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Welcome to the Easyship eCommerce and logistics news feed! This is your place to catch up on all the must know shipping, logistics and eCommerce news impacting your business. Each month we'll provide updates on prices increases, logistics delays, eCommerce trends and other news we discover that we know will be important for you as you grow your business.
December 1, 2020
2020 Peak Season Port Congestion
With peak season underway, merchants relying on ocean shipping to get their goods into Europe and North America from Asia are facing serious congestion at many ports, causing significant delays and hampering their ability to stay fully stocked with inventory. Merchants can expect increased rates and surcharges that might last until early next year.
The current congestion is attributed to the surge in demand after the COVID19 pandemic shut down whipping earlier in the spring. With economies opening back up during the summer, merchants and retailers rushed to stock up to keep up with consumer demand, largely driven by eCommerce. This has created a perfect storm heading into peak season with staffing shortages contributing to the delays at some ports.
Here are a few important ports to know about and what delays merchants can expect with ocean shipping.
- Los Angeles / Long Beach, US - Delay days: Unknown: Many vessels are arriving outside of LAX ports but cannot dock. ETA (Estimated Arrival) delays are around 1-2 weeks depending on carriers. Once a vessel is docked, cargo unloading can also be delayed for 1 week. There’s a serious chassis shortage and limited appointments at the ports, and with the increasing volume of containers coming in, the congestions and delays are likely to get worse heading into January. It may take a couple of months for the congestion to clear up after the peak season.
- Felixstowe, UK - No longer accepts freight booking until further notice.
- Ocean freight booking to the UK will now be destined at London Gateway.
- Melbourne, AU - Delay: ETA 5-7 days
- Ningbo / Shanghai, China - Delay: ETD (Estimated Departure) 3-7 days
What can merchants do?
We always recommend that merchants are fully transparent with their customers so they can understand why the product they are looking to purchase is out of stock. It's best to communicate early and often when you know there might be logistics issues on the horizon. This helps build trust with your customers which is fundamental to creating a lasting brand.
In the long term, it's best to review your fulfillment strategy to understand how you can avoid these type of issues in the future. Granted, this is an unusual year with the pandemic leading to unforeseen delays, but it has also demonstrated some of the vulnerabilities in the supply chain, especially for merchants relying on manufacturing in China.
It's worth considering spreading your fulfillment network and implementing a multi-warehouse strategy. It's more affordable than you might think. With Easyship and our partners, there are no minimums for inventory and you can save money on shipping costs because your product is often closer to your customers.
If you'd like to learn more about our fulfillment services, get in touch. We're happy to help provide a quote and develop an effective strategy for transitioning.
October 23, 2020
Canada Import Tax Changes
Big news from up north: The Canada Border Services Agency (CBSA) released information regarding the Import Tax Changes from the The Canada-US-Mexico Agreement.
The release states that under the trade agreement, Canada has agreed to maintain a threshold of at least $150 for customs duties and $40 for taxes at the time or point of importation of goods shipped by courier from the US or Mexico. There are otherwise no changes to Canada’s existing de minimis framework. There are exceptions to this rule, like when tobacco products and alcohol are shipped by mail.
Shipments sent by mail from the US, Mexico or any other country will still have a customs duty and tax remission threshold value of up to $20.
These new thresholds apply as of July 1, 2020, which is when the trade agreement went into effect.
Easyship Analysis: We're starting to see some of the changes that will occur as a result of the The Canada-US-Mexico Agreement. These changes from Canada shouldn't have too much of an impact on eCommerce but then again, you never know how these things can play out. International trade will continue to be a big topic with some potential major changes in the next few years. The name of the game is agility and adaptation.
Holiday Season Warning Signs
If you’ve been following the news, you know that big things are expected for this holiday season. And by big things, we mean more online orders than ever before, with consumers feeling uneasy about visiting brick and mortar stores due to the ongoing pandemic. The problem, however, is that the supply of shipments cannot exactly meet the anticipated demand.
In a newly released trend forecast, Salesforce speculated that global demand will exceed the shipment supply by 5% at the peak, leading to increased shipping rates and higher incidences of delays, Freight Waves reported. This will hit shippers where it hurts. Retailers can expect to see $40 billion in peak season surcharges between November 15 and January 15, according to Salesforce
The problem is simple: Many of our buying habits completely changed in the pandemic, and our delivery networks cannot keep up. You might already have encountered this with week long delays on some Amazon orders or waking up at 4 a.m. to get an open slot from a grocery delivery company.
Salesforce’s findings were corroborated by GlobalTranz Enterprises LLC, a 3PL provider. GlobalTranz surveyed 150 supply chain professionals about COVID-19, and, across the board, there were concerns about meeting customer’s needs and turning profit around this year’s bigger than ever peak season.
“The economic disruption experienced in the last several months has pushed business leaders to make quick adjustments to meet new consumer demands and mitigate delivery problems,” Bob Farrell, GlobalTranz chairman and CEO, said in a statement provided to DC Velocity. “Businesses remain challenged by new demands on their supply chain and need partners that can help them solve issues around sourcing, fulfillment, and final-mile delivery.”
These renewed concerns come after FedEx and UPS have struggled for months under the weight of impulsive online orders with everyone homeward bound due to COVID that may not have happened otherwise. These couriers have already struggled through past holiday seasons. Last month, both carriers announced additional hires in the hundreds of thousands to accommodate for the expected rush, which is par for the course compared to years past.
Easyship Analysis: This will be the most unique holiday season in memory but it will not be without some challenges, and the warning signs definitely need to be heeded. The merchants and sellers that put the effort into preparing and transparently communicating to their customers about shipping deadlines will be best positioned for success.
Future of eCommerce is “New Retail”
Influence is important — but it’s not everything. Let’s not mince words. Affiliate marketing is a powerful tool. And there’s a reason why brands spent $8 billion on influencer marketing in 2019 — consumers trust people in their networks, even if it’s just a blue check.
But what’s next for retail? We’ve seen how influencer marketing has changed not only the social media landscape, but also commerce. Importantly, it’s changed the way we shop. With platforms like Instagram allowing shoppers to “Get the Look” of the influencers they like with the click of a button — no need to scroll through pages and pages of product images to find something that closely resembles the coveted outfit.
Still, the future isn’t one-size-fits all — there will be multiple revenue streams. As Gavin Baker wrote in Medium, experts have long predicted a return to form and their predictions are coming true: Brick and mortar stores in the form of DTC popups. This, of course, is in a perfect world wherein there is no pandemic or health protocols are followed so visting these sores is safe.
Still, at the root of this trend is eCommerce Giant Amazon, which began opening “Amazon Go” stores in 2019 and is on track to open 3,000 by 2021. They are specialty stores, unlike the behemoth site: A bookstore or a Whole Foods. This is comparable to DTC brands like Casper and Warby Parker having brick and mortar stores in cities. Jack ma calls this phenomenon "New Retail.”
eCommerce is King
Let’s address the elephant in the room: We are in the middle of a pandemic that has turned the way we live upside down. Since the spring of 2020 when there were widespread stay at home orders and stores closed to keep workers safe and slow the spread of the virus, the retail industry in the US has taken a hit.
While in-person sales may have been doused, eCommerce jumped in Q1 and Q2. And that’s expected to continue throughout the year through peak season. A report from PwC 65% of shoppers are concerned about catching covid while holiday shopping, Retail Dive reported.
When all is said and done, the International Council of Shopping Centers estimates that eCommerce sales will grow by 25%, following 2019’s 13% growth.
Here are the stores that have had the biggest boost due to the eCommerce surge:
- Gamestop: 800%
- Ulta: 200%+
- Kohl’s: 60%
- Macy’s: 53%
USPS Peak Season Rate Increases
ICYMI: Peak season is starting in mid-October this year. And with peak shopping season, so too comes peak shipping prices. The peak season prices will be effective from October 18th- December 27.
Clients will see the increase in pricing to USPS Domestic services, Priority Mail and First Class.
Priority Mail: all zones and weights have increased by $0.40
First Class: all zones and weights have increase by $0.25
This will also affect the following international services, as they are multi-legged and rely on USPS services to provide the first-mile domestically. Shipments less than 1 pound use First Class as the first-mile provider, while shipments greater 1 pound use Priority Mail.
But will the increases be enough to #SaveTheUSPS? It’s unlikely, according to a study from Charles River economists Debra Aron and Justin Lenzo reviewed by Freightwaves. The economists said that “above-market increases at significant lower levels” wouldn’t be enough to please the Trump administration. Instead, it would be Big. This would essentially “divert most or all of the package delivery business from the Postal Service” to other couriers like UPS. UPS would then, hypothetically, have free reign to “substantially increase their own prices and still retain the entire market,” they wrote.
Easyship Analysis: It’s been a tumultuous year for the USPS, to say the least. The combined surge from the US presidential election and the holiday season, both of which will be making use of the postal service more than usual due to health concerns associated with in-person events because of the COVID-19 pandemic.
Still, merchants can rest assured that their deliveries will arrive to customers on time provided they follow the cut-off dates, leave ample lead time and communicate clearly with their customers. Plus, it seems that USPS is bulking up its seasonal staff ahead of peak season, taking cues from carriers like FedEX and UPS.
