The pain from pullbacks in retail and ecommerce spending is being felt across the board in logistics, delivery and shipping operations, both internal and external, with layoffs announced at a number of companies resizing in line with lowered demand. From Walmart to 3PLs, trucking, supply chain and robotics, reports continue to pour in.
The U.S. Supreme Court refused to hear a case involving FedEx which had the potential to set precedent by giving workers the right to join “collective action” lawsuits when they live outside the state where the issue arose. The worker classification issue has been heating up in recent years, including California’s controversial AB5 law.
UPS reported fourth-quarter revenue that fell short of expectations but earnings ahead of the consensus, while the outlook for 2023 appears challenged and the company is in margin protection mode against falling volumes and other volatility. And CEO Carol Tome optimistically predicted a “win, win, win” outcome with the Teamsters.
FedEx Ground plans to cut back Sunday delivery from 80% U.S. coverage to 50% starting in March, as it faces lower volume and the high cost of service on a light day. The company initially cut back Ground service on Sunday to 50% coverage from 95% in August, citing a focus on “improving efficiency and reducing costs,”
The three major parcel carriers had a decent peak holiday season in terms of on-time performance, with service levels comparable to 2019, according to ShipMatrix, not surprising as volumes were lighter even though holiday sales increased, as many shoppers returned to stores. FedEx saw a significant improvement over its 2021 showing.
Sales expectations are somewhat muted based on a welter of surveys and experts, as well as most retail earnings, but Cyber Week is still kind of a big deal, extended season and early deals notwithstanding. There are, of course, no lack of consumer jitters due to nagging inflation, with study after study indicating some degree of hesitancy.
