Summary
” Loewen said. “When customers are not charged directly, those costs are absorbed elsewhere in the value chain.” Kenco’s response is to place inventor…
What this means for you
For Chinese readers in the US who are planning holiday purchases, Kenco’s survey indicates that 43% of the North American consumers it surveyed plan to spend more this peak season, while 39% expect to spend about the same and 18% plan to spend less. The same survey reports that 73% of respondents consider free shipping standard, 48% expect two-day delivery, 47% expect free returns, and 40% expect real-time tracking, so shipping and returns are practical things shoppers may compare. It also reports that 45% of respondents named import tariffs as a cost concern and that free-shipping costs are absorbed elsewhere in the value chain when customers are not charged directly, which the article connects to pressure on retailers and third-party logistics providers.
The bigger budgets come with bigger supply chain expectations someone has to pay for. In the survey, 73% of respondents said they consider free shipping standard when shopping online, 48% expect two-day delivery, 47% expect free returns, and 40% expect real-time tracking.
Most of the goods are already here. The Global Port Tracker that the National Retail Federation and Hackett Associates released Oct. 8 shows August was likely the busiest import month of 2026, and NRF said most holiday merchandise has arrived.
Frank Loewen, senior vice president of retail operations at the Chattanooga, Tennessee-based third-party logistics provider, said the jump in planned spending can be read two ways.
“One, I am in a better place, so I can afford to spend more,” Loewen told FreightWaves. “Another one is I’m expecting prices to go up, but I still have to buy my kids presents, so I’m just going to end up spending more than I did last year for potentially the same item.”
Some of Kenco’s higher-end customers are seeing more volume than in the last couple of years, which Loewen said could reflect a K-shaped economy. Price pressure shows up elsewhere in the survey: 45% of respondents named import tariffs as a cost concern.
This year’s survey, fielded in August 2026, polled more than 350 consumers, up from 250 for Kenco’s 2025 report.
Free shipping costs shift to 3PLs
Loewen traced the free-shipping expectation to Amazon, whose Prime memberships give it income to offset the shipping it gives away. That has put pressure on 3PLs and retailers, he said.
“Nothing is free, right?” Loewen said. “When customers are not charged directly, those costs are absorbed elsewhere in the value chain.”
Kenco’s response is to place inventory as close to population centers and carriers as possible, he said, then line up carrier rates that leave flexibility for the last mile.
Free shipping also changed how shoppers order, and that feeds returns. Only 5% of respondents said return policies don’t matter when deciding where to shop.
“Consumers may order additional items when shipping carries no additional charge, then return what they don’t keep and expect their refunds as quickly as possible,” Loewen said.
More retailers now charge for returns, he said, while steering shoppers to drop-off points at malls and supermarkets. Fees carry their own risk: 32% of respondents said they would stop shopping with a retailer after encountering hidden fees.
Shoppers tie trust to stock accuracy
In the survey, 80% of respondents said inaccurate stock levels hurt their trust in a retailer.
Retailers once filled online orders from a single warehouse, Loewen said. Now they draw on inventory in stores and several warehouses at once.
“So the idea of having accurate, location-level inventory is essential because customers can see product availability before placing an order,” he said. “They may not know which store or distribution center will fulfill it, but the item has to be available within that network.”
Loewen said Kenco’s warehouse management systems send real-time inventory data to customers’ Shopify storefronts, order management systems, or enterprise resource planning software, and its cycle counts hold accuracy at 99.9% in many cases.
Kenco leans on robotics to scale for peak
Adding peak capacity once meant bringing in large numbers of workers or installing conveyors and automation sized for a single season, Loewen said.
“Traditionally, operators had to build labor and infrastructure capacity around their highest seasonal demand,” he said. “Flexible automation now allows us to scale throughput without carrying that excess capacity throughout the year.”
Kenco now uses goods-to-person systems in which robots bring product to pickers. The company announced plans in 2024 for a 130-robot AutoStore system serving multiple e-commerce customers at its Jeffersonville, Indiana, distribution center. AI tools now group orders so products are picked more efficiently, work people once did by hand, Loewen said.
“People are still involved and responsible for operating the technology,” he said. “But with automation, we’re able to fulfill orders more efficiently than we could in the past.”
Why it matters: Shoppers plan to spend more this peak, and 73% still treat free shipping as standard. Kenco is moving inventory closer to customers and leaning on robotics to absorb those costs, while its own executive says part of the spending jump may reflect higher prices.
Source: FreightWaves
Join the discussion
When you shop online for holiday gifts, do you treat free shipping as a standard expectation, or do you check shipping and return policies before choosing where to buy?
