UPS temporarily suspending the pickup of some shipments is just the tip of the iceberg
Dec 9, 2020
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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For the past four months, our Two Minute Warnings have been addressing the fact that CODE RED conditions in the transportation marketplace will make the fourth quarter and 2021 very challenging for shippers.
Some shippers took notice and adjusted their plans accordingly; others shippers may have been so busy that they basically ignored the warning and are now struggling.
I bring this up because of last week's announcement that UPS had temporarily suspended picking up shipments for six large retailers (Gap, Nike, Macy’s, L.L. Bean, Hot Topic and Newegg) since they had exceeded their volume quota. UPS justified their actions by stating that they need to maintain the reliability of their network for the rest of their customers, so these temporary restrictions on pickups are being dealt without exceptions.
None of this should have caught shippers by surprise. After all, in the CODE RED webinars held by TranzAct, NASSTRAC and CSCMP, noted parcel expert Jerry Hempstead highlighted the fact that with both UPS, FedEx and many of the other regional parcel carriers operating at, or even beyond 100% capacity, something has to give. And with news of UPS's actions, shippers got a clarion call that the CODE RED conditions are real and creating major supply chain and transportation issues.
Some shippers may want to believe that the parcel carriers are the only ones struggling to handle the volume. After all, we have just experienced a record-breaking year for online holiday sales. According to Adobe Analytics, online sales for Black Friday were up $9 billion or 22% from 2019. A few days later, Cyber Monday then brought in $11 billion in sales, up 15% from last year. Combined this is a strong showing for 2020. And all the experts expect this to continue on into 2021.
But it's important to point out that with virtually every major transportation sector experiencing very tight capacity, shippers could see their freight budgets explode.
And that is why it is so important to know the market. In order to help you do just that, we are inviting you and your team to join us for Part III in our TranzAct, NASSTRAC and CSCMP CODE RED webinar series. On December 15 at 11am Central, you're going to hear from experts that will help you understand what is happening in the ocean, air and truckload sectors. And having just gotten off the phone with our resources, trust me, they have some very valuable perspectives you aren't going to get anywhere else.
Register for the webinar to hear insights and advice from our panel:
- Peter Tirschwell, Vice President at IHS Markit
- Lori Fellmer, Vice President of Logistics and Carrier Management at BassTech International
- Brent Hutto, Chief Relationship Officer at Truckstop.com
- John Janson, Director of Global Supply Chain at SanMar
This is the third webinar in a three part series, and if you’re interested in hearing the first two, you can find them here.