October 9, 2020
Peak Season is Here and Its Going to be Longer Than Ever
The beginning of October used to mark the beginning of Autumn. This year it will mark something different: The start of holiday shopping season, with Amazon Prime Day scheduled for October 13-14. Typically, the major eCommerce event is held in July, but it was rescheduled due to the uncertainty around the COVID-19 pandemic.
“Amazon is creating the 75-day peak season,” Carson Krieg, cofounder and director of strategic partnerships for Convey, told Freight Waves. Amazon did not respond to the outlet’s request for comment.
This year, Prime Day is expected to bring in sales worth $26 billion worldwide and $6 billion in the US, according to Axios. This effectively pushes forward 10% of sales from Thanksgiving, Black Friday and Cyber Monday by about a month, according to the outlet.
Revenue from eCommerce stores is predicted to increase by 90%, as people report a reluctance to shop in brick and mortar stores during the pandemic. The orders placed are predicted to be a mix of delivery in-store pickup. For more on Prime Day and what it means for eCommerce merchants, click here to read our full guide
Holiday cutoffs from DHL eCommerce and USPS
DHL eCommerce and USPS have announced cutoff dates ahead of the 2020 holiday season. The full domestic and international DHL eCommerce cut offs can be viewed here and USPS in their announcement here.
We’ll be sure to keep you posted about all the new courier cut offs as theycome in. After all, no one wants to receive an all-important package — especially one containing a gift — in mid-January when their co-worker White Elephant is going to happen over Zoom in December (don’t ask how).
Easyship Analysis: The competition is going to be stiffer than ever for eCommerce merchants this peak season. But, as any experienced seller knows, the key to nailing the holiday season is prepare — more and earlier than you think you need to. Ahead of the holiday season, your shipping policy should be ready for publication. Only then can you move on to other foundational planning like fortifying tech, stocking inventory and seasonal hiring of your own. This, combined with transparent, frequent customer communication and a watchful eye on logistics news will give you a competitive edge solely by virtue of attention to detail. After all, a BOGO sale is meaningless if the products ship on January 3.
Warehouse Demand Rides the eCommerce Wave
Demand, meet supply. Between Q1 and Q2, eCommerce sales made a significant jump: 32% which leveled off to $212 billion. But perhaps that’s not so startling, as people around the world remain home due to the pandemic with nothing but a credit card and internet access. While global eCommerce merchants rejoice, it has caused a bit of a disruption in the supply chain.
With a new need to grow rapidly to meet demands during the third quarter of, a need for warehouses reached a record-high in the UK during Q3, Marketwatch reported. This 111% increase in demand (across the pond, at least) starkly contrasts the downturn seen in commercial real estate.
So, how will the warehouse employees meet new deadlines during this extended surge. Well, 61% of warehouse operators say they plan to make use of technology with which to “augment” their employees, according to a recent Warehousing Vision Study. Moreover, and perhaps less dystopic, 77% of operators agreed that in order to meet the current demands, the warehouses themselves will need to be outfitted with modern tech and equipment, per TechRadar.
At a time where many remain privileged enough to work from home amid the pandemic, the US Bureau of Labor Statistics has recorded 1.25 million warehouse workers — more than before the pandemic. What’s more, the Wall Street Journal reported that warehousing and storage payrolls added 32,000 jobs, per the most recent figures from the BLS. This comes after an additional 34,400 logistics jobs were added in August.
On the whole, employment numbers in the US remain below the pre-pandemic threshold. At its peak this year, unemployment hit 14.7% in April. In September, it dropped to 7.9%, however that’s still nearly double February's rate of 3.5%.
Easyship Analysis: The economic impact of the coronavirus pandemic will have impacts on the supply chain and logistics industry for a long time to come. There's no doubt now that the shift to eCommerce has accelerated rapidly this year with every industry adjusting and moving up their long term plans. Warehouses play an integral role in the supply chain, so the moves these companies makes can give us further glimpse of where the industry is headed.
September 25, 2020
The Holiday Shopping Season Has Already Started (and that could cause delays)
It’s not even October yet, and 50% of Americans have already started their holiday shopping online according to a survey from payment solutions company Affirm.
Affirm found that seven out of 10 respondents are more likely to buy something on sale now, rather than wait for those discounted days around the Thanksgiving period. Experts attribute this shift in part to the growing popularity of e-commerce, with shoppers increasingly likely to take advantage of convenience over savings.
This early start to the season could be a sign of things to come according to consulting firm Alixa Partners.
"The traditional November-December holiday-season definition is meaningless this year — and, I would argue, for the future as well," Joel Bines, who co-heads AlixPartner's retail practice, said in the release. "For years now, holiday sales have been pulled forward earlier and earlier, thanks mostly to the explosion in online shopping. This, in turn, has led to such things as the diminishment of Black Friday, of door-buster sales and of many other traditions."
The early start to the shopping season might be an indication that we’re in for a busier season, which means that merchants need to be prepared, as some experts are predicting ‘there will be failures across every carrier.’
In order to prepare for the surge in e-commerce orders, some consulting firms are advising companies to diversify the number of carriers they work with, as well as to try and encourage customers to buy weeks in advance, instead of on historically busy periods like Black Friday and Cyber Monday.
Easyship Take: Obviously we fully agree that merchants need a multi-carrier solution to avoid potential problems. By providing customers with choice and full price transparency at check-out, they can mitigate any potential problems. But, there’s a lot of uncertainty in the air this season, and there are bound to be issues, there always are with logistics. So it’s best to make sure that you are prepared to communicate any issues with your customers so they understand what’s going on with their orders. The post-purchase experience, and especially tracking are critically important, so make sure you have your strategy in order.
Amazon Expands Delivery Stations to More Suburbs
Shoppers expect fast delivery, that’s not a secret. Amazon continues to build out their logistics and fulfillment infrastructure to meet the customer demand for same day delivery. According to Freight Waves, the eCommerce giant will open up 1,000 more delivery stations in American suburbs for hyperlocal logistics and delivery. The stations will be located in high-density neighborhoods to service same-day and 2-hour delivery.
Amazon’s plans will likely impact delivery partners UPS Inc. (NYSE:UPS) and the U.S. Postal Service (USPS), which on a combined basis handle the remaining one-third of Amazon’s traffic. In the future, UPS and USPS will mostly be called upon to support Amazon’s delivery surges, Jindel said. Still, UPS will get its fair share of Amazon’s volumes because they will grow so exponentially that it will be nearly impossible to self-handle it all, Jindel said. Amazon is UPS’ largest individual customer.
With the continued growth of eCommerce, last-mile logistics will continue to evolve as companies work to meet customer demand for faster delivery. Case in point, cosmetics retailer Sephora has partnered with Instacart to provide same day delivery in select metro areas.
“We’re always looking for unique, yet practical ways to meet our clients at every touchpoint. Now, more than ever, we know they seek ease and convenience. With our Instacart partnership, we can offer a new same-day delivery service option to our existing clients and also introduce some of the benefits of being a Sephora client to Instacart’s marketplace,” said Carolyn Bojanowski, svp and gm of e-commerce for Sephora.
So where are things going in the next few years? According to Cambridge Capital managing partner Ben Gordon, there’s a lot of opportunity ahead.
“Top 50 companies represent not more than 50% of the total market in last-mile logistics. Compare that to banking and finance, where the top eight control 90% of the market,” said Gordon. “Consolidation remains a winning theme. Cross-border trade and automation of that cross-border will remain a big opportunity.”
Easyship Take: Amazon has set an industry precedent that all others are going to have to follow. We expect there will continue to be further innovations with last-mile, we’re particularly interested in how green shipping develops. With our multi-courier network we’re able to provide hybrid-solutions utilizing regional couriers to meet these demands.
What is eCommerce anyway?
Observer asks an interesting question. Is it time to drop the 'e' in eCommerce? The argument goes that eCommerce has so saturated every aspect of the economy that it touches nearly every industry in some way.
The term ecommerce has, in recent years, swallowed up an array of functions that crisscross the digital landscape, including how we pay. Even so-called in-store shopping—as loaded as that term might be as we navigate COVID-19—has elements of ecommerce built into the retail experience. When you whip out your iPhone and pay for something using Apple Pay, you effectively made an online transaction even though you are physically inside a store.
In the end, nearly all aspects of modern commerce—particularly consumer-facing commerce—has some digital, electronic, or online element built into the shopping process, which begs the question: Is it finally time for us to drop the “e” from ecommerce?
Easyship's Take: The evolution of eCommerce has been exciting in a very challenging year. We've made huge leaps in adoption and innovation, and it doesn't appear to be slowing down, despite the economic challenges we're still facing. With all these innovations, there's no doubt that the way we talk about the industry will continue to evolve as well. We look forward to it!
September 9, 2020
Container Rates Increase as Ports See Surge in Activity
We’ve seen a GRI (General Rate Increase) from our ocean carrier since July which has impacted freight quotes by 5-10%. As the world opens back up, demand for goods has increased but carriers have been slow to add ships/sailings back to their schedules.
And now we’re starting to see this play out as west coast freight networks are ‘Bursting at the Seams’ according to the Wall Street Journal.
