E-commerce is on fire and has sped forward 10 years within the last year. There are no signs of it slowing down. In fact, it appears that consumers have changed buying patterns and aren’t going back. Similarly, B2B has seen an increase in drop shipments, and it continues to trend up.
UPS and FedEx have been running at peak capacity since COVID and it hasn’t slowed down. The expectation is that peak capacity will no longer be just at the holidays instead, it will become the normal business operation. Since the Inland Empire is #1 in e-commerce in the U.S., Ontario airport recently surpassed Atlanta in air cargo to take over the #1 spot in the U.S. UPS has a significant hub in Ontario, and FedEx is moving cargo handling from Los Angeles to Ontario. Amazon has a larger footprint in the Inland Empire than anywhere else in the U.S. Clearly, the significant logistics players don’t see these e-commerce trends changing.
E-commerce contributes to the backup at the ports with near-record container volumes in addition to the complications of lower productivity levels. There are 53 ships waiting at the ports, and although the ports expect to get into a better condition by late spring or the summer, it is likely to intersect with preparations for the holiday season. Thus, the ports will stay busy, driving increased activity in drayage, rail and distribution. Are you prepared to run flat out non-stop?
How Should We Prepare?
Assess your current situation and take stock of your supply chain network. Re-think your strategy, and reevaluate your supply chain partners. Will you have priority in the critical aspects of your supply chain? Should you reposition for “where the puck is going” (to use a Wayne Gretzky quote)? It is very likely to be different from your current situation. If you’d like an expert to assess your current supply chain effectiveness and fit with your future customer requirements, contact us for assistance.
Did you like this article? Continue reading on this topic:
The Massive Congestion at the SoCal Ports & Implications