Carriers are preparing for a higher holiday volume in the US, with e-commerce sales expected to be a major contributor to this holiday season’s parcel volumes.
Whilst FedEx and UPS have already in place peak holiday surcharges; this year, they are joined by other carriers like USPS and OnTrac who are implementing holiday surcharges for the first time due to the surge in e-commerce sales during the first half of 2020.
“This time-limited adjustment will increase prices for our commercial customers in line with competitive practices without impacting customers at the retail level,” USPS said in a statement. By doing so logistics companies hope to safeguard consumers’ shopping experience by minimizing the possibility of delivery exceptions due to limited capacity.
According to a report by the US Census Bureau, e-commerce sales in the US increased by 44.5% as compared to the second quarter of 2019. Indeed, according to Brian Bourke, chief growth officer at SEKO Logistics, customers have reported peak-like volumes throughout the pandemic.
“But the unknown is how much the holiday season will add to this existing and prolonged surge in growth,” — Brian Bourke, Chief Growth Officer of SEKO Logistics.
Nevertheless, the implementation of peak season surcharges is a temporary solution and carriers will still need to find a longer-term solution to better manage capacity requirements amidst today’s e-commerce boom.
This holiday season is shaping up to be a very interesting one – high volumes, tight capacity, and rising surcharges – While the winners will likely be the big retailers, Amazon, Target, and Walmart, how well the rest of the retail market does will be a big question. Meanwhile, for consumers, the question will be will they receive their presents on time? There are still a lot of unknowns as we head towards the holiday season. — Cathy Morrow Roberson, Logistics Trends & Insights, JOC Senior Contributor
For the full analysis by Cathy Roberson, read the article at this link.
About Cathy Roberson, Logistics Trends & Insights LLC
Cathy Roberson is a senior contributor at JOC covering parcel, air cargo, and last-mile and reverse logistics, and also the founder and head analyst of Logistics Trends & Insights LLC. She has more than 15 years of experience in the logistics market, including 10 years with UPS Supply Chain Solutions and several years with specialized consulting firms. In addition to being quoted in numerous publications, Roberson has published numerous articles in various business and logistics publications and speaks regularly at industry events.
The Journal of Commerce (JOC) is a biweekly magazine published in the United States that focuses on global trade topics first published in 1827.