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The Roundup: USPS Caught In Election Battle, UPS & FedEx Rate Hikes, and Kroger Expands Marketplace

This week we're discussing the continuing USPS crisis, UPS and FedEx rate hikes and Kroger's marketplace move. Read our full analysis below.
The Roundup: USPS Caught In Election Battle, UPS & FedEx Rate Hikes, and Kroger Expands Marketplace
Jules

By Jules

 

August 14, 2020

Welcome to our latest eCommerce and logistics news roundup!

We're in the middle of a hot and humid summer in the United States and already we're getting a glimpse of a potentially volatile fall and winter which will likely be one of the most consequential in recent memory.

The United States election will dominate the news cycle but there's sure to be plenty of stories and conversation around the holiday shopping season as well. Will the eCommerce boom continue into the holidays? Will more brick and mortar shops open their doors for shoppers?

Of course, the wildcard is still the COVID-19 crisis. Experts are warning about a difficult fall with the potential for an uptick in COVID cases that could potentially overwhelm the healthcare system again, especially with the arrival of flu season.

We're already getting a preview of what might be to come. The USPS is caught in the middle of a political battle and finds itself a key player in the upcoming election, while still struggling to meet the surge in delivery demand from the pandemic. UPS and FedEx are raising rates to offset their costs from the demand while grocer Kroger opens up its marketplace for third-party sellers.  

And, in case you missed our last logistics roundup, you can still read it by heading over here.

Person reading a newspaper
Photo by Roman Kraft / Unsplash

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.

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