E-Commerce Explodes Into Holiday Shipping Season

By Eric Kulisch of American Shipper,

Peak season e-commerce sales, turbocharged by an accelerated shift to online buying as consumers shy away from crowded stores during a pandemic, are expected to hit all-time highs this year, putting additional pressure on express delivery networks.

Retail and logistics analysts say the unprecedented level of digital commerce has pulled forward 10 years of expected growth in the span of six months. 

The flood of new orders, especially early in the coronavirus crisis when so many stores were closed, impacted express carriers’ delivery times, leading them to eliminate on-time guarantees, implement package surcharges and throttle volume available to some retailers.

The current gap between demand and supply is about 2.6 million packages a day, for a seven-day week, which will rise to 7.2 million during the upcoming peak season, according to data from Pittsburgh-based ShipMatrix. 

“It doesn’t mean those packages won’t get moved, but they will be affected in terms of the number of days for transit. So, the on-time performance will be challenging for the carriers because they are operating way beyond their capacity,” said Satish Jindel, president of the parcel analytics and benchmarking company.

“Even though the parcel delivery companies will add temporary drivers and warehouse personnel, the demand will increase in the meantime,” he said in an interview. 

On-time performance for ground services during the week of Oct. 4 -10 was 95.2% for FedEx (NYSE: FDX) and 98% for UPS (NYSE: UPS). He attributed the difference

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