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Logistics & eCommerce News Update: October 9, 2020

In this weeks round up we're discussing USPS rate increases, an early start to the holiday rush, cut off dates from USPS and DHL eCommerce, plus the warehouse boom.
Logistics & eCommerce News Update: October 9, 2020
Jules

By Jules

 

October 9, 2020

Welcome to our latest eCommerce and logistics news roundup!

With Amazon Prime Day right around the corner, signaling the earliest-ever peak season featuring a highly anticipated presidential election in the US.

And of course, at the center of all of this is shipping. As people around the world continue to lay low due to the ongoing COVID-19 pandemic, eCommerce is up — way up. This holiday season, online sales are expected to grow by 30% compared to 2019. But will couriers be able to meet the logistical demands? Only time will tell.

This time on the round up, all eyes stay fixed on the USPS. We also delve into all-things holiday season including Prime Day, shipping cutoffs and trouble brewing in international fulfillment. Let’s get into it.

Aerial view of a forest road
Photo by Aaron Burden 

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.

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.

DHL eCommerce Shipping Deadline
SmartMail Expedited Max Thursday, December 17
SmartMail Expedited Tuesday, December 15
SmartMail Ground Friday, December 11
USPS
USPS Retail Ground service Tuesday, December 15
First-class packages Friday, December 18
Priority Mail service Saturday, December 19
Priority Mail Express Wednesday, December 23

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.