Yahoo Finance Forecast rain to disrupt Aussie deliveries, retailers warned
Australia's east coast is in for another wetter-than-average spring and summer, according to the Bureau of Meteorology, which could mean a bumpy road ahead for unprepared retailers.
The unprecedented weather conditions and devastating floods that affected much of the region earlier this year put extreme strain on a supply chain already creaking under pressure from the pandemic, labour shortages and other external factors.
New data from retail logistics platform Shippit has shone light on the effects of bad weather on the e-commerce industry.
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The data, taken from millions of deliveries from 3,500 retailers - including Target, Myer, Cotton On and BIG W - in Sydney in 2020 and 2021, revealed that the average delivery took up to 9 per cent longer to complete when there was heavy rain.
Considering Australia's logistics industry employs roughly 80,000 drivers, that's the equivalent of an additional 7,200 drivers' worth of work created every time it storms.
Flexibility is key
Shippit co-founder and co-CEO Rob Hango-Zada sees tough times ahead for businesses that lack flexibility and redundancy when it comes to executing customer deliveries.
"Whether due to floods, bushfire, the pandemic or global labour shortages, the only certainty in the logistics industry today is uncertainty," Hango-Zada told Yahoo Finance Australia.
"Consumers have high expectations and low tolerance for when these expectations are not met.
"Adverse weather, the boom in e-commerce and consumer demand for transparency and convenience can severely test these expectations.
"During the devastating floods earlier this year, we saw delays in excess of 10 days on many of Australia's busiest routes."
With the eastern states expecting a wetter-than-average spring and summer, Hango-Zada believes we could be in for more of the same delivery issues this year.
"Today, more than ever, contingency and flexibility are essential," he said.
Retailers and carriers must prepare for disruptions
Hango-Zada said retailers, especially those with multiple physical locations, must consider their ability to operate across different logistics providers to ensure they were prepared for any type of disruption.
"As peak retail season approaches, retailers and carriers must prepare," he said.
"Retailers that rely on only one carrier will struggle if that carrier is affected by the weather.
"Those best placed to overcome disruption will be those with an agnostic approach - one that relies on multiple carriers.
"What's more, carriers with route optimisation are more resilient to increasingly extreme weather."
Route optimisation allows carriers to re-route and efficiently share work with a range of couriers that have adequate capacity and diverse freight specialities.
In response to the findings, and with increasing rates of extreme weather conditions, Hango-Zada said Shippit was investing in tools such as carrier allocation logic "so retailers can run a flexible operation, manage consumer expectations and keep them up to date as each day unfolds".
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