Logistics Industry Sees Growth, Retail Strategies For 2024 and Trade Organizations Unite Over Red Sea Crisis

by | Feb 16, 2024 | Logistics

Chris Jones, EVP of Descartes Systems Group recently published a thought piece highlighting what he believes are the four logistics and transport trends that will shape retail success in 2024, Warehouses are seeing a loss in demand as subleases become more popular, The U.S. logistics industry is showing signs of recovery after nearly two years, and UPS is beginning to offer Saturday delivery to Canadians.

Logistics Strategies To Drive Retail Success in 2024

Chris Jones, EVP of Descartes Systems Group recently published a thought piece highlighting what he believes are the four logistics and transport trends that will shape retail success in 2024. These trends include a persistent labour shortage, prompting the need for retention strategies and automation to ensure efficiency. Rising costs, particularly in labour, fuel, and capital, drive retailers to prioritize cost-reduction efforts through innovative strategies and strategic modelling tools. Moreover, the focus shifts from customer service to an enhanced customer experience, demanding greater delivery precision and real-time access to delivery status. Lastly, retailers must explore new business models, such as hybrid delivery routes and eco-friendly options, to meet customer expectations and reduce costs. 

Subleases Reach Record High As Warehouse Demand Shrinks

The warehousing market is experiencing signs of contraction as retailers and their suppliers shift their focus from expanding storage facilities to consolidating warehouses and upgrading existing sites. The adjustment reflects a shift in retailers’ strategies as they move away from a period of inventory drawdown and align supply chains with more normal, pre-pandemic stocking and consumer spending patterns. The subleasing trend has reached a record high, with over 156 million square feet of U.S. warehouse space listed for sublease in the fourth quarter of 2023, marking a significant change from the industrial real estate market’s earlier boom during the pandemic. 

Trade Organizations Issue Open Letter About Red Sea Crisis

Over 100 global trade organizations have issued an open letter, known as the “Global Maritime Security Joint Letter,” urging countries to support and align with the mission to ensure safe and secure maritime commerce in the Red Sea. The coalition calls for a zero-tolerance stance against attacks on commercial vessels and seafarers. The maritime crisis in the Red Sea and Suez Canal has led to significant disruptions and economic consequences, with attacks causing over $80 billion in cargo to be diverted, resulting in extended transit times, soaring freight rates, and broader implications for industries dependent on efficient maritime transportation. 

Industry Executives See Signs Of Recovery

The U.S. logistics industry is showing signs of recovery, indicating a potential end to the nearly two-year-long slump. Containerized imports experienced the highest month-over-month growth in January in seven years, while transportation prices increased for the first time since June 2022. Although the recovery is not a sharp rebound, some industry executives express optimism that a bottom has been reached. However, caution remains among some industry players, emphasizing the need for continued observation of global freight volume trends.

UPS Announces Saturday Delivery For Canada

UPS has announced a Saturday home delivery service in major Canadian markets, starting with Toronto. Customers, who typically receive residential deliveries on Mondays, will now have the option to get them on Saturdays at no additional cost. By March, this service will extend to Greater Vancouver, Montreal, Calgary, and Laval. The Saturday delivery option is expected to reach over 4.5 million homes in Canada by the end of 2024. 

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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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