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Logistics & eCommerce News Update: October 23, 2020

In our latest roundup, we take a look at new Canada import tax changes, warning signs for the holiday season, and innovations in eCommerce.
Logistics & eCommerce News Update: October 23, 2020
Jules

By Jules

 

October 23, 2020

Welcome to our latest eCommerce and logistics news roundup!

This time around, we bring you updates on taxes and imports between the US and Mexico to and from Canada. Once we get those formalities out of the way, you’ll find that everything is Covid. As it has been seeming since March 2020, as it will be for the foreseeable future. We get into why there’s trouble ahead for holiday shipping, as supply meets demand, the existential question of what the future holds in the way of “new retail” (hint: it looks a lot like old retail) and take a look at eCommerce numbers from 2020 so far. Keep reading for the latest in the logistics world and for Easyship’s hot take on it all.

Update
Photo by Markus Winkler / Unsplash

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%