The tumult at the Southern California port complex, the largest gateway for U.S. imports from Asia, comes as retailers are scrambling to restock depleted shelves after months of lockdown while also bringing in goods for the holiday season. The activity marks a sharp turnaround from the spring when U.S. ports reported double-digit declines in imports of containers, which carry most retail and manufacturing goods into the U.S.
Freight railroads and trucking companies that sharply reduced their operations as the pandemic-driven downturn took hold in the spring now are struggling to get workers and equipment in place to handle the surge.
Over on CNBC, Jeremy Nixon, the chief executive officer of Singapore-based Ocean Network Express (ONE) offered his insights on the rise in demand.
He attributed the expected rebound to three main factors:
-a surge in demand for personal protection equipment (such as masks and gloves), and medical goods;
-inventory build-up during the shutdowns are returning online again;
-a shift in consumer purchasing behavior as people cut back on travel and hospitality and spend more time and money at home.
“What we’ve seen in the last two or three months, those items around the home — whether it’s home improvements or enhancements to people’s home offices, electronics or even exercise bicycles — we’re seeing that sector has really picked up, and a lot of that production actually moves in containers as opposed to air freight,” Nixon explained.
Easyship Analysis: As the economy springs to life during the holiday seasons, merchants need to pay close attention to logistics costs in order to properly budget. They should expect fluctuations and perhaps a steady rise in ocean freight costs until logistics companies come fully back online to meet the surge in demand.
It’s going to a tricky end to the year, and there will likely be some unpredictable developments that will add complications to the holiday season. The good news is that this is all probably a sign that consumers are eager to spend to bring a tumultuous 2020 to a close.
Couriers Going on a Hiring Spree Ahead of Holidays
To prepare for the expected onslaught of eCommerce orders, couriers are making a change of their own: Hiring, bigtime. FedEx announced Thursday that it will be hiring 70,000 additional employees, as the courier expects an “unprecedented peak holiday shipping season,” Forbes reported. The courier also said that beginning on September 13 Sunday delivery will be expanded to 95% of the US.
UPS is also planning to bring on 100,000 new employees to meet the demands, the Associated Press reports. The newswire noted that USPS hired just as many seasonal employees the last three holiday seasons. Last month, USPS said it added 39,000 additional employees for the April-June quarter to meet demands from the eCommerce boom related to the Coronavirus Pandemic.
To make up for lost revenue, UPS and FedEx will be hitting typically exempt big box companies with hefty shipping fees, Freight Waves reports. While the Targets and Walmarts are hit with fees between $3 to $4, mom and pop shops will be spared, Axios reports.
Caila Schwartz, a senior industry strategist at Salesforce Commerce Cloud, told Axios she believes the fees could hit $4.5 billion. Schwartz anticipates retailers may try to evade the hefty fees by offering alluring discounts for in-store pickup.
"All the traditional last-mile delivery carriers [like FedEx, UPS and DHL] will run out of capacity at some point in the season," Schwartz said. "So we anticipate that 700 million packages are actually at risk of being delayed this year."
Easyship Analysis: This is good news for merchants and sellers, but risks still remain, as there is a likelihood that there will be delays for some shipments. It’s time to start early and encourage customers to get their orders in early, especially those international shipments! We’re confident that if you focus on providing your customers with shipping choices, that you will be positioned to deliver your goods on time.
UPS Looking to Build a Fleet of 'Tesla-like' Cars
As the US’ west coast burns, it’s becoming increasingly evident that a climate emergency isn’t imminent — it’s happening now. And in California, where fires burned in the beginning of September, long-standing demands for green shipping are being heard, as there is still a coronavirus-related surge in eCommerce.
UPS, for example, envisions a fleet of “Tesla-like” cars comparable to “computers on wheels,” according to Reuters.
“For us, it’s not just about making the wheels turn with a zero-emission vehicle,” Scott Phillippi, UPS’s senior director of fleet maintenance and engineering, said. “It’s about an integrated-technology vehicle - and that’s really what we’re pushing for."
Both Amazon and UPS are interested in “green” vehicles and are working to develop their own tech, Reuters reports. Last year, Amazon ordered 100,000 electric vans from a startup called Rivian Automotive LLC (the eCommerce company invested in the LLC). In a press release, Amazon said some of the cars will hit the road in early 2021, with the full fleet out in 2022.
UPS has ordered 10,000 vans from Arrival Ltd, a UK-based startup it owns stock in, which they previously tested in Europe. UPS also ordered 125 Tesla Semis, per Reuters. The long-awaited X model was originally slated for production in 2019 and has since been delayed until 2021.
“Ultimately, there’s no trucks available yet,” Phillippi said. “We’re just waiting for vehicles to show up.”
Will these cars be a panacea for the climate crisis and eCommerce boom? That is yet to be determined but we’ll definitely be watching this story develop.
Easyship Analysis: We’re excited to see how the logistics industry continues to innovate, and we’re happy to be part of it. It’s an exciting time for the eCommerce industry, but as 2020 has demonstrated, there are going to future challenges that will need to be confronted, with climate change at the forefront. The last few years have seen innovations in last-mile delivery and as cities continue to evolve to become more resilient, the role couriers and shipping play will be critical.
August 28, 2020
Data Confirms the eCommerce Coronavirus Boom
There’s been some interesting data coming out about the rise in eCommerce so far this year. The US Census Bureau reports that “ecommerce retail sales for the second quarter of 2020 rose to $211.5 billion, up 31.8% from the first quarter and 44.5% from the same period last year.” And according to data from Salesforce’s Shopping Index, global revenue from online sales increased 71% year-over-year in the second quarter of 2020.
The boom is real, and has greatly accelerated existing trends.
“According to new data from IBM’s U.S. Retail Index, the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. Department stores, as a result, are seeing significant declines. In the first quarter of 2020, department store sales and those from other “non-essential” retailers declined by 25%. This grew to a 75% decline in the second quarter. The report indicates that department stores are expected to decline by over 60% for the full year. Meanwhile, e-commerce is projected to grow by nearly 20% in 2020.- Techcrunch
Now the big question remains if this acceleration is temporary due to the pandemic or if these trends will be sustained once brick and mortar stores open up again. The holiday season will be a real test for merchants and retailers, and according to Reuters the largest players like Target, Best Buy and Kohl’s are preparing for a shipping crunch due to increased eCommerce demand.
"We know that online shopping picks up over the holidays and the system is already pressed to meet that sort of demand," said Mark Mathews, vice president of research at the NRF. "If you've got a situation where you're adding another 10 or 20% to that, which is well within the realm of a possibility, that creates real challenges." - Fearing shipping crunch, retailers set earliest-ever holiday sale plans
Easyship Analysis: The key for merchants going into the holiday season is planning and looking for new ways to take advantage of the increased demand. CNBC spoke to eCommerce experts to get some insights on what sellers can do going into the holiday season.
“To succeed in e-commerce, you need to have the right assortment, then make things easy to find, purchase and get delivered. This is the genius of Amazon. But there are definitely opportunities to make online shopping more ‘fun’. Livestreaming is one. AR (augmented reality) and other means of enhancing utility is another,” Michelle Whelan, CEO of commerce agency Geometry U.K., told CNBC via email. - CNBC
Earlier in the year, we took a look at how merchants can take advantage of augmented reality to engage their customers. It won’t be appropriate for every seller out there but the holidays might be a good time to experiment. But first, you need to take care of the fundamentals, and that includes preparing for returns.
We just released a new guide on ‘Managing eCommerce Returns’ which can help merchants transform returns from a problem into a marketing advantage. We’ll have more resources in the coming weeks around the holiday season, so be sure to follow us on Twitter, Facebook and LinkedIn for updates.
Amazon Adds New Delivery Requirements for Seller Fulfilled Prime
Amazon announced some new changes that could have a big impact on delivery for small sellers. Sellers will need to meet specific delivery requirements, including offering weekend delivery if they want to retain the Prime label next to their products. As Bloomberg reported, this may be an effort to shift sellers away from the program, and into Amazon’s in-house fulfillment network.
At the same time, according to CNBC, “Amazon shipped 415 million packages in July, topping its three-month average between April and June.”
“Amazon is such a huge player in the e-commerce space, they have to manage their delivery themselves to handle the increased demand for online orders, especially during the pandemic,” said Satish Jindel, founder of ShipMatrix.
“They will continue to deliver more of their own packages, potentially reaching 80% of their own packages by next year. It means UPS and the [U.S. Postal Service] will be looking for more business to replace the Amazon business,” he said. - CNBC
Easyship Analysis: Amazon consistently optimizes their services for maximum efficiency and market share, so these latest moves are not surprising. But, there are still options for smaller sellers. Easyship is an FBA (2-day Prime) compatible service, so small sellers can continue to offer Prime shipping with third party providers like Easyship. We have no minimums shipping requirements and can support sellers during.
The Ongoing USPS Story
USPS postmaster general Louis DeJoy testified to the US Senate on the recent operational changes that have caused controversy around disruptions in service and possible challenges in supporting mail in voting for the November presidential election. CNN has six top takeaways from the testimony, with Dejoy admitting that there have indeed been service impacts.
