Industry News

Logistics & eCommerce News Update: July 24, 2020

This week we're discussing the USPS operational changes, Amazon's new warehouse restrictions and the BigCommerce IPO. Read our full analysis below.
Logistics & eCommerce News Update: July 24, 2020
Bryan Formhals

By Bryan Formhals

 

July 24, 2020

Welcome to our latest eCommerce and logistics news roundup!

This week, we’re discussing the news about new USPS operational changes that may delay deliveries; Amazon’s new warehouse restrictions, and big news from BigCommerce and Bolt.  

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

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.