New York (Associated Press)-Retailers and carriers are preparing for an online holiday shopping boom, which may burden the transportation network and cause delays in delivery.
While FedEx and UPS expanded their weekend and holiday operations, they increased the number of recruits during the holidays and required retailers to use their transportation network during their leisure time. Stores are urging shoppers to buy early and are expanding services such as curbside pickup to minimize delivery needs.
In the past few years, in addition to distribution centers, many retailers have also used their physical stores to complete online orders. But now, they are designating some of these stores to handle larger quantities. For example, Best Buy switched spaces in 250 of its 1
Walmart, the largest retailer in the United States, announced on Thursday that it will free up space in 42 regional distribution centers to build “pop-up” e-commerce distribution centers to meet the strong demand for online orders this holiday season.
The reason for this move is that during the pandemic, most shoppers have shifted their purchasing power online, leaving most carriers with full capacity for several months.
Brie Carere, FedEx Chief Marketing and Communications Officer, said: “We are warming up for the so-called “smooth wind”. “Like everything else in 2020, this will be an unprecedented peak season. In fact, we have seen e-commerce growth. Three years. Therefore, we look forward to large shipments.”
UPS Chief Executive Carole B. Tome told analysts last month that she expects a “quite peak”.
Amazon has been developing its own delivery network, so it does not have to rely too much on UPS and the U.S. Postal Service, but it still warns shoppers not to wait until the last minute to buy gifts. Although the world’s largest online retailer provides more than half of its packages, it still relies on other operators to place orders with shoppers.
Amazon CFO Brian Olsavsky said: “Everyone will be nervous, and all of us will be in a state of tension.” It is favorable for placing orders at the beginning of this year.”
ShipMatrix President Satish Jindel (Satish Jindel) will analyze shipping package data. He predicts that every day from Thanksgiving to Christmas, 7 million packages may be delayed every day. This is because he estimates that in 34 days, the industry’s total daily transportation volume is 79.1 million packages, of which 86.3 million packages are looking for space. Last year, the total capacity was 65.3 million bales, and the daily demand was 67.9 million bales.
Currently, Jindel expects the delivery delay of packages to be one to two days.
AOL holiday sales are expected to break the previous record. Adobe Analytics, which measures the sales of 80 of the top 100 online retailers in the United States, predicts that total online holiday sales will reach $189 billion, a 33% increase from last year. This is equivalent to pushing two-year holiday e-commerce sales growth to one quarter.
However, even with the surge in online transaction volume, overall holiday sales are expected to increase only slightly compared to recent years. Consulting firm Deloitte expects total sales, including online sales, to increase by 1% to 1.5% between November and January. According to an analysis by the National Retail Federation, this compares to a 4.1% increase during the period of November and December last year. The trade organization said it won’t be able to make predictions until this month, given the uncertainty.
Retailers can’t afford to worry about delayed delivery or gifts after Christmas, so they are stepping up their efforts.
Cole said there are tens of thousands of items on its website available for roadside pickup. The retailer has doubled the number of self-driving parking spaces in its store locations to support growing demand. Similarly, Target also doubled the number of parking spaces for its drive-by service to 8,000.
At the same time, carriers have increased holiday surcharges for certain packages, which has dealt a blow to retailers who have already suffered from higher costs during the COVID-19 period. Kindler said that the U.S. Postal Service has become a good choice for retailers because it has achieved success through a large number of postal votes during the election. He estimated that most of the temporary surcharges charged by the post office are between 25 cents and 40 cents per package, which is much lower than the major carriers’ 1-5 US dollars per package.
U.S. Postal Service spokesman Kimberly Frum (Kimberly Frum) said: “Our network is designed to handle temporary and seasonal increases in numbers, and to provide these additional vacation packages in a timely manner.”
During the holidays, FedEx hired 70,000 workers, while UPS was struggling to hire more than 100,000 temporary employees.
Lee Spratt is the Americas CEO of DHL’s e-commerce solutions division, which specializes in handling small packages for medium and large shippers. He predicts that compared with the same period last year, online shopping this year will increase by 50% during the holiday. Since the beginning of the pandemic, the department has been struggling to process 40% of online orders.
Currently, the company has employed 900 permanent workers, while the current labor force is 3,000. It will also hire 1,400 temporary workers, roughly the same as last year, because the company will invest in more permanent workers.
In September and October, it also upgraded and in some cases added new sorters in 6 major cities including Baltimore and Atlanta to handle more packages.
Associated Press retail writers Alexandra Olsen and Joseph Pisani of New York contributed to this report.
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