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Top Logistics and Supply Chain Trends that Will Impact Retailers in 2019

Logistics and supply chain operations are becoming more critical to retailers' success. In the year to come, smart retailers will turn challenges into opportunities to stay ahead of the competition. Here's what to watch.


 

Throughout the month of January, 48forty pallet solutions experts have shared insight on topics of interest to our retail customers. For our last blog in this retail-centric series, we’ve scanned the Internet for the biggest trends facing the retail industry in 2019. Here’s what we found—plus suggestions on how to turn challenges into opportunities from a pallet company perspective.

Trend 1: Logistics Labor Costs Will Continue to Rise.

MoneyLast year’s strong economy gave consumers more buying power, however, rising costs associated with the driver shortage created a pain point for retailers. In some parts of the country, labor costs rose by as much as 20 percent – and that’s before taking into account overtime. According to SelectHub, the driver shortage (and labor costs) will continue to grow in 2019 with a projected deficit of 75,000 drivers by the end of the year.

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What can retailers do about it? Look for suppliers like 48forty that employ their drivers. While not immune to rising labor costs, companies with employed drivers are better able to control costs because wages and benefits are a known quantity. Too, pallet suppliers that don’t rely on third-party shippers are immune to demand-related spikes in labor costs.

Trend 2: Consumers’ Expectations for Rapid Deliveries, Low or Now-Cost Shipping Will Grow.

Fast retail deliveryThe popularity of online retailers have reinforced consumer demand for abbreviated delivery times and low or no cost shipping. While we can’t blame our fellow consumers, it does place incredible pressure on retailers, particularly with logistics-related cost and service pressures. In 2019, consumers’ expectations will remain high and are likely to react unfavorably to standard deliveries and increases in shipping prices.

What can retailers do about it? Supply Chain Brief predicts some retailers will increase the practice of shipping directly from distribution centers to consumers, which is effective in lowering shipping costs. This places more pressure on distribution centers to keep merchandise flowing in and out efficiently. Having the right pallet solutions provider can elevate efficiency by assuming the day-to-day responsibilities of pallet management so you can focus on your core business.

Trend 3: Digital Transformation of Freight Will Continue.

Phone with online orderingThe digitization of freight involves taking manual or human-based processes and making them electronic. A perfect example of this is the music industry. Records have been relegated to dust bins or cherished collectibles. Music today is self-serve. Simply go to the Internet and download what you like. While freight can’t be entirely digitized — it is, after all, about delivering physical goods — supporting processes can be digitalized. Removing human-intensive activity, replacing paper with automated processes and adding a self-serve component are all important parts of digitization and will continue in 2019.

What should retailers expect? When done right, the digital transformation of freight and the supply chain should be embraced because of more efficient processes and access to data that can be transformative to operations. 48forty has embraced digitization as we see it as a way to transform our customers’ experience. Today our drivers carry tablets to support e-signatures and digital bills-of lading and proof of delivery; all pallet deliveries and retrievals are digitally documented, archived and the data made available to customers on demand. Additionally, 48forty’s online customer portal, PalTrax™, is available 24/7 for online pallet purchases, retrieval scheduling and access to all types of data.

Trend 4: Younger Buyers Demand for Eco-friendly Products and Packaging Remains Strong.

Sustainable packagingAccording to Supply Chain Brief, younger buyers are increasingly demanding sustainable packaging. As a result, more consumer products companies are investing in new packaging solutions to reflect these consumer values and meet retailers’ sustainability goals.

[Do you know how much pallets affect your overall product costs?  See how making the switch to recycled pallets can give your business a competitive edge here.] 

What can retailers do to amplify sustainable packaging initiatives? One of the easiest things retailers can do is replace new pallets with recycled pallets, which are, hands down, the ultimate sustainable solution in the pallet category. Recycled pallets are used an average of nine times, with repairs made throughout the lifecycle to ensure they meet a retailer’s specifications. Pallets that are no longer usable are reused as mulch or fuel pellets. 48forty also offers retailers total pallet management solutions that include managing the recycling process and/or buying back used pallets.

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These are just a few of the trends retailers face in 2019. If you need help with a custom pallet management solution, give us a call at 1-877-779-8577 or contact us here.

 

Natalya Calleja

Natalya is Director of Marketing & Customer Experience at 48forty. She has over 18 years of industry experience with a strong focus on cross functional sales, marketing, and customer service. Read more about Natalya here.