Industry News

Logistics & eCommerce News Update: March 27, 2020

Learn more about Amazon's Shipping delays & how major brands are revising their strategy to fight the impact of the coronavirus pandemic.
Logistics & eCommerce News Update: March 27, 2020
Gayatri Bhaumik

By Gayatri Bhaumik

 

March 27, 2020

Welcome to our latest eCommerce and logistics news roundup!

This week, we’re discussing how global companies are reacting to the spread of the COVID-19 pandemic. Amazon shipping delays: the giant is slowing its delivery of nonessential goods in certain countries; H&M is in talks with the EU to see if it can source essential personal protective equipment for European hospitals; and US-based airlines are turning passenger planes into cargo flights.

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

Amazon Shipping Delays

Amazon’s response to COVID-19

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

Logo of fashion brand H&M which is trying to get more pandemic supplies

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

American Airlines planes now operating 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.