"We all feel bad about what the dip in our service level has been," DeJoy told GOP Sen. Rob Portman of Ohio. DeJoy later told Homeland Security Chairman Ron Johnson that "a substantial portion" of the delays were due to the Covid-19 pandemic, while saying the USPS was working "feverishly" to erase the slowdowns.
"The only change that I made, ma'am, was the trucks leave on time. Theoretically, everyone should have gotten their mail faster," DeJoy told Democratic Sen. Jacky Rosen of Nevada, while acknowledging that hasn't been the case.
While DeJoy said he was suspending operations changes until after the election, he added he was not reversing the removal of sorting machines that lawmakers have raised concerns about.
"There's no intention to do that. They're not needed, sir," he told Michigan Sen. Gary Peters, the panel's top Democrat. - CNN
Easyship Analysis: It seems that this story has slowed down in recent weeks but with two months left before the election, the USPS is sure to stay in the headlines. For merchants, as always it’s important to provide your customers with delivery options and transparency around potential delays. We’re constantly updating our COVID-19 resources page so merchants can stay on top of any service disruptions and delays from couriers.
August 14, 2020
USPS Caught in the Political Crosshairs as Election Heats Up
The COVID-19 pandemic has upended so many aspects of daily life that it’s not surprising to see some of the impacts converge and snowball into bigger challenges. A perfect example is the United States Postal Service.
As we mentioned in our last update, the USPS has recently undergone operational changes in part due to the slow down in mail from the pandemic. These changes have started to cause sporadic delays in mail and package delivery. But what is driving this story and keeping it at the top of the news is the US election in November and the focus on mail-in voting.
Recode took a look at the issue and concluded: “delays and political connections aside, we don’t have much hard evidence of a Trump-led plot to overthrow the Postal Service.”
“The notion that the postmaster general makes decisions concerning the Postal Service at the direction of the president is wholly misplaced and off-base,” Partenheimer, the USPS spokesperson, told Recode. “With regard to election mail, the Postal Service remains fully committed to fulfilling our role in the electoral process when public policymakers choose to utilize the mail as a part of their election system, and to delivering election mail in a timely manner consistent with our operational standards.”
Easyship Analysis: Our focus is on the impact on small businesses and entrepreneurs. Since the COVID-19 crisis began in March, eCommerce has been a bright spot in the global economy, accelerating trends that have been in the making for years. The USPS is an important, affordable, reliable courier for many of our customers, so we don’t want to see an impact on their ability to deliver their goods to customers.
In Motherboard, a spokesperson for the USPS had this to say about the current challenges:
“We have taken immediate steps to better adhere to our existing operating plans, which were developed precisely to ensure that we meet our present service standards in an efficient and effective manner,” Partenheimer said. “Of course we acknowledge that temporary service impacts can occur as we redouble our efforts to conform to the current operating plans, but any such impacts will be monitored and temporary as the root causes of any issues will be addressed as necessary and corrected as appropriate.”
Thus far, we have not noticed an increase in complaints, but we remain vigilant.
FedEx and UPS Hike Rates Ahead of Holiday Season
UPS and FedEx will be raising rates for some deliveries ahead of the busy holiday season. The couriers have seen a surge in business due to the unprecedented demand for home delivery caused by the pandemic.
According to Bloomberg, UPS will increase rates by “$4 a package for shippers that send more than 25,000 parcels a week and whose peak-season volume is triple February’s level.” While FedEx will be increasing surcharges on select international routes, including Hong Kong to the United States by $1 per kilo. Look for additional holiday surcharges as well.
Easyship Analysis: As we’ve been saying since the start of the pandemic crisis, retailers and merchants should expect volatility in the market due to the disruptions in the supply chain and demand for delivery. The couriers are in good positions to raise their rates to meet the demand and offset costs from the logistics challenges.
Retailers and merchants face a competitive holiday season and will need to make tough decisions about raising prices on their goods or on shipping. These rate hikes may not impact small merchants too much but it's still critical to plan now so you can be prepared once the season picks up in full.
And of course, we’re here to help. With real-time rates at checkout, you can provide your customers with multiple shipping options so they can make the choice between cost and convenience. Creating a transparent shipping policy and providing your customers with choice is the best strategy, especially when there’s so much unpredictability in the market.
We’re optimistic it’ll be a great holiday season for online retailers and merchants and can’t wait to start shipping.
Kroger Opens New Marketplace for Third-Party Sellers
Kroger, the largest grocery chain in the country, announced that it’s expanding it’s online marketplace Kroger Ship to include third-party sellers. The service will be powered by French eCommerce company Mirakl, and will add thousands of new products to the marketplace for delivery, including international foods, toys, household staples, and other specialty items.
"The expansion of our Kroger Ship platform will continue to bring together our industry-leading customer insights and merchandising data to offer our customers a digital shopping experience that includes staples available in our physical stores as well as products that are exclusive to Kroger.com," said Stuart Aitken, Kroger's senior vice president and chief merchant and marketing officer. "As part of our continuing transformation, we look forward to accelerating the development of our e-commerce platform and providing our customers with even more choices."
Easyship Analysis: Marketplaces offer sellers and merchants new channels for their goods. Access to these large audiences is significant and can be valuable. There’s always a trade-off though in terms of branding and revenue. It will be interesting to see how Kroger competes with the behemoths of Amazon and Walmart with their established marketplaces.
July 24, 2020
USPS Operational Changes May Delay Deliveries
Mail and package delivery in the United States could start to experience increasing delays due to operational changes at the USPS. Memos sent from USPS leadership, detail changes to how packages are sorted and prioritized and will prohibit overtime and late trips.
The changes are due in part to the surge in package volume which has risen nearly 80% since May due to an increase in eCommerce shipping as a result of the COVID-19 pandemic.
Carriers have been instructed to sort packages in the morning for their routes, and need to return to the office by 2pm in the afternoon. Any unsorted mail, often first-class and priority mail, will be left for the next, which will cause delays in delivery. Previously, couriers would have the ability to return to the office to sort leftover mail, and then use overtime to assure it’s delivered the same day.
According to the Portland Press Herald, “delivery of first-class and priority mail is being intentionally delayed so that letter carriers can prioritize the delivery of Amazon packages.”
Easyship’s Analysis: These new changes at the USPS are another sign of major disruptions eCommerce merchants and consumers can expect in shipping logistics. The Universal Postal Union’s (UPU) recent decision to allow the USPS to set their own rates on inbound delivery will likely have a dramatic impact on shipping costs for international sellers shipping to the US market.
Merchants, sellers and third-party providers will need to continue to innovate to find ways to efficiently address operational and policy changes. There will likely continue to be more uncertainty due to the November Presidential election in the United States.
At Easyship, we understand uncertainty around shipping costs can be disruptive and have drastic impacts on the bottom-line which is why we’re driven to find solutions, like Flat Export Rate Shipping Options. Consolidating multiple shipping solutions into one discounted service allows merchants to use their own packaging and price shipping by solely weight of the package. You can learn more details about the service here.
Amazon Announces New Warehouse Storage Rules Ahead of Holiday Push
In a note to sellers, Amazon announced implementing new rules for the amount of inventory independent sellers can store in its US warehouses in preparation for the upcoming holiday buying season. The retail giant was hit with logistics issues during April and May from a surge in demand for essential products from consumers during the initial outbreak of the COVID-19 pandemic.
“Given the unprecedented challenges the COVID-19 pandemic has placed on all of us, we are preparing early to deliver a great holiday season for our customers and selling partners—building out capacity as quickly as we can so we can deliver products customers need and want directly to their doorsteps and help you continue to grow your business,” the company said in the statement.
Third-party sellers will have quantity restrictions placed on inventory which will impact all product categories. The company says most sellers with an Inventory Performance Index under 500 won’t run out of space and that “most products will have enough space available for over three months of sales.”
Easyship’s Analysis: Even small changes by Amazon have the ability to shake up the industry, and this is no exception. Inventory management is one of the most challenging aspects of running a successful eCommerce business, so any additional restriction can throw off strategies and impact the bottom line.
Hopefully, merchants will have a enough time to adapt before the holiday sales season kicks into gear. Going into 2021, merchants will need to re-evaluate their inventory and warehouse strategies in an increasingly competitive eCommerce landscape. In-house fulfillment comes with its own challenges, while other trends like the rise of on-demand warehousing provide new options.
Even with these new rules (and there assuredly will more in the future), FBA is going to be a compelling option for many eCommerce merchants hoping to scale their business.
BigCommerce Files for IPO; Bolt Raises $50 Million in New Round
eCommerce SaaS business BigCommerce has filed for an Initial Public Offering with the SEC. The company, founded in 2003, currently have over 60,000 customers with a revenue of around $112 million in 2019. The announcement comes during a year when eCommerce sales have surged due to the impact of COVID-19 on the retail industry, and rival Shopify has seen their shares nearly double.
Meanwhile, Bolt, a technology company providing checkout experience software, has raised $50 million in a new round of funding, with the goal of helping more brick and mortar retailers move into eCommerce due to consumer shifts in the wake of the COVID-19 pandemic.
