Jay’s Parcel Notes: Nov 14 – Nov 27

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-stock 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. It’s important to understand the market to mitigate costs and improve efficiencies. 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.

According to the National Retail Federation, a record 183.4 million people are planning to shop in-store and online from Thanksgiving Day through Cyber Monday this year. The figure is up from the previous record of 182 million in 2023 and 18.1 million people more than five years ago in 2019.

This year’s holiday peak season is short. As noted by ProShip, there are 17 business days (and 27 calendar days) between the two holidays, which is 3 business days shorter (and 3.5 calendar days shorter) than the average of the past five years.

On to the news….

Retailers

• A surprise from Macy’s this week as it announced it would delay reporting Q3 earnings because of an employee covering up to $154 million in small package delivery expensesover the past three years. According to the Morning Brew, Macy’s had reported $4.36 billion in delivery expenses from Q4 2021 through November 2, meaning 3% of the total now appears to be unaccounted for.
• Meanwhile, Best Buy announced on yesterday’s Q3 earnings call – Scheduled Parcel Delivery which allows customers to select a specific two-hour delivery window up to seven days out. “This provides customers increased convenience, confidence and control of their delivery. It’s currently live in a portion of the US market and we expect it to roll out more broadly next year,” CEO Corie Barry told analysts.
• Walmart reported strong quarterly earnings, but Target struggledwith supply chain costs attributed to the US East/Gulf Coast strike weighing on profits. Target noted that it shifted freight to other ports and the receipts timing from Asian ports attributed to the higher supply chain costs.
• Walmart cut its U.S. net delivery cost per order by 40%in Q3 for the third consecutive quarter, EVP and CFO John David Rainey told analysts during the retailer’s earnings call.

USPS operations at the ZIP code level will handle Amazon deliveries independentlyduring peak, rather than having the packages go through larger area hubs for distribution.

• Canada Post remained on strike and noted that it’s missed out on delivering an estimated 10 million parcels. In a recent statement, Canada Post noted that talks with the union over the weekend resulted in limited progress, with Canada Post trying to “move forward with urgency” on discussing changes to its delivery model. https://www.ctvnews.ca/business/canada-post-strike-update-10-million-parcels-missed-so-far-as-black-friday-approaches-1.7123368

Carriers

• OnTrac reached a deal with lenders that gives it additional liquidity to continue its expansion plans. “This transaction will strengthen our balance sheet and enhance our ability to help current and future customers to provide excellent service to their consumers,” said OnTrac CEO Mike Duffy. “We will continue identifying new opportunities for growth, expanding our geographic reach, investing in technology and automation to improve the customer experience, and completing the transition from a super-regional to a national carrier.”

More from Supply Chain Dive

• Good article from Tom Black at Bloomberg– FedEx and UPS Can Bid Goodbye to a Normal Peak Season

SLB Performance

• New blog post – Strategies to Mitigate and Reduce Ocean Freight Rates (Bet you thought all I did was parcel. 😉 It’s all connected one way or another….)
• As part of our monthly video series, a new one on why FedEx and UPS are willing to reduce rates for some shippers to gain volumes.

That’s it for now. For more, be sure to sign up for our twice a month email newsletter.

Reach out if you’d like to learn how to lower or even possibly eliminate any parcel fees.

Stay tuned for the next Jay’s Parcel Notes on Dec 11. Don’t forget to hit the subscribe button to ensure you receive it in your LinkedIn notices. In addition, if you like what you’re reading, sign up to receive additional insights and analysis via emails twice a month – DM me for more info.

-Jay