During the COVID-19 pandemic, consumers shifted rapidly toward e-commerce and haven’t looked back. Many anticipated this would happen over time, but a shift that was expected to take years to solidify has now occurred in a matter of months. eMarketer, a market research firm, projects US e-commerce sales will increase 17.9 percent to $933.3 billion in 2021 and e-commerce will grow its total share of retail sales to 23.6 percent by 2025.
In response, suppliers are holding more inventory and positioning it closer to consumers. In 2020 alone, Amazon increased its fulfillment network square footage by 50 percent, on top of a 15 percent increase in 2019.
More than ever before, shippers need reliable transportation partners that understand their sophisticated supply chain strategies. Specifically, e-commerce-driven consumption and increased inventory space are intermodal-intensive. Proximity to end consumers, coupled with greater capacity and reliability, makes rail well-positioned to meet accelerated consumer trends.
At Norfolk Southern, we had to pivot and evolve our operations to meet the latest needs of customers. That required us to be nimble and create additional capacity on our trains and in our intermodal terminals, reconfiguring the layout of some facilities to accommodate increased international container volumes and bringing online some previously closed intermodal facilities to help with capacity.
At the same time, the industry must keep an eye on the future and how those needs could continue to evolve, developing and deploying technology to increase transparency across the supply chain.
Customer demand will only increase in 2022, and our goal is to deliver customers consistent and reliable service with an eye toward the future.