Easyship Analysis: The BigCommerce filing is another indication that investors are optimistic about the continued growth of eCommerce in the coming years. With BigCommerce sunsetting their shipping services, there will be increased opportunities for more interconnectedness with third-party vendors such as Easyship.
Between Shopify, Magento, and BigCommerce, eCommerce businesses have great platform options for setting up and managing their store. The competition will force companies to continue to innovate and provide new tools for merchants to grow their business.
There’s no doubt we’ll continue to see rapid innovations from tech companies hoping to optimize different aspects of the eCommerce business. We’re excited to be apart of such a dynamic, fast-growing industry.
June 27, 2020
Amazon Offers Courier Services in the UK
Retail giant Amazon has moved into courier services by offering Amazon Shipping services to merchants in the UK. Though the retailer already offers logistics through its Fulfillment by Amazon service, this new service is noteworthy because it will allow retailers to ship orders from their own external online stores and other channels.
The new service will offer parcel pick-up and delivery seven days a week throughout the UK. Merchants will be able to access very competitive rates through Amazon Shipping; they will also be able to cut shipping costs since the service won’t charge extra fees for residential delivery, peak periods, or weekend deliveries.
Easyship’s Take: This is good news for UK-based online retailers, who will now be able to access very competitive shipping rates through Amazon Shipping.
It must be assumed that the company has leveraged its large network to create a service that will be highly beneficial for retailers and customers. Additionally, the new service will push existing carriers like UPS and FedEx to up their game in order to retain their share of the shipping business.
But, it remains to be seen whether Amazon Shipping will play out well in the UK. Amazon had to suspend its shipping service in the US because it couldn’t keep up with the surge in customer orders during the COVID-19 pandemic.
US Retailers to Face Increased Cross-Border Rates from July 1
Many American shippers will face higher cross-border shipping rates from July 1 as a deal reached last year by the Universal Postal Union (UPU) allows countries to self-declare postal rates. Ahead of the implementation, USPS issued new contracts in late May to consolidators, postage sellers, and other cross-border service providers like DHL eCommerce, FedEx Cross Border, and UPs Mail Innovations.
The new cross-border postage rates will be a combination of three different services, namely, the domestic postal service in the country of origin; the foreign postal service in the destination country; and the handling cost of the service provider.
While rates and exact timelines are still not crystal clear, it’s been estimated that the USPS inbound rate from China will increase by at least 100%, while shipping costs from the US to Canada will be raised by about 50%.
Thus far, 31 countries have set reciprocal rates for US-based shipments. This has led to a less standardized global postage structure since some countries have based their rates on the weight of the shipment, while others are using a tiered per piece system.
Easyship’s Take: There’s certain to be a lot of confusion around cross-border shipping rates going forward as countries begin imposing new fee structures. But one thing’s for sure - American retailers can expect to pay significantly more for international shipping, and these costs may be passed on to the end consumer.
China-US Air Freight Rates Begin Falling from Pandemic High
The COVID-19 pandemic created major supply chain disruptions, leading to falling air capacity from China to the US, and a subsequent spike in air freight rates when Chinese manufacturing picked up again in March. Now though, these rates have finally fallen, giving retailers some much-needed relief. Air-freight rates on China-US routes reached a peak in mid-May but finally fell nearly 50% to $5.10/kg on June 15.
However, rates are still well above what they were a year ago, and will likely continue to remain so. Many airlines have pivoted their passenger flights to offer more cargo flights, which has helped lower air freight rates.
But, with very low demand for passenger flights expected to continue for some time yet, and the rising cost of fuel making cargo flights less profitable, experts are predicting that capacity and rates will continue to be an issue.
Easyship’s Take: Unfortunately, it looks like the havoc wreaked by the COVID-19 pandemic won’t be rectified any time soon. It doesn’t seem like airlines will be able to regain their passenger or cargo capacity to pre-pandemic levels this year, and that means air freight rates will continue to remain high.
Retailers should expect to continue budgeting for this, while customers should be aware that they will probably end up paying more for shipping as a result of all this.
June 15, 2020
FedEx’s Chicago Operations in Disarray Due to Protests
On June 4, FedEx was forced to suspend its Ground delivery service in 16 zip codes in downtown Chicago due to ongoing protests. The protests broke out after George Floyd died in police custody; in response, Chicago’s mayor was forced to close roads, bridges, and implement curfews, which in turn caused problems with FedEx operations in the city.
Both FedEx and UPS issued statements on Wednesday that protests across the country have resulted in local restrictions that could disrupt services in many cities. FedEx further noted that disruptions would vary by location and service.
As of June 10, though, FedEx has resumed partial services in downtown Chicago but continues to warn that services are subjection to local conditions.
Easyship’s Take: With widespread protests breaking out across the country forcing mayors and governors to take measures to maintain some control and safety in their cities and states, it should come as no surprise that there would be some disruptions to a number of services, including postal services. It’s clear, though, that couriers are taking steps to maintain normal services as far as possible while being cognizant about the local situation.
Amazon Air Eyes Logistics Domination with Fleet Expansion
Amazon Air, the flight arm of the retail giant’s logistics service, is improving its capacity by adding to its fleet. The company announced on June 10 that it would lease 12 Boeing 767-300 planes, which will bring Amazon’s fleet total to 82 planes by the end of 2021.
The move is the latest in Amazon’s expansion of its air services. At an event in May, the company announced that it would open an AirHub at the Cincinnati/Northern Kentucky International Airport by 2021.
The end game here is to grow Amazon’s capacity to meet consumer demands. The company purchased its first plane to achieve one- and two-day deliveries but has now moved into offering same-day delivery. Having a dedicated fleet of planes will allow them to expand their speedy delivery services.
“During a time when so many of our customers rely on us to get what they need without leaving their homes, expanding our dedicated air network ensures we have the capacity to deliver what our customers want: great selection, low prices, and fast shipping speeds,” said Sarah Rhoads, Vice-President of Amazon Global Air.
Easyship’s Take: Amazon’s been dominating the world of near-immediate delivery services for awhile now, and this latest move will see it solidify its position as a logistics leader even further. It will be interesting to see what effect this will have on other retailers and couriers who want to stay competitive.
FedEx, UPS, Introduce Peak Surcharges
FedEx and UPS have both implemented peak surcharges on domestic shipments within the US as both couriers struggle to maintain operations during the COVID-19 pandemic.
FedEx’s new surcharges will apply from June 8 as follows:
- FedEx SmartPost: $0.40/package
- FedEx Express and Ground Residential: $0.30/package
- FedEx Express and Ground Oversize: $30/package
UPS implemented its new surcharges on May 31 at the below rates:
- UPS Ground Residential: $0.30/package
- UPS SurePost: $0.30/package
- UPS Large Packages (all service levels): $31.45/package
Easyship’s Take: With the COVID-19 pandemic resulting in more online orders, couriers have been hard-pressed to maintain their normal operations. These peak surcharges will help FedEx and UPS offset the cost of dealing with the volume of deliveries usually only seen at peak periods like Christmas. For retailers, the cost of these surcharges may add up quickly, resulting in their being forced to pass these on to customers.
May 29, 2020
Reef Technology x DHL Express Bring Eco-Friendly Deliveries to Miami
Reef Technology and DHL Express have teamed up to offer green last-mile delivery solutions in downtown Miami. The pilot program will see the courier use four of the tech innovator’s environmentally-friendly e-Cargo Cycles to deliver packages in the area.
Traffic has long been a concern in Miami, which is plagued with congested roads. The three-wheel bikes being used in the pilot program are expected to help reduce road congestion in the city while also furthering DHL’s goal of implementing more green delivery solutions across its network.
Easyship’s Take: Who doesn’t love to see big companies doing great things for the environment. Sure, three bikes might seem like small potatoes in the grand scheme of things, but what makes this exciting is the promise of a more eco-friendly logistics industry in the near future.
DHL has stated that it aims to have up to 70% of its operations handled by green solutions by 2025, and this is certainly a small step forward for the industry but a giant leap for the company.
USPS May Be Forced to Raise Third-Party Delivery Fees
The United States Postal Service may be gearing up to raise its rates for contract deliveries with companies like Amazon, UPS, and FedEx. Last month, President Trump said he would block a $10 billion emergency loan to the independent agency unless it raised its contract rates.
Trump’s reasoning is that the USPS undercharges these companies to handle their deliveries and wants them to charge “four times” its current rates. The USPS says that its rates are competitive and shouldn’t be raised. But changes within the postal service may signal that it’s caving into the President’s demands.
Louis DeJoy (yes, that’s the guy who was the finance chairman of the 2020 Republican National Convention) will be stepping in as the new Postmaster General on June 15. And, there are reports that USPS has been quietly talking to consulting firms to figure out appropriate rates for third-party contracts.
It’s another hit for USPS, which is set to lose around $13 billion by the end of the year as a result of a steep drop in personal and marketing mail due to the COVID-19 pandemic. It remains to be seen just how much the agency can withstand.
Easyship’s Take: Obviously, raising third-party prices is bad news for retailers and customers throughout the US. These rates may directly affect big companies such as Amazon or FedEx, but there’s no doubt that the price hike will be passed on. That’s when it’ll hit small businesses who rely on Amazon and FedEx’s contracts to ship, and customers, who will inevitably have to pay more for shipping.
