As the holidays approach, it's a time of wish lists and gift exchanges. For those of us in logistics, it's the peak season: a test of efficiency, speed and reliability.
More Packages. More Problems.
The National Retail Federation (NRF) projects total holiday sales for 2024 to grow between 2.5% and 3.5%, reaching $979.5 billion to $989 billion in November and December. Moreover, with Christmas and Hanukkah overlapping this year, the supply chain faces an even higher volume of holiday shipments all at once.
Peak season shipping demands expand every year due to the continued growth of e-commerce. According to Adobe’s 2024 Holiday Shopping Report, U.S. consumers are expected to spend a record-breaking $241 billion shopping online this holiday season, an 8.4% increase from 2023.
E-commerce has reshaped consumer expectations. Today, roughly 80% of consumers are willing to pay more for faster shipping, with same-day and next-day delivery becoming standard during peak season.
But that’s not all – returns are a major part of peak season logistics. The NRF estimates that 15% to 30% of online purchases are returned, compared to 8.89% for in-store purchases. Managing this post-holiday surge in returns, known as reverse logistics, requires efficient and bi-directional systems to handle the influx.
Santa’s Modern Day Sleigh
With the ease of clicking “Buy Now” and expecting it to show up the next day, people rely on a seamless delivery chain without a second thought. Yet behind the scenes, there are countless moving parts.
Take Pandion, for example, a Prologis Ventures-backed company that offers end-to-end residential delivery solutions, including sorting, packaging and shipping. Pandion is designed to help online retailers, with a focus on small- and medium-sized businesses, keep up with the complicated nature of e-commerce logistics. Pandion is using their proprietary software to ensure that many consumers are delivered a happy holiday season. Their technology optimizes shipments, ensuring packages arrive when they should, just in time for wrapping.
Handling the Holiday Hullabaloo Requires Many Players
From where we sit in the heart of supply chains, we don’t just observe this frenetic season—we collaborate with our customers and other stakeholders, like our Prologis Ventures partners. Our warehouses, strategically placed near urban population centers, are critical pinpoints for holiday deliveries, from the starting line to the last mile.
Looking ahead, peak season shipping will continue to evolve, driven by advances in technology, data analytics and shifting consumer behavior.
