Now that the challenges of the lockdown era are behind, and disruptions have solidified into new consumer behaviors and business practices, what’s next for ecommerce operations? In our annual MCM Outlook report, we talk to retail leaders and industry experts to drill down into how companies are faring and what’s working.
Yet another effort is underway in Congress to eliminate the costly prefunding of retiree healthcare benefits that have been an albatross for the U.S. Postal Service since a 2006 reform measure, and this time appears to have some more bipartisan momentum.
The U.S. Post Office suffered most in terms of on-time performance and complaints this peak holiday season, experts agreed, with FedEx also having issues but not to the same extent and UPS doing better. Carriers of all stripes were buried by a cataclysmic holiday package deluge from Thanksgiving to Christmas.
As 2020 comes to a close, it’s time to reflect back on a wild and crazy year in retail, to paraphrase the Festrunk brothers from Saturday Night Live. COVID-19 came in like a wrecking ball in February and March, causing widespread shutdowns that hit retail especially hard, leading to hockey-stick growth in ecommerce.
After the explosion in holiday ecommerce, comes the flood of holiday returns, expected to cost retailers $1.1 billion, twice what it did in 2020, according to data from Narvar. goTRG and Returnly both said Dec. 26 was the peak day for consumers to initiate returns. UPS traditionally lists Jan. 2 as peak returns day for transit of returns.
UPS has extended shipping surcharges into 2021, with some similarities and some differences FedEx. Most notable was a steeper price drop for the surcharge on UPS’s SurePost last-mile service, used by many smaller ecommerce shippers, as FedEx may be covering the cost of shifting volume from the USPS into its own ground network.
FedEx announced this week it is extending peak surcharges beyond the holiday season, while lowering them from higher holiday levels, citing the expectation of ongoing heavy volume and associated costs, although some observers question that rationale amid strong financial results. UPS is expected to follow its duopoly partner.
Heading in the home stretch of the holiday peak season in an extraordinary year, and past the cutoffs for Christmas delivery by ground at major parcel carriers, transit time performance is holding up well even though expected delays reports are popping up. Vaccine delivery and heavy weather are compounding matters.
FedEx is acquiring ecommerce platform ShopRunner, which offers subscribers guaranteed two-day delivery for $79 a year, looking to bolster its ecommerce offerings and bulk up in the battle against ex-partner Amazon, which is expected to restart 3P fulfillment in 2021. ShopRunner, based in Chicago, will be operated as a subsidiary.
A decline in delivery performance in certain lanes has led Amazon to restrict use of FedEx Ground and Home Delivery for Seller Fulfilled Prime orders, according to the Memphis Commercial Appeal. Overall on-time performance of carriers is already being challenged even ahead of the traditional start of peak season.