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Christmas delivery volumes: the ‘tsunami effect’

Christmas delivery volumes: the ‘tsunami effect’
Sunday February 1 2015

Figures from the latest IMRG MetaPack UK Delivery Index reveal that parcel volumes performed as expected both for 2014 as a whole and over Christmas – despite a ‘tsunami effect’ on demand caused by exceptional sales activity over the Black Friday weekend.

Parcel volumes ended 2014 at 16% cumulative year-on-year growth, with December up 28% on November and 11.6% up on December 2013 – in line with forecast. IMRG and MetaPack estimate that the final volume of parcels dispatched by UK retailers through UK carriers in 2014 was 920 million.

The strong December growth is in contrast to the December sales performance (5%) recorded in the IMRG Capgemini e-Retail Sales Index – the reason for this is that Black Friday (when the orders were placed) actually fell on 28 November, while the associated dispatches were sent in December (after the weekend).

The result created an e-retail delivery ‘tsunami’ with a fall in volume either side of an exceptional spike in demand over the Black Friday (28 November) to Cyber Monday (1 December) weekend. The delivery peak in previous years has tended to occur on the week after Cyber Monday.

The unprecedented demand seen over that weekend was on top of parcel delivery volumes that were already 70% above that of a typical month

Overall December still accounted for the usual 13% of the UK’s annual volume but the compression of so many orders into such a short space of time overwhelmed some retailer and carrier operations, with the result that ‘on time’ delivery performance fell from a record November high of 93% to a record December low of 85.2%.

Despite serious concerns in the run-up to Christmas caused by this surge in demand, the Index confirms that nearly all online orders were delivered in time for Christmas. The exception were the parcels within the depots of City Link – which slipped into insolvency on Christmas Eve.

Andrew Starkey, Head of e-Logistics at IMRG, comments: “The concentration of demand over the super sales weekend caused a spike in orders on top of already record volumes for the Christmas shopping period. Some retailers could not pick and pack orders fast enough and the change in the demand pattern temporarily overwhelmed some collection and sortation operations. However, after a short disruption in service levels the industry responded heroically and brought Christmas in on time.”

Angela O’Connell, Marketing and Strategy Director, MetaPack said: “The industry experienced unprecedented pressures at the beginning of December due to surges in demand across Black Friday weekend which heavily impacted both retailers and carriers. But overall the story of Christmas 2014 is a positive one and demonstrated the tenacity of the retail industry in recovering from significant challenges. We saw almost all carriers clearing their pre-Christmas deliveries so effectively that many orders scheduled for delivery after Boxing Day were delivered before the 25th. There’s no escaping retailers and carriers need to consider how to manage another Black Friday peak but the data shows final mile deliveries coped very well with Christmas 2014’s record volumes.”

Tagged as: ecommerce | parcel delivery | retail | high street

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