Amazon Will Delay Prime Day in 2020, Due to Pandemic
It’s been quite the year for retail giant Amazon. The COVID-19 pandemic has caused a lot of upheaval for the company, from shutting down its warehouses in France, major shipping delays, and even having to limit its Fulfillment by Amazon service to essential goods. And now, it looks like it will have to delay Prime Day.
A hotly anticipated date on the eCommerce calendar, Prime Day is an annual shopping event typically held in July. On the day, Amazon Prime subscribers can take advantage of serious deals on the eCommerce platform. And, though it’s called Prime Day, the retail frenzy lasted 36 hours last year and could be even longer this year.
Now though, as Amazon works furiously to recover its pre-pandemic operations, it’s stated that Prime Day will probably be delayed to the fall. Insiders are saying Amazon is eyeing September as the key date, though there’s been no official confirmation so far.
Easyship’s Take: With everything Amazon’s had thrown at it by the pandemic, it’s no surprise that it wants to delay its busiest day of the year as it tries to spend the summer recuperating. But then again, Prime Day could be a significant cash injection for the company, which saw its net income fall 29% year-on-year. Certainly, people are buying online now more than ever, but perhaps Amazon worries that this year, it won’t be able to cope with the pressures of a mega sale.
May 8, 2020
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.
April 24, 2020
Amazon Begins to Loosen FBA Restrictions for Third-Party Sellers
If you’re an Amazon seller, you may have been blindsided by the announcement in March that the retail giant would prioritize essential items for its Fulfillment by Amazon service and stop allowing third-party merchants to send inventory to their warehouse.
The measures were a result of pressures from the COVID-19 pandemic and were always meant to be temporary and now, just a month after the initial announcement, comes the news that Amazon will begin accepting non-essential products from third-party suppliers at their warehouses again.
While Amazon will still prioritize essential goods like household and health items, baby supplies, and groceries, its warehouses will begin to accept limited quantities of non-essential products. However, exact details are still thin on the ground, so we don’t have a date for when this move will go into effect.
Easyship’s Take: Amazon’s FBA restrictions were a blow to third-party sellers who relied on the service to get their goods to customers around the world in a convenient way. Easing these restrictions will certainly help these sellers - most of which are small and have had to furlough or let go of employees to stay in business - get shipping again.
The real question though, is what does this mean? Some say it’s Amazon’s way of slyly signaling that the pandemic is slowly coming under control and that we will see some improvements. Or, it could just be that they realize that businesses need to continue to operate and they’re losing money by shutting off their FBA service.
Uber Adds New Services To Help During COVID-19 Pandemic
Ride-sharing company Uber has added two new services to help businesses and people move goods around while maintaining social distancing measures amidst the coronavirus pandemic. The two services are designed to help both retail clients and personal users.
Uber Direct is essentially an on-demand delivery service that will allow small businesses to send retail orders to customers within a local area. It will be a cheaper, faster way to move goods around a small geographic location.
Designed as a peer-to-peer package delivery service, Uber Connect is designed as a courier service for any personal user. It’s great for people to send care packages, supplies, and other items to friends and family within driving distance; it minimizes social contact but not social feeling.
The two services have been added to the full suite of Uber services, which includes delivery groceries via the Uber eats platform and an option for transportation personal protective equipment to healthcare workers
Easyship’s Take: Uber’s obviously recognized that the impact of the coronavirus has created a niche where it can do some social good. The services that have been added in the wake of the COVID-19 pandemic are useful to anyone that can access them - and they have the added benefit of boosting Uber’s reputation after it took a few hits in recent years.
UPS and Resilinc Partner to Shore Up Medical Supplies in the US
Atlanta-based courier UPS and AI-based supply chain monitoring service Resilinc have teamed up to help the healthcare industry during the COVID-19 pandemic. The partnership will address imbalances in supplies by locating and then delivering crucial medical items and personal protective equipment to frontline healthcare workers around the US.
Set to launch shortly, The Exchange at Resilinc is a cloud-based platform for the healthcare industry. By signing up, hospitals can connect with curated organizations to locate and borrow crucial medical supplies. Non-profits and approved companies will also be able to donate extra supplies through the system.
Hospitals will be able to submit requests for items that are in short supply. Once they’ve located an organization that can get them what they need, they can choose to use UPS’s expedited services or their preferred couriers to get the supplies to their hospital.
Easyship’s Take: Banding together is the only way we’re going to get through this pandemic in decent shape. And, with supplies being short in the US healthcare system, this may provide some crucial support to hospitals and frontline medical workers who are struggling with serious shortages. Overall, it’s a great thing and UPS is showing why it continues to be one of the world’s leading shipping services.
April 8, 2020
Couriers Implement Guarantee Suspensions and Temporary Surcharges, Cite Coronavirus Impact
By now, you’ll have heard that the COVID-19 pandemic has wreaked havoc on the world’s supply chains. Those effects have extended to global couriers and national postal services, who have been forced to suspend services and delay shipment times. A number of carriers have also been forced to suspend their service guarantees (due to delays in shipments) and introduce temporary surcharges. Here are some updates you should know about.
- On March 24, FedEx suspended its global Money Back Guarantee until further notice. The suspension applies to all FedEx Express, FedEx Ground, FedEx Freight, and FedEx Office services.
- At the same time, UPS announced that it would suspend its service guarantee indefinitely for all global services. The courier also said that air services would also experience delays.
- The UK’s Royal Mail announced that it would no longer be able to honor its 1 PM time guarantee for Special Delivery amidst the pandemic. It has also suspended service in over 30 countries.
- USPS will no longer stand by their guarantee of Priority Mail Express International mail sent to China and Hong Kong. The carrier has also suspended services in over 15 countries.
- Aramax is imposing temporary emergency surcharges in APAC.
- DHL has also introduced temporary surcharges globally - these are already being factored into Easyship’s rate calculations.
- UPS is also charging temporary surcharges which are being reflected in Easyship rates.
Easyship’s Take: Shipping is facing serious challenges thanks to the coronavirus pandemic. However, many couriers have declared themselves to be essential services and are trying to maintain normal operations as far as possible. To facilitate this, most couriers have been forced to implement a temporary emergency surcharge that will help them continue operating.
In addition, because of delays, government restrictions, and low cargo capacity, most couriers have also been forced to suspend their service guarantees because they simply aren’t able to meet delivery deadlines. Despite this, it’s admirable that they’re trying to ensure that goods are still getting around the world. If you’re looking for updates on courier operations, we’ve got dedicated pages for APAC, the US, and Europe.
Global Air Freight Capacity Falls for First Time Since 2017
The global air freight capacity has fallen for the first time in three years thanks to coronavirus impacts. Capacity fell 4.4% year-on-year in February, largely driven by flight cancellations in the APAC region which were caused by the COVID-19 pandemic. This drop was matched by a 1.9% year-on-year decrease in air freight capacity in the same month.
The drop can be seen largely in the Asia-North America trade lanes, which were down 2.4% year-on-year in February. Many airlines also cut their routes to Mainland China by up to 90%, which resulted in a significant drop in capacity. However, this can be attributed to factory closures (especially in China) and significant delays in warehouses and airports around Asia.
This drop in capacity has resulted in a big spike in air freight rates, particularly in China-US and Europe-US routes, as production began ramping up again in March. Rates rose by a massive 27% in March. The shipping price between China and the US rose from $3.49/kg to $5.83/kg - a huge 67% increase - in the space of a month.
Easyship’s Take: Air freight has become a serious concern in the face of the COVID-19 pandemic. With deep cuts to capacity and big spikes in rates, many companies are struggling to get their goods around the world - even Apple and Jaguar have been affected.
Unfortunately, this situation probably won’t be resolved until we see a resumption in passenger flights, which often carried significant belly capacity. However, many airlines are now using passenger planes for cargo flights, so we’re hopeful that there will be some mitigation of these effects soon.
US Suspends Import Tariffs Due to COVID-19 Pandemic
The Trump administration has announced its intention to temporarily suspend the collection of import tariffs. The 90-day suspension will apply to certain imports, including some clothing and light trucks, though details are still thin on the ground. However, what is clear is that the tariffs will be delayed rather than completely canceled - businesses will be required to repay them at a later date that’s yet to be determined.
This move follows the previous tariff exemptions that were applied to medical supplies and personal protective equipment that are much needed in American hospitals as they battle the coronavirus.
The move is intended to lessen the economic impact of the virus on American businesses by giving them more liquidity at this time. For example, apparel and footwear companies are often required to pay import tariffs that can range between 15%-30%. By delaying the payment of these tariffs, the companies would be able to use the ready cash now, potentially to keep people in jobs and pay overheads.
Easyship’s Take: The coronavirus pandemic has wreaked havoc on the American economy, and this tariff suspension will - hopefully - go some way to keeping American companies in business. During the first week of April, nearly 7 million people filed for unemployment in the US, a clear indicator that businesses are struggling to make ends meet in the current climate.
The idea of the tariffs is that, in the short term, companies may be able to use their cash reserves to keep employees on the payroll, pay rent on commercial properties, and take care of other overheads.
