Is the U.S. heading for its first “normal” shopping season in five years? Maybe so, according to Thomas Goldsby, Dee and Jimmy Haslam Chair in Supply Chain and David P. Perrot Supply Chain Management Faculty Fellow, at the University of Tennessee, Knoxville, Haslam College of Business. Goldsby monitors two indices that track global supply chain volatility, the Federal Reserve Bank of New York’s Global Supply Chain Pressure Index and the GEP Supply Chain Volatility Index. The indices show volatility on par with overall levels for the past 25 years.
“They tell a fairly stable story on the global front right now,” Goldsby says. “We’re at a pretty normal place, which is wonderful given how much chaos we have witnessed and absorbed over the past five years.”
A Calm Shopping Season?
Hurricanes Helene and Milton have caused regional supply chain disruptions in the U.S., but nationally, all lights are green. With the East Coast and Gulf Coast International Longshoremen’s Association strike settled — at least until January — goods are moving through those two important regions. The situation on the West Coast is even better.
“The West Coast ports, which is where we receive most of our ocean-bound imports, primarily from Asia, are setting records,” Goldsby says. “September brought in more tonnage than any previous month in the history of the Port of L.A.”
So, goods are pouring in, transportation systems are humming, and everything points to a calm holiday shopping season, right? Not so fast.
Causes for Concern
Goldsby adds a significant caveat: “Both of these indices bounce all over the place. If we were to characterize the last five years, obviously, there was the pandemic and a whole host of induced disruptions, as well as surges in demand and all kinds of hangups. We’ve learned not to become complacent.”
He ticks off flash points that could affect supply chains in immediate and drastic ways before the holiday season begins: possible escalation and expansion of the Middle East conflict; Russia’s continued aggression in Ukraine and its provocations elsewhere; and potential unrest and violence in the wake of the November 5 U.S. elections.
The Black Swan
Finally, there are Black Swan events — rare, unpredictable occurrences that cause significant impacts. Consumer products depend on worldwide supply chains for raw materials, manufacturing and delivery, and on a micro level, a breakdown anywhere along the chain can ripple through the entire system, disrupting it. On the macro level, as an example, the explosive spread of COVID-19 wreaking havoc on global supply chains was unforeseen, and X-factors like that keep the experts on guard.
“We have discussed things that could cause a disruption, but what if there is something we are not even discussing right now, right?” Goldsby says. “There’s a lot that we’re holding our breath about. But our supply chains are much more battle-tested these days and companies are more willing to take on inventory as a just-in-case provision.”
Seize the Deal
Despite the various potential supply chain threats, Goldsby believes that consumers, having become savvier about market conditions in the last five years, are more prepared for these variables. Given that, he says shoppers should accept the current market realities and be ready to adapt to changes just as businesspeople do.
“My advice is not to wait to the last minute,” he says. “And when you see a good deal, seize it for the sake of countering the availability risk and the inflation risk.”
He adds that, should normality prevail, consumers should be prepared for the possibility of a hot shopping season.
“Yes, businesses are stocking up for peak season, but you don’t want to find yourself at the back of the line when time is of the essence,” he says. “Folks might just need to step up both their shopping as well as their decision making and be a little bit more intentional.”
Buyers Beware: Returning Purchases
Consumers could confront changing conditions if they try to return purchases this year. The rate of returns has been increasing overall in the past several years, and 2023 set a record with 15.4 percent of purchases being returned. This is increasing costs for businesses and putting them under a heavy logistics burden, and several businesses are taking action.
“Retailers are getting more concerned with returns and exerting different policies, as well as gatekeeping procedures to be more judicious in that often-forgotten aspect of business,” Goldsby observes. “I think shoppers should be keenly aware of what commitment they’re making in this critical aspect of the shopping experience.”
Shipping Dates to Know
USPS recommended holiday shipping and mailing dates for expected delivery before December 25, 2024:
- USPS Ground Advantage: December 18
- First-Class Mail: December 18
- Priority Mail: December 19
- Priority Mail Express: December 21
CONTACT:
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Scott McNutt, senior business writer/publicist, rmcnutt4@utk.edu
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