Although Golden Week ended two weeks ago and factories across China have reopened, the disruption the holiday sets in motion is now working its way toward U.S. delivery networks, and it is arriving with peak season in its path.
Suryansh Jalan, chief business officer at last-mile delivery platform FarEye, warned that a reopened supply chain is no guarantee the downstream network has caught up, with delayed volumes arriving in waves rather than via a planned uniform flow.
Jalan asserts this bullwhip effect can make or break a retailer’s holiday, in which ill-prepared merchants can be caught in a tug-of-war where they have either too much or too little inventory in any given product.
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“It either means you’re going to suffer on experience because your customers are going to be disappointed and they may not come back, or you’re going to have elevated costs to try to figure out an ad hoc alternative [to replenish inventory],” Jalan told Sourcing Journal.
Peak-season carrier strategy is already shifting in response, with retailers widening their carrier bases against holiday surcharges and capacity limits at the large national carriers, instead going directly to regional carriers that previously would have been subcontracted by the top delivery incumbents.
With technology standardizing the delivery experience across the larger pool, Jalan said that national carriers account for less than 50 percent of fulfillment for retailers and manufacturers partnering with FarEye.
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