A blog on issues affecting Australia's newsagents, media and small business generally.

Small business retail advice: the logistics bottleneck, Christmas orders and having stock through January.

In this post I share advice provided to newsXpress members a week ago about logistics challenges and what steps to take not to ensure supply.

The situation.

There is no one single cause to the delays. Most imported products are arriving late. Import facilities are overwhelmed. Import distribution centres are overwhelmed. This is a significant pressure point and a place where packages do go missing. What used to be a two-day turnaround can be anything from five-days to four-weeks here.

From these centres, parcels are trucked to state based distribution centres. This is the second most significant pressure point, and another place where parcels go missing. The turnaround at this point has gone from two-days to, often, ten-days.

Once a parcel leaves a state based DC, it is on board for delivery. Now, depending on the courier company, this is where it can get interesting as on-board for delivery used to mean the parcel was on a truck and on its way to you, usually that day. In this current constipated situation, a parcel can be on-board for two weeks, sometimes more. It can switch trucks and even be warehoused somewhere while overloaded and overloaded trucks move parcels around. This is another pressure point.

Every time a parcel is touched puts it at risk. Today, parcel handling is up four and five times what it used to be. This is resulting in more mistakes, more losses. This dramatic increase in multiple handling is making the situation worse. It is another pressure point.

What confuses the understanding is when a parcel comes through quickly, like it used to a couple of years ago.

The situation is made even more complex with pallet shortages, more truck breakdowns as a result or working longer hours and support systems that are themselves overloaded with calls and emails – where’s my parcel?

What suppliers are doing.

Some suppliers are air-freighting stock in to get around the shipping bottleneck, which is worse than the trucking challenges noted above. Some suppliers have edited their 2022 plans, reducing range for fear that some seasonal inventory will not arrive on time. Some suppliers have brought forward their own orders to provide inventory certainty, which is further clogging inbound logistics.

Some are communicating well. Others are not.

Most suppliers do not run their own warehouse or logistics operation. They are reliant on third parties to do this, including reliant on their management decisions and communication, which is often left wanting.

Planning into 2022.

We expect the situation to remain as it is today until at least mid January: severely congested, slow, challenged, frustrating. That is what we are planning for at least. We don’t want it to run another two months. but, we think it is best to plan that this will be the case.

Monday this week we asked all preferred suppliers for an update from them on cut-off dates for Christmas orders as well as their view on supply through to January.

I don’t have time to edit every response for you here. Sorry.

The overall messages are:

  • Inventory levels are low for some suppliers, because of surge orders from businesses that have recently come out of lockdown.
  • Order ASAP for what you need six weeks from now.
  • Order by Friday this week for anything you want by the end of this year.
  • Order by the end of this month for anything you think you will need in January.
  • Fewer orders are better. If you used to do plenty of small orders. Try and reduce order quantity into bigger orders.
  • Some suppliers are closing for Christmas as early as from December 15.

So, right now, we think you need to have all your orders in for December, January, Valentines Day, Back to School, Back to Work and even into Easter so you have a plan for coming out of Valentine’s Day.

Do not put off acting.

Planning for the first few months of 2022 cannot be put off. If you do put it off, you will be disappointed and we will be unlikely able to help.

Footnote: On top of everything covered above, for states outside the main logistics hub areas of Melbourne, Sydney and Brisbane, add the usual distance delays multiplied by two or three. Sorry, but for you it will be worse than the worse it has been.

Management tip

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