TAKEAWAYS Shaping the Future of the Global Supply Chain
Sustainability took a back seat during the height of the pandemic in 2020, but is now in the driver’s seat as a key ideal that consumers want their favorite brands to embrace, finds the 2022 Retail and Sustainability Survey from global business applications firm CGS. In fact, nearly half of respondents (42%) indicate they prefer sustainability over expedited shipping, saying they would choose to wait longer to receive goods from online suppliers more sustainably ( see chart ). During the past three years, the report—which surveys 1,000 consumers ages 18-65—has shown an up-and-down pattern when it comes to the overall importance of sustainability in retail supply chains: • In 2019, 70% of CGS survey respondents said that sustainability was “somewhat important” to them when Consumers Want More Action on Sustainability
Source: CGS 2022 Retail and Sustainability Survey
respondents are in favor of paying more for sustainable apparel, and 18% are willing to pay up to 25% more. Consumers believe more steps can be taken on sustainability: Only slightly more than one-third (34%) of respondents say brands offer enough transparency into their sustainability practices. When asked what environmental and social commitments brands should prioritize the most, 32% of respondents cite ethical labor practices. There’s a generational difference in beliefs: A majority of Gen Z (60%) and millennials (59%) would support a national/ global law mandating sustainable practices, while only 37% of baby boomers are in support of such a law.
purchasing apparel/footwear products. • In 2020, that number dipped to 51%.
• In the 2022 survey, interest resurfaced to pre-pandemic levels: 79% of respondents believe that sustainability is “somewhat important” to “very important.” Other key takeaways from the survey: Americans are being more intentional about shopping sustainably: Despite inflation rates and global events, 68% of Higher Transport Rates on the Horizon Even without a crystal ball, it’s not surprising that predictions from the April 2022 Cowen/AFS Freight Index center around higher prices. The main takeaway from the Index, a quarterly transportation snapshot with predictive pricing across multiple freight sectors, is that fuel surcharges, together with market forces, will push parcel and LTL rates to record highs, while truckload growth rate is expected to ease. “Rising fuel prices are no secret,” says Tom Nightingale, CEO of AFS Logistics. “In a tight capacity market, carriers are responding with significantly higher fuel surcharges. Shippers should expect rising rates across the board, as those higher fuel surcharges join the usual suspects like capacity constraints, GRIs, firm pricing policies, and steep accessorial increases to intensify upward pricing pressure.”
The Index plots the implications for three different groups:
Truckload shippers are likely to continue rate-per-mile increases and will see ongoing cost-per-shipment growth in Q1 2022. (Early data, however, indicates truckload demand in 2022 will soften compared to 2021.) For LTL shippers , significant increases to fuel-related costs are expected to continue due to disruptions to global oil supply and continued high demand, which has resulted in LTL carriers adjusting fuel surcharge tables. Fuel surcharges are also in play in a big way for ground/express parcel shippers : the express parcel net effective fuel surcharge increased 24.7% in Q1 2022 (quarter over quarter). The express parcel index is forecast to grow from 0.8% in Q1 to 1.8% in Q2 2022, while the ground parcel index is expected to reach an all-time high of 24.6% in Q2 2022.
22 Inbound Logistics • May 2022
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