Brands are increasing their average selling price to counter increased costs in the supply chain.
After a year of capacity problems with last-mile deliveries, low freight capacity to restock and an overwhelmed fulfilment system, retailers are gearing up for a repeat in 2021. “Shippageddon” refers to a combination of global supply chain issues that obstruct brands and retailers from fulfilling customer demand for purchases.
This year, brands are battling several problems, beginning with the rising prices of shipping containers. For instance, the CEO of home products brand Simple Modern tweeted that the company’s costs per shipping container and transit time have increased 122% and 105%, respectively.
Similarly, with delivery demand in peak season, this year expect to exceed capacity by five million packages per day, last-mile carriers are set to impose surcharges and daily package limits. Amazon has also altered its methodology to calculate the inventory sellers can stock up at its warehouses.
[6 minute read]