The Future Of Fulfillment Struggles And Overstocking Challenges And New Acquisitions Made By IKEA and Flexport

by | Jun 9, 2023 | Logistics

Several companies are back-pedalling on promises after trying to keep up with Amazon, the Panama Canal is facing low water levels, and IKEA has made an acquisition in the logistics field. Meanwhile, retailers are confident that overstocking challenges are a thing of the past, and Flexport has completed its acquisition of Shopify’s logistics division.

Companies Struggle To Keep Up With Amazon Fulfillment

Several companies, including Shopify, American Eagle Outfitters, and Blue Apron, that had ambitious plans to establish e-commerce fulfillment services, are now scaling back their logistics operations. These companies aimed to compete with Amazon’s extensive logistics network by developing their own distribution channels. However, as the growth of online commerce returns to pre-pandemic levels, these companies are realizing that the task of delivering goods reliably and regularly to customers is more challenging than anticipated.

Source: Wall Street Journal

Panama Canal Faces Low Water Levels

The Panama Canal is implementing water-saving measures to maintain water levels and ensure smooth transit without affecting cargo shipping. These efforts come as the canal expects worsening water levels due to the El Niño weather pattern and a climate emergency declaration by the Panamanian National Government due to prolonged drought. Some ocean carriers have already introduced low-water surcharges for containers passing through the canal. 

Source: Supply Chain Drive

IKEA Acquires Could-Based Warehouse Management System

IKEA has acquired Made4Net, a cloud-based warehouse management system provider based in the United States. The acquisition aims to enhance online order fulfillment processes, enabling IKEA to improve its omnichannel fulfillment capabilities across stores and e-commerce fulfillment points. Made4Net will continue to operate as an independent subsidiary, maintaining its headquarters in New Jersey and its global offices.

Source: Inside Logistics

Retailers Confident That Overstocking Challenges Are In The Past

Major retailers are indicating that they have significantly reduced their excess inventories and are preparing to restock their shelves with new merchandise in the coming fall. This development brings potential hope for freight carriers as restocking efforts are expected to drive a shipping rebound. The retailers are confident that the overstocking challenges faced in the previous year are now behind them and are focused on bringing in fresh merchandise for the upcoming season.

Source: Wall Street Journal

Flexport Finalizes Shopify Logistics Acquisition

Digital freight forwarder Flexport has successfully completed its acquisition of Shopify’s logistics arm, including Deliverr, a shipping services provider that Shopify acquired last year. With this acquisition, Flexport enters the e-commerce fulfillment and last-mile delivery space. As part of the deal, Shopify will receive a 13% equity stake in Flexport and a seat on the board. Shopify had previously invested in Flexport and the two companies have collaborated closely, including the development of a tool for managing inbound ocean shipments for Shopify sellers.

Source: Freight Waves

As we enter the exciting 2nd half of the year, are you prepared for the busy fall season ahead? If you are free for a quick call, let’s discuss your eCommerce fulfillment plans. Our team of logistics experts is ready to assess your needs and develop a tailored plan that keeps your business moving forward. 

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NLS Logistics Team
As a leading Third Party Logistics (3PL) firm, we have the strategic infrastructure, technology relationships, and insights to help Canadian and international brands reach and serve the Canadian market.

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