and customers could run out of budget.
Yes, shopping will likely begin early starting with Amazon’s second Prime Days announced for Oct 10-11.
That’s it for now. Comments are always welcome. Let me know what I missed. Stay tuned for the next newsletter on Oct 4, and don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices.
– Jay