In theory, it’s a good idea, but it's hard to say what the effect of this tariff suspension will be. It also remains to be seen when and how the government will expect businesses to pay back the tariffs. It certainly won’t be immediately after the 90-day suspension lifts since it will take a while for businesses to get back on their feet.
March 27, 2020
Amazon Shipping Delays
It makes sense that amidst the global surge in COVID-19 cases, people around the world would turn to one of the world’s biggest eRetailers to safely stock up on supplies, especially if they’re in a government-mandated lockdown. But now, Amazon has announced that it will slow its deliveries of nonessential goods in France, India, and Italy in order to focus on getting essential supplies to those who need it. As yet, the move does not extend to the US.
According to the company, “essential supplies” include baby products; health supplies, household items; groceries; beauty and personal care; and industrial, scientific and pet supplies. All other types of products are still available through Amazon - they’re just not a priority for shipping right now.
This prioritizing of essential supplies only applies to Amazon sellers using Amazon’s fulfillment services, such as Fulfillment by Amazon. Third-party sellers on the marketplace can choose to use their own fulfillment and logistics services to continue delivering their products to customers.
Easyship’s Take: Given the panic-buying happening across the world, it makes sense that Amazon is having to prioritize certain goods to ensure that deliveries of essential supplies are made in good time. For customers, this just means you may experience delays in getting deliveries of your nonessential goods.
For sellers, you can get around this slowdown by using third-party services like Easyship to access affordable logistics solutions to get your goods to customers around the world with our network of over 250 courier solutions. Though, most couriers are experiencing delays (even with shipments exiting the US, Hong Kong, and Singapore).
H&M to Activate Supply Chains to Get More Pandemic Supplies for EU
Fast-fashion retailer H&M is sharing its purchasing operations and logistics capabilities with the EU in a bid to get more essential protective supplies to battle the COVID-19 pandemic. The brand has a massive network of suppliers, factories and logistics that could allow it to lend a much-needed hand; it has said that at this urgent phase, it will donate the supplies it can get.
Although H&M has shut down many of its stores in the last few weeks as a response to the pandemic, it still has access to its global network. In particular, the brand has suppliers in China, Bangladesh, India, and Vietnam that may be capable of producing essential protective equipment like masks, gowns, and gloves. These would then be transported to hospitals across the EU to protect those at the frontline of this health crisis.
Easyship’s Take: With COVID-19 cases skyrocketing past 400,000 across the world and hospitals in hotspots in Italy, Spain, and the UK already being pushed to their limits, it’s clear that essential personal protective equipment will be in great demand in the days ahead.
Many companies with manufacturing capabilities, including fashion conglomerate LVMH and alcohol brands Pernod-Ricard and Bacardi, have turned their hands to creating hand sanitizer, while others - like Rolls-Royce - have been asked to assist in making more ventilators. With its massive global network of suppliers, manufacturers, and logistics capabilities, it makes sense that H&M would step in where it could - providing protective “accessories.”
American Airlines, United, Move to Cargo-Only Flights
US-based American Airlines and United Airlines have both announced that they will move to operate cargo-only flights between the US and Europe. The decision comes as both airlines have been forced to cut passenger routes and ground their fleets of aircraft. The move to cargo-only flights will boost air freight capacity which fell dramatically amidst the COVID-19 pandemic.
American Airlines’ first cargo-only flight in over 36 years was a Boeing 777-300 that went from Dallas to Frankfurt, Germany, on March 20. It carried medical supplies, military mail, electronics, and eCommerce packages. United’s first cargo-only flight was on March 19 and flew from Chicago to Frankfurt; the carrier will continue to operate 30 freight flights from its US hubs to key international cities. This follows other airlines - such as Delta, Lufthansa and Virgin- who have already begun freight routes using passenger airplanes.
The massive drop in airline passenger routes resulted in an accompanying drop in air freight capacity, which normally flies in the belly of commercial flights. As a result, air freight rates between the US and Europe have spiked from €1.62/kg on March 16 to €3.39/kg on March 23. This mimics the price hikes seen in air freight between the US and China which occurred two weeks earlier, as Chinese factories went back online.
Easyship’s Take: The coronavirus pandemic has wreaked havoc on the airline industry. Early on, many international carriers cut routes to Mainland China by up to 90%; as the pandemic spread, they were forced to make bigger cuts to international passenger routes, especially once countries around the world began closing their borders to foreign arrivals.
So, it makes sense that these airlines, instead of bleeding money with grounded plans and staff, have decided to help global supply chains keep moving by putting on cargo-only flights. It’s a win-win from any side: important trade and supplies still get around, and the airlines begin to recoup just a fraction of the money they’re losing with the pandemic.
March 13, 2020
Amazon Warns of Delays That Could Be Result of Virus Fears
It may be one of the biggest eRetailers in the world, but even Amazon’s not immune to the far-reaching effects of the coronavirus. On Monday, the company warned that its Prime Now and Amazon Fresh deliveries have limited availability. Translation: we’re experiencing delays.
While the retail giant hasn’t exactly confirmed that the coronavirus was the culprit behind its supply issues, it’s not a stretch to believe this is the case. It’s been reported that deliveries of bottled water have seen a huge uptick in recent weeks.
And, with Prime Now and Amazon Fresh offering convenience store necessities and groceries, it appears that panicking customers who are stocking up for doomsday are throwing a spanner in Amazon’s fulfillment capabilities.
Easyship’s Take: Given the panic-buying happening across the world, from Hong Kong and Japan to Australia and Italy, it should come as no surprise that American consumers are taking to Amazon to stock up in case of short supplies or quarantines.
But we’d like to take a minute to remind everyone to keep calm and carry on. While there’s nothing wrong in filling your pantry just in case, it's important to remember that everyone needs supplies and you shouldn't buy more than you need to see you through a potential quarantine.
H&M Opens Its Supply Chain to Encourage Sustainable Fashion
Fast-fashion retailer H&M is leading the charge for sustainability in fashion by opening its supply chain to smaller retailers. The Swedish brand is trialing a new subsidiary - a consulting service called Treadler - that will support smaller businesses in accessing sustainable solutions.
Through Treadler, smaller fashion brands will be able to access a range of sustainable supply chain options running from product development and sourcing to production and logistics. This will include sourcing optimization, fact-based pricing, physical and chemical quality checks, and shipping.
Perhaps most importantly, Treadler will help these small companies find sustainable order management, shipping, customs, and warehouse delivery options. Since shipping is a major polluter, this can only be a good thing for our environment.
Easyship’s Take: This is a great step in the right direction for the fashion industry. We already know that fashion is one of the biggest polluters and coupled with the shipping impact, this has the potential to make some serious changes for the world.
But it remains to be seen how much of an effect this will have. At the moment, H&M’s supply chain has 57% recycled or sustainably-sourced materials and 97% recycled or sustainably-source cotton. It’s good - and passing this on will be even better - but there’s still room for improvement.
Air Freight Rates Spike as Chinese Manufacturing Resumes
The spread of the coronavirus caused an unprecedented slowdown in manufacturing in China and saw a significant drop in air freight capacity as airlines cut passenger routes due to low demand. Now, although China’s factories are resuming operations and producing goods that need to be sent to other parts of the world, air freight capacity is still low as airlines haven’t resumed passenger routes. The result? A huge jump in rates for air cargo.
In February, air cargo capacity out of China was down 39% compared to last year because of the shortage of passenger flights. Since a large number of air shipments are made in the belly of commercial flights, there’s now not enough space to meet the demands of shippers who want to get their China-manufactured products to other countries quickly. As a result, prices for air freight leaving China have skyrocketed. On China-US routes, the price has risen nearly 27% to over $3.50/kg.
Easyship’s Take: The good news is that supply lines are beginning to open up again after a major contraction during the month of February, so if you were manufacturing goods in China and hoping to get them to other places, you’ll be relieved.
However, it doesn’t look like commercial airlines will be putting its passenger routes back on just yet, so you may be stuck with inflated air freight rates for the time being. It may be worth temporarily looking into other solutions in the interim - DHL and other couriers are slowly beginning to put on more freighter flights and may offer some more cost-effective solutions, and you can access many of these through Easyship.
February 28, 2020
Rising Shipping Costs Could Force Amazon to Hike Prime Price
It’s safe to say that Amazon is a giant in the retail world - but could it be a victim of its own success. More than 150 million people around the world are using Amazon Prime - up by 50 million from the year before - and many of these are using it for its fast delivery services.
As a result, the retailer saw a corresponding rise in shipping costs, which jumped 37% to $37.9 billion over the previous year. Experts predict that this could push the company to raise its Prime membership prices to offset these costs.
The cost of a Prime membership was already raised from $99 to $199 a few years ago. But that may not be enough now. It’s not hard to do the math. Even if all 150 million Prime members are paying the full fees (they’re not) that would only amount to some $18 billion - far less than Amazon’s annual shipping costs.
Net result: Amazon may have no choice but to raise its Prime membership fees again if it’s going to continue to offer customers lightning-speed delivery options.
