3PL Perspectives
Shelli Austin | INTEK FREIGHT & LOGISTICS, INC.
Love it or loath it. For most of my life, I considered Valentine’s Day one of the most useless holidays and nothing more than a crafty ploy for the retail industry to guilt people into spending more money. However, when thinking about the holiday in a logistics industry sense, my professional opinion has changed.
Four of the top five gifts that are most commonly purchased for Valentine’s Day in the United States have, at some point, moved on the rail to get to their destination for purchase or final delivery to end consumers.
Temperature-controlled intermodal is one of the hidden modes of transportation that many still do not know exist. As the rail lines continue to provide transit times close to truck, the use of dry- and temperature-control intermodal is more sought after for movement of products. More so than most would have imagined would move on the rail.
Zahid Rashid, Jelly Belly’s Director of Distribution said, “As it turns out, the railroads have mostly come through. More than 95 percent of the time, shipments arrive within the four-day transit time we were achieving with over-the-road.”
And it’s not just jelly beans. According to the National Retail Foundation (NRF) American consumers spent $19.6 billion on Valentine’s Day in 2018, with American men forking over an average of $150 or more each for the romantic day. And what were the top three choices?
- Jewelry ($4.7 billion)
- Flowers ($2 billion)
- Chocolate ($1.8 billion)
Americans spent about $654 million on co-workers for Valentine’s Day in 2018 – less than we do on gifts for our pets. But millennials spent the most on Valentine’s gifts, shelling out on average more than $200 per person, according to the NRF.
In 2018, an estimated 36 million heart-shaped boxes of chocolate were delivered. As for roses, the Society of American Florists estimates that 250 million roses (most of them red) were produced for the holiday this past year.
Americans spent about $654 million on co-workers for Valentine’s Day in 2018 – less than we do on gifts for our pets. But millennials spent the most on Valentine’s gifts, shelling out on average more than $200 per person, according to the NRF.
Two of the top Valentine’s gifts (flowers and chocolate) have moved at some point on temperature-control rail, for cost and/or capacity reasons, to get from point A to point B and ensure shelves are stocked for buyers on February 14.
Without the proper temperature controls flowers will bloom before delivery. Complicating this need for temperature control is the distance from field to store. The Society of American Florists, reports that roughly 64 percent of all flowers sold for Valentine’s Day are imported from Columbia, Ecuador and Mexico. California tops the list of domestic producers.
According to the U.S. Customs and Border Protection, more than one billion imported flowers were inspected for the Valentine’s Day season in 2017 (most current information available). The once thought of deferred “slow boat to China” service has become one of the most sophisticated modes of transit for protection of perishable goods. These providers have the technology to monitor the temperature of a container throughout the life of the shipment and adjust temperature accordingly without ever being in the same physical location as the container.
As you think through the impact of transportation related to this day of consumer spending, you start to lose yourself in a web of connections.
For example, much of the jewelry sold in the U.S. originates overseas. Therefore, the life of this commodity starts on the water in a container bound for port. It continues moving inland on the rail and then completes the final journey on a truck. As we get closer to the holiday, many of these modes of transit become more time sensitive and transition from the ocean to rail, truck and final destination is subject to glitches and delays.
Months of planning and resources go into the transport preparation to ensure the timing is just right to have these items on the shelf for consumers to purchase.
The only item that has declined in transportation spend would be the greeting card industry, as most of this has converted to eCards. Although the movement toward ease and convenience has adversely affected the personal touch the holiday once had, old-fashioned Valentine’s Day cards still have appeal. In fact, modern couples exchanged 190 million greeting cards on Valentine’s Day, according to the NRF.
As for the future? Valentine’s Day will always depend on the logistics industry, and I now appreciate just how far that bouquet of red roses had to travel to land – still fresh – on my dining room table.
$19.6 billion: An estimate for how much U.S. consumers spent on Valentine’s Day 2017 according to the NRF.
36 million: The number of heart-shaped boxes of chocolate sold for Valentine’s Day each year.
110 million: The approximate number of roses, the majority being red, which will be sold and delivered within a three-day period.
$150: The average amount American men spend on Valentine’s Day. $2 billion: The amount people will spend on flowers this Valentine’s Day.
60%: The percentage of American roses produced in California.
Shelli Austin is President of InTek Freight & Logistics, Inc. in Indianapolis, IN. She can be reached at [email protected].
Photo Credits:
Sarsmis/Shutterstock.com
Charlotte Lake/Shutterstock.com
