How a Year of COVID Affected Australia’s E-Commerce Logistics
A year ago, we examined the effects of COVID-19 on Australia and found that the surges in e-commerce shipment volume had put a strain on the logistics industry. On the other hand, the delivery success rate increased over the period from March to May 2020, as a positive effect of the lockdown.
Whilst many cities in Australia were easing out of lockdown in the second half of 2020, Australia soon faced another wave of pandemic outbreak from August to October. The country had to impose another lockdown on the infected cities.
With the pandemic striking Australia a second time, how much did it affect e-commerce logistics? Did the country manage to cushion the impact on businesses and consumers with lessons learned from the first wave?
With that in mind, our in-house data team got right down to work and investigated the first delivery attempt success rates and the transit time for domestic parcels throughout the year 2020.
Transit times surged at both the first and second COVID-19 waves
Overall, there was an increase in transit time during both waves of the pandemic. Transit time rose from 2.2 days pre-pandemic to as high as 3.1 days in April during the first wave, as well as 3.5 days in August and September during the second wave.
One explanation for the rise in transit time is due to the significant increase in the number of online shoppers on e-commerce websites reaching an all-time high during the lockdowns, with 9 million households making at least one online purchase in 2020.
As a result, Australia saw a 96% year-on-year growth in online purchases across all categories, with their total e-commerce sales jumping to USD $22.9 billion in 2020. Indeed, as more Australian consumers were shopping from their homes, Australia Post was struggling to keep up with the sudden surge in parcel volume. Combined with the problem of a manpower squeeze due to social distancing measures, this resulted in delayed deliveries throughout 2020.
Contrary to expectations, however, the second wave seemed to have caused a greater delay in transit time than the first. This was likely due to the even stricter lockdown restrictions imposed, driving more consumers to shop online. This massive shift to online shopping saw Australia Post recording one of its busiest delivery days ever to a tune of 2.35 million parcels and letters in just one day.
Another reason for the increase in transit time towards the end of the year was likely the surge in parcel volume during the holiday season in Australia. In our recent study on the State of E-Commerce in Australia, we found that during the holiday season there was a 1.67x increase in parcel volume. Australia Post was found to be delivering over 52 million parcels in December 2020 which resulted in severe delays.
Delivery success rates in Australia peaked during lockdowns
While the transit time for domestic parcels increased, the delivery success rates have also increased. During the first pandemic outbreak, our data found that delivery success rates improved by 10% from March to May 2020.
Likewise, in the second wave, delivery success rates were maintained at a high success rate ranging from 92% to 93% from August to October 2020.
It appears that the lockdown has reduced the possibility of missed deliveries with more consumers working from home.
Another trend that we spotted during 2020 was the use of collection points. A study by Australia Post found that 49% of consumers view collection points as increasingly more important; during the lockdown period, Australia Post recorded 47% year-on-year growth in deliveries to collection points.
As more Australian shoppers became concerned with delayed deliveries during the holiday season, 21% of shoppers opted for alternative delivery methods in order to receive their orders on time. This could be another likely explanation for the high rates of successful deliveries on the first attempt.
What’s in store for 2021?
With Australia’s Victoria state extending Melbourne’s lockdown in 2021, it is impossible to predict how long COVID-19’s impact will last in Australia. On the bright side, more cities are exiting lockdowns and seeing greater control of repeated outbreaks. We definitely look forward to witnessing Australia’s comeback from the effects of COVID-19 in the second half of 2021 and what this looks like for their e-commerce and logistics sectors!
For more exclusive reports, insights, and interviews on the latest updates in e-commerce, retail, and logistics, follow us on Linkedin or join our community today!
*This updated study on the impact of COVID-19 on Australia utilized data available throughout the entirety of 2020. Our previous report on The Effects of COVID-19 on Australia 2020 used data that was available up to July, thus accounting for the differences in the data reported in the two studies.
For more exclusive reports, insights, and interviews on the latest updates in e-commerce and logistics, follow us on LinkedIn or join our community as a member.