How Black Friday Affects Logistics Companies

Wednesday, 21 November 2018 12:40:18 Europe/London

How Black Friday Affects Logistics Companies

Black Friday has been a fixture in the UK retail calendar for the last five years. Last year, the PwC found that over three-quarters of retailers offered promotions of some kind, and the trend suggests that more will follow suit this year. These two days of intense shopping (in some cases, a week for some retailers) can be the most challenging to logistics companies due to the sheer number of orders that must be processed and delivered.

A business owner needs to be aware of the potential issues they could encounter during this period. TNT surveyed UK businesses about their main anxieties during these sales, finding that 27% are worried they don’t have the right stock, 25% have concerns they will not be able to service their deliveries and 21% fear they won’t have enough team members to handle the increased demand.

Here are some of the ways that Black Friday and Cyber Monday affect logistics companies:

Increased planning

The level of management and planning that goes into logistics on any average day is copious, but for Black Friday and Cyber Monday, planning reaches new heights. Companies are required to not only arrange transportation for many different clients, but must ensure that backup plans - and backup vehicles - are in place should a link in the supply chain suffer from delays or problems.

Any issues that arise have the potential to affect the entire supply chain, disrupting all the orders behind the delay.

More staff

Logistics companies need to increase the size of their workforce to help manage the increased demand. However, hiring staff adds strain over this period, as new workers must be trained to do their job safely and efficiently, which takes a lot of planning and organisation.

Furthermore, effectively deploying workers to deal with the demands of this period goes beyond the number of employees - rotas must be organised and implemented effectively.

Unpredictable elements

Regardless of how much planning a company puts into the period before Black Friday, it is likely that something unexpected will crop up, meaning spur-of-the-moment decisions frequently need to be made. The responsibility to quickly identify solutions to often technical problems will usually fall onto the operations managers.

Increased profits

The rise in demand for logistics services over this period gives businesses the opportunity to increase their profits and grow the company in the new year. However, with this increase in demand comes tougher competition, as companies will be vying for the most lucrative clients.

How companies handled last year’s Black Friday

Courier insurers, Staveley Head, collated data from behind the scenes of some of the UK’s biggest brands, including Amazon, Argos and Royal Mail, and found that firms hired 52% more lorries and vans to cope with Black Friday demand in 2017. Below is a breakdown of additional vehicles by brand:

Brand

Number of vehicles  

   Additional vehicles for Black Friday    

Total on road

Royal Mail    

47,000

6,800

53,800

Hermes

10,000

3,000

13,000

DPD

3,500

950

4,450

Yodel

2,500

7,000

9,500

UPS

No info

1,300

1,300

Total

   

82,050

In addition to extra vehicles, Staveley Head found that there was an additional 49,000 staff taken on across Royal Mail, Argos and Amazon, with the latter taking on the most by hiring 20,000 across all departments on top of their existing 24,000 regular workers. Argos took on an extra 10,000 people on top of their 29,565 employees, while the Royal Mail, who have 161,136 people working for them, hired an extra 19,000 staff.

 

This year’s Black Friday

This year’s sales event will see around 30 million orders placed on Black Friday - 21 million of which will be delivered to customers’ homes - according to BearingPoint. This works out at around five times the normal daily volume, equating to an extra 210,000 van trips.

BearingPoint’s Stuart Higgins told The Telegraph: “The demand levels that come through can be massive. If retailers aren’t careful around how they plan and execute Black Friday, they can just get swamped and fail the order.”

Brands have spent the best part of the year planning for Black Friday and Cyber Monday, which is due to take £10.5 billion across the week - including both of these days - according to Globaldata. Plans in place by some of the major companies include:

  • Royal Mail recruiting an extra 23,000 workers
  • Amazon hiring 20,000 staff
  • John Lewis employing an additional 3,000 workers

Black Friday is, without doubt, the busiest day of the year for couriers, delivery drivers and retailers across the world, who are responsible for ensuring orders and deliveries run smoothly.     

And it’s clear that there are many ways in which their operations could become disrupted - but hopefully, with serious planning and anticipation of what could go wrong, the logistics sector will come through the sales period unscathed.

 

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