A massive shift to ecommerce has already created peak-like conditions for shippers and carriers in 2020. Now comes the actual holiday season, a huge unknown but still expected to generate staggering volumes. This report taps ecommerce logistics experts who discuss the extraordinary challenges facing shippers this Q4.
eBay has struck a deal with UPS to provide its sellers with discounted shipping, after telling them last month it was aware of service delays with primary carrier the U.S. Postal Service and complaints from sellers. The major marketplace said the discounts would be available to all of its sellers by the end of September.
While total e-grocery sales in the U.S. declined 20% in August vs. June to $5.2 billion, other factors indicate strength in the sector, such as growth in average order value and repeat usage intent, according to a survey by Mercatus and Brick Meets Click. AOV reached a high of $95, the survey found, 32% higher than a year ago.
Parcel shipping services will be in high demand for peak holiday season as more consumers are shopping online in the midst of COVID. And a new wave of peak surcharges from major carriers poses a significant burden for ecommerce shippers – and they’ve already hit. Here are ways to mitigate the costs coming into peak season.
The House approved a $25 billion relief package for the beleaguered USPS, a measure not expected to pass muster in the GOP-led Senate, as new Postmaster General Louis DeJoy is undergoing intense scrutiny in Washington over changes he is initiating. A second hearing before a House panel is scheduled for today.
FedEx as expected added peak surcharge fees onto its pricing schedule for an expected blowout peak holiday season this year, adding up to $2 per package for the SmartPost final mile service and up to $5 per package for the next-day Express service. UPS and the U.S. Postal Service have already announced their peak pricing.
The U.S. Post Office is taking the unprecedented step of seeking a peak surcharge in anticipation of huge holiday demand for ecommerce parcel shipping. If approved the increases would take effect from Oct. 18 to Dec. 27, ranging from an additional 24 cents to $1.50 more per package, across all its products.
USPS Postmaster General Louis DeJoy doubled down on the need for greater efficiency and performance, while enacting new measures. Also, the USPS reached an agreement in principle to receive a $10 billion loan from the U.S. Department of the Treasury under the CARES act, and created for the first time a loyalty program.
UPS, facing massive volumes akin to the holiday season due to COVID-19’s impact on ecommerce, is imposing surcharges on larger-volume shippers and those sending bulkier items as of May 31 to offset its costs, impacting companies already reeling from the crisis. Experts agree they expect to see FedEx follow suit shortly.
Amazon Air is projected to have 200 cargo jets in its fleet by 2027 or 2028, bringing it close to parity with UPS if the latter doesn’t expand significantly, according to a study from DePaul University. The study said Amazon Air has grown to 42 planes since its launch in 2016, with plans to expand to 70 by 2021, putting it on par with DHL.