More than four out of ten (41%) of European supply chain executives expect this year’s peak retail season to be more challenging than that of 2022, with only 18% believing it will be less difficult. That’s according to a recent survey led by Deposco of 200 supply chain leaders working for European retailers, manufacturers, wholesalers, or 3PL/4PL firms.
The relative impact of peak season is growing too, with Amazon Prime Day now considered a peak event by 62% of respondents. Among the key challenges faced during this period, more than half (52%) of respondents pinpoint the management of costs among their top priorities. Linked to this, 35% of the sample rank ‘escalating pricing’ among their top three concerns entering peak season this year, making it the top concern overall.
Will Lovatt, general manager and vice president Deposco Europe says: “The focus on value is no surprise in an unpredictable economy where costs for labour, materials, and services are higher. Amid these price hikes and inflation, it costs more to get work done, so supply chain executives have their eyes on expenses.”
Concerns about costs are exacerbated by the wider macro-economic picture. For 40% of respondents, inflation is the national/global issue of most concern, even when compared to factors like political instability, upcoming elections, and seaport delays.
As a result, leaders expect far-reaching inflation impacts. 52% anticipate higher costs for supplies and services, 40% expect reduced consumer demand due to the cost-of-living crisis and 26% are predicting longer lead times.
The drive towards sustainable logistics is another key challenge identified by respondents, with 33% stating that improving sustainability is among their top priorities for peak season 2023.
“All these factors are driving market complexity and uncertainty,” adds Lovatt. “In general, operators understand and accept this but they are also eager to attack it more proactively. Experiences in recent years have created a thirst for solutions that simplify these uncertainties and provide resilience in coping with current realities. We are seeing a growing demand for technology to address these challenges from demand forecasting through to the latest warehouse management system and order management system solutions.”
