It’s the holiday season, which means that e-commerce is on overdrive. Final-mile services have been stretched thin as people look to get packages in time for the holidays. The influx of retail spending does raise the question of what happens after the holidays. All the e-commerce shippers have to navigate the world of online shopping and returns.
Return/reverse logistics is a challenge for a lot of shippers. Consumers don’t want to pay for returns, and they want returns to be easy and relatively hassle-free. That is easier said than done for shippers that send products throughout the U.S.
To get a handle on this, the National Retail Federation and Happy Returns have released some 2024 findings on e-commerce returns.
In 2024, total returns for the retail industry are projected to reach $890 billion. Some of the biggest highlights include: 76% of consumers consider free returns a key factor in deciding where to shop. More than two-thirds of retailers surveyed say they are prioritizing upgrading their returns capabilities within the next six months. A majority (93%) of retailers said retail fraud and other exploitive behavior are significant issues for their business.
Not only is it a challenge on the inventory side, it’s a cost issue for shippers as well. Retailers estimate that 16.9% of their annual sales in 2024 will be returned.
As most of the returns as a result of the holidays happen after the first of the year, it’s a rough start for retailers at the beginning of the year to have heavy returns hit the balance sheet in the slowest month on the calendar.
To ignore the returns process would be massively detrimental, as 67% of those surveyed say a negative return experience would discourage them from shopping with a retailer again.
With shippers facing a heavy lift in the way of returns, they will start to rely on 3PLs and freight brokers to pick up some of the returns process. Maybe 2025 will finally be the year of reverse logistics making a splash in the supply chain world.
Market Check. Memphis, Tennessee, is the market of the week. It’s not exactly a hotbed of Christmas freight but is still a tightening market. Outbound tender rejections have risen 1,048 basis points week over week for an OTRI of 16.07%. With rejection rates above 10% for a sustained period, expect elevated spot rates, especially heading into the holiday week because capacity will continue to tighten as it leaves the market for the holiday.
The OTRI in Memphis is nearly double the national average of 9.95%, indicating that spot rates are significantly higher than the national average. That’s a trend that will continue to be seen throughout the U.S. as Christmas and New Year’s get closer and carriers look to take a break and enjoy the time off.
Who’s with whom. Trees are synonymous with this time of the year. Christmas is just days away and live trees can still be found at stores. Although the options might be slim, holiday cheer can be found. Every year 25 million to 30 million Christmas trees are sold in the U.S. While it does take seven years on average to grow trees for the year, it is heartwarming that for every tree cut down, three are planted in its place.
The stats behind the trees:
- There are 15,000 specialized farms in the U.S. for growing Christmas trees. They are based in every state, though most are in Oregon, North Carolina, Michigan, Wisconsin, Washington, New York and Virginia.
- Consumers can buy real trees on Amazon now.
- The average cost of a Christmas tree in 2024 is $80 to $100.
- Twenty-six percent of people plan to buy a real Christmas tree in 2024.
Real trees are shipped typically in dry vans or reefer trailers to maintain freshness as long as possible during the season. Some shippers even request trees be transported on ice to maximize longevity.
Around the beginning of November, the Christmas tree supply chain really ramps up. Trees are harvested and there’s a push to get them moving. Typically the weeks leading up to Thanksgiving will see the emergence of fir trees on trailers.
But no matter where it comes from, there will always be the debate on which is better: a real tree or a fake one.
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