With Valentine's Day right around the corner, lovers are in a
mad rush to send gifts to their sweethearts. This translates into
solid business for logistic companies that make this event worth
a smile by delivering gifts at our doorsteps.
Thanks to the millions of celebrants across the globe,
Valentine's Day remains special for logistics firms. The event
drives a surge in sales for these firms.
According to latest reports by National Retail Federation,
average Valentine's Day individual spending is expected to be
$130.97, up from $126.03 last year. This brings total cash
outflows to an estimated $18.6 billion this Valentine's Day.
The federation also reported that a large chunk (approximately
50%) of these expenditures would be on candies and other edible
products followed by flower, accounting for approximately 30%.
The rest would include expenditures on valuable items like
jewelry and apparels. If these figures set the retail industry on
the go, the packaging industry will not remain far behind from
benefiting from the love day.
United Parcel Service Inc.
) recently reported that it expects to ship nearly 95 million
flowers through its network. In addition, it has tied up with
companies like Vermont Teddy Bear Company, LobsterGram Inc. and
Fairytale Brownies to ship Valentine's Day goodies for
To support timely deliveries with utmost care these packaging
companies also remain equipped with proper facilities like
temperature control containers, express delivery services,
massive warehousing and hassle-free customs clearance. Companies
like UPS have also set up 130 additional flight services for its
Globalization has indeed brought the world so close that every
individual is connected with a matrix of various networks
governed by modern technology. Whether this has simplified our
lives or made it more complicated remains subjective, but surely
it has driven trade and economics to a level where any event
(good or bad) has a global impact. Apart from other factors,
globalization has certainly given a boost to e-commerce and
largely influenced consumer behavior.
Reaping benefits from the current trends, logistic companies like
Expeditors International of Washington Inc.
CH Robinson Worldwide Inc.
) are generating a good amount of their business from events like
New Year and Christmas, celebrated worldwide. With the help of an
expanded market reach and advanced infrastructure, freight
carriers are now able to maximize profitability with shipments
across the globe.
The usual business days aside, periods like the holiday season
and special events like Valentine's Day remain important sales
boosters. These generally provide an uptick in sales in an
otherwise lackluster demand environment.
Overall, we expect this Valentine's Day to cheer up packaging
companies with good volumes that would ultimately reflect in
their quarterly results. Amid economic upheavals, fiscal cliff
debacle and nearing of budget sequester, we believe Valentine's
Day will bring some relief for the parcel companies.
CH ROBINSON WWD (CHRW): Free Stock Analysis
EXPEDITORS INTL (EXPD): Free Stock Analysis
FEDEX CORP (FDX): Free Stock Analysis Report
UTD PARCEL SRVC (UPS): Free Stock Analysis
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