Welcome to our latest eCommerce and logistics news roundup!
This week, we’re talking about the coronavirus’ impact on Amazon’s operations in Q1; discussing how the FedEx x BigCommerce partnership will help SMEs; and debating whether the USMCA trade deal should really go into force on July 1.
And, in case you missed our last logistics roundup, you can still read it by heading over here!
Amazon Fulfillment Takes a Major Hit in Q1 2020
Retail giant Amazon has reported a 49% increase in shipping costs for the first quarter of 2020 compared to the year before, amounting to a total of $10.9 billion worldwide. CFO Brian Olsavsky put this down to extended delivery times.
During the quarter, delivery times for essential items on Amazon Prime increased from one to four days as a result of the COVID-19 pandemic. This was despite the company hiring 85,000 new workers at the same time.
The issue was further compounded by the governments of several countries around the world mandating that Amazon stop deliveries of non-essential items or otherwise complicating the fulfillment process. While Amazon’s operations were affected in places like Italy and India, it was its contested court case in France that drew attention.
In mid-April, a French court ruled that Amazon could not sell non-essential items in the country, forcing the company to shut its six warehouses and put thousands of employees on furlough. It subsequently lost its appeal at the Versailles Court of Appeals, which ruled that the warehouse would have to stay closed until May 5 at least.
However, with the hiring of more workers, the easing of restrictions, and the opening of more warehouses, Amazon could see more topline sales for Q2.
Easyship’s Take: Amazon has been a much-needed resource for people around the world struggling to get essential items during the COVID-19 pandemic. However, severe lockdowns and government restrictions have complicated the retailer’s operations over the last few months, so it was only to be expected that its Q1 operations would take a hit.
However, with some countries slowly easing restrictions and more operational capacity, Q2 could be much smoother for Amazon - and the millions of people that shop on its sites.
FedEx Teams Up with BigCommerce for Discounted Shipping
Global courier FedEx has teamed up with major eCommerce platform BigCommerce to help online retailers weather the impact of the coronavirus. Through the partnership, new BigCommerce merchants will get four free months on the platform, along with discounted shipping rates with FedEx.
The move is specifically designed for brick-and-mortar stores who want to pivot to online sales to keep their business going during the pandemic. With the offer, new clients will get up to 40% off on FedEx ground shipping and 50% off for FedEx Express services.
Of course, existing BigCommerce users will benefit, too, thanks to the FedEx Advantage Program. With this, small and medium-sized businesses will get discounted access to FedEx’s eCommerce solutions
Easyship’s Take: Online shopping is the way to go in the midst of the pandemic, and it’s crucial that SMEs are able to reach their customers through online stores to maintain their business. This partnership will go a long way in helping these companies continue to provide products to their customers, and in a way that won’t be too tough on their bottom line.
Don’t forget that you can still use Easyship! You can integrate your Easyship account with your BigCommerce store to easily maintain your product listings and organize shipping. Plus, if you have your own FedEx account, you can link this to your Easyship account to access your pre-negotiated rates within the app.
USMCA Trade Deal Slated to Take Effect on July 1
It’s taken almost three years, but the USMCA trade deal is now scheduled to go into effect on July 1, replacing NAFTA, which has overseen trade between the US, Mexico, and Canada over the past 25 years. However, the three countries will still need to wrap up a whole host of details before the deal can be fully implemented.
Additionally, many North American business leaders oppose the move and are still hoping that the trade deal will be delayed. They feel that the COVID-19 pandemic has caused major economic disruptions which many businesses are already struggling to deal with.
The trade deal would impose new regulations that many businesses simply won’t have the capacity to handle right now. Last week, a private sector committee advised the Trump Administration to delay the trade deal implementation until 2021.
Easyship’s Take: Much has been said about what effect the new USMCA will have on trade in North America. Some say it’ll be good for jobs and businesses, but others worry about the effect of quotas and tariffs.
What most can agree on, though, is that implementing a new trade agreement in the midst of a major health crisis that’s causing unprecedented economic effects around the world seems ill-considered. However, President Trump seems keen to come through with a win ahead of the 2020 national election, so it remains to be seen if wiser heads will prevail.