Easyship’s Take: Nobody ever likes to see higher prices. But let’s not forget that Amazon is, first and foremost, a business - which means money is the bottom line. If customers continue to demand fast shipping options, Amazon may well raise its Prime fees to protect its profit margins - and customers will just have to pay the price. However, the company could also choose to offset some of its shipping costs to retailers, which means Amazon sellers may also end up paying more to use the platform.
The Coronavirus is Beginning to Affect US Exports to China
Forget the trade war - right now, it’s the coronavirus that’s causing problems for US exports to China. Cargo backlogs in Chinese ports and reduced sailings by ocean freight carriers are now impacting American supply chains - especially in the food industry.
With China shutting down manufacturing because of the coronavirus, supply chains within the country have slowed significantly, resulting in many ocean carriers increasing their blank sailings and reducing capacity on routes out of China.
As a result, many American exporters are seeing their cargo stuck at various points in China, from domestic marine terminals and truck yards to refrigerated warehouses and inland destination points.
This is having a domino effect on the US. Because fewer ships are sailing from China to the US, there are also fewer ships going from the US to China. That means American exporters - especially in the agriculture industry - are finding an ominous shortage of ocean carrier capacity to get their goods to China. For example, the Port of Virginia reported a 27% drop in the number of empty containers for exports in January.
Complicating the issue for American agricultural exporters is the fact that many Chinese marine terminals lack refrigeration facilities. Normally, refrigerated shipments are quickly moved on from these marine terminals by trucks and trains. But with China’s current restrictions, the transport links have been hindered, which could spell problems for US exporters.
Easyship’s Take: It’s already become clear that the coronavirus is going to have significant effects on the shipping industry - and indeed, the global economy at large. However, this particular issue could get complicated. Both China and the US are heavily reliant on trade between the two countries and problems with shipping on these trade routes could cause a lot of problems for businesses in both countries as supplies sit in holding patterns in ports.
More generally, it could result in shortages in both countries that affect a wide range of industries. If you want to stay on top of things, we’ve got a page with daily analysis and updates and a guide to maintaining your shipping lines amidst the impacts the coronavirus is having.
FedEx to Begin Using Ground for Last-Mile of Express Shipments
FedEx has announced that it will begin transferring Express parcels to its Ground service for the last mile of delivery. The move is an attempt to consolidate its delivery services and reduce the number of Express and Ground trucks working on the same routes.
The new approach is set to kick off in March in Greensboro, North Carolina, before being rolled out to other markets. The goal is to increase efficiency and save costs by optimizing delivery routes. By consolidating its last-mile delivery, FedEx is also hoping to capture a bigger share of eCommerce parcel volume; residential eCommerce is the fastest growing market for the carrier.
Easyship’s Take: At the moment, it looks like there’s plenty of good things to come from this news. The consolidation of truck routes on the last mile of these two service options will certainly be a good thing for the environment. And, if FedEx can indeed lower its costs by doing this, they may be able to pass on the savings to retailers (read: you may be able to save some money when sending your packages).
The only downside could be if the move impacts Express service features. Since it’s a more premium service than Ground, people pay more to access better features - if these features are impacted in any way by the change in last-mile delivery, it could cause grumbling from customers and retailers.
February 14, 2020
The Coronavirus Hits Logistics
The 2019 novel coronavirus - now officially named COVID-19 - is wreaking havoc on the global logistics industry. With shipping companies reducing the number of seaborne vessels going in and out of China in a bid to reduce the spread of the virus, trade routes between China and the rest of the world are being cut. In shipping alone, the coronavirus is already responsible for $350 million in losses each week.
With some 80% of the world’s goods being traded by sea and China home to seven of the world’s 10 busiest ports, experts predict that global shipping will experience a significant slowdown - and that there will be a backlog of goods. In fact, athleisure clothing producer Under Armour has announced that it expects to take a $50-$60 million hit during the first quarter of 2020 as a result of shipping delays.
In addition, many ships are being kept in a holding pattern, unable to dock in countries like Australia and Singapore until their crew has been declared virus-free.
Add to this the fact that many international couriers are reducing their Asian routes - and that the USPS has announced that it won’t accept mail destined for (or transitting through) China, Hong Kong or Macau - and it quickly becomes clear that the world’s logistics industry is already taking a hit.
Easyship’s Take: Unfortunately, there’s no upside to this just yet. In just a few weeks, the coronavirus has already impacted various industries and is set to have global economic repercussions the likes of which we haven’t seen in decades. We want to make sure you always have access to the latest information so you can brace for impact, so we will continue to share updated information through our blog regularly.
Toll Group Possibly Hit by Cyberattack
Toll Group, a major Australian transport and logistics company, announced over the weekend that may have experienced a cyberattack and has shut down a number of its IT systems in response.
As a result, several customer applications are currently down. The company has so far refused to release more details about the incident but says it’s working closely with cyber experts around the world to resolve any issues.
Toll currently serves 50 countries, many of them in the APAC region. The company offers a range of global express, freight forwarding, and logistics services.
Easyship’s Take: This could be bad news for Toll customers. At this stage, there’s no information about what systems have been breached, so it could mean that customer data could be at risk. In addition, customers won’t be able to use a number of Toll systems, which means they may need to find alternative options.
Canada National Railway Experiences Another Shutdown
The embattled Canada National Railway is suffering its second shutdown in recent months as indigenous Tyendinaga Mohawk protestors block railway tracks to protest a natural gas pipeline proposal that would cut through their traditional lands.
The company has had to shut down its Toronto-Montreal and Toronto-Ottowa passenger routes due to the blockade, canceling over 150 trains. Perhaps more importantly, the shutdown is also affecting trade routes and could result in serious economic consequences if consumer goods and essential supplies continue to be held up.
Easyship’s Take: Things could get dicey if the blockade doesn’t end soon. The railways are a major lifeline for Canada, transporting essentials like fuel and agricultural goods across the country and it could be problematic if supplies continue to be cut off. Of course, the blockade also means that passengers, mail, and consumer goods aren’t getting to where they need to be.
January 2, 2020
New China-Russia Partnership Will Facilitate Cross-Border eCommerce
Two of the biggest postal services in the world - Russia Post and China Post - have agreed on a new logistics service that will make shipping small traceable packages between the two countries much easier.
Called cPacket, the joint development is the latest effort by the two countries to smooth the way between the world’s manufacturing hub and its biggest market. Shipments by cPacket will be handled by RP Logistics, a China-based Russia Post subsidiary. It will be bolstered by a new aviation logistics scheme.
Easyship’s Take: This is great news for online retailers in China and consumers in Russia. The new service will allow China-based retailers to easily make fast deliveries to Russia which can drive sales from the massive neighboring market. Similarly, Russian consumers can expect faster deliveries from a more stable shipping option.
Europe Threatens to Regulate Shipping Carbon Emissions
The European Union will propose a unilateral law to curb shipping carbon emissions. The proposal could have huge ramifications across the shipping and logistics industry.
In a speech delivered at the United Nations Climate Conference (CO25) on December 2, the President of the European Commission, Ursula vonder Leyen, made clear that the EU is taking big steps to protect the environment and stop climate change. She said that the European Green Deal, which was presented on December 12, will propose the first-ever European Climate Law to extend emission trading to all relevant sectors, including transport. The proposal is due to be made in March 2020.
Of course, this type of initiative was first floated in an International Monetary Fund (IMF) white paper in 2018. And with the sluggishness of both organizations, and a big doubt over whether all EU countries would vote in favor of the law, it remains to be seen whether this law comes into effect.
Easyship’s Take: We love hearing about anything that’s good for the environment and can make inroads into slowing climate change. But this unilateral law remains a big if. If it does pass, it will take a long time to come into effect and for shipping companies to comply. Higher costs are the main consideration here. Shipping companies will have to pay more to make changes to their fleets; these costs will be passed onto retailers, who will then be forced to pass them on to consumers. Overall, it might be a win for the environment, but it’s a lose-lose situation for the average punter.
Shipping Delays as Tankers Switch to Eco-Friendly Oil
The worldwide shipping industry is facing significant delays as tankers scramble to make the long-anticipated switch to environmentally-friendly marine fuels.
Mandated by New International Maritime organization (IMO) rules - better known as IMO 2020 - the move aims to make shipping greener by preventing ships from using fuels that contain more than 0.5% sulphur unless they’re equipped with exhaust-cleaning systems called scrubbers. The rule means that from January, most ships will have to load low sulfur fuel oil (VLSFO) or expensive marine diesel.
The regulations have been on the radar since 2016, but of course, no one’s taken much notice. That means oil producers and shippers are battling to make the switch over the next few weeks, creating total chaos.
Only a minority of ships currently have scrubbers installed. In addition, producers of VLSFO and marine diesel haven’t quite managed to produce enough of the necessary fuel - or the means to transport it to shippers around the world. The result? Shipping delays across the world.
Easyship’s Take: Delays are never good, and the shipping industry is going to have to find a way to solve the problem, quickly. Delays are currently estimated to be 10-12 days in Singapore, Brazil, Gibraltar and Malta, and a week in Middle Eastern ports like Fujairah. Of course, this means you’ll want to plan ahead if you’re going to be doing some shipping soon. Plan well ahead to make sure you won’t face any issues caused by these delays.