It’s become common knowledge that the COVID-19 crisis has added rocket fuel to the pace of eCommerce shopping and shipping.
According to the recent Pitney Bowes BOXpoll™, more than half of consumers (54 percent) shop online more often than pre-pandemic. And a whopping 73 percent of those consumers say they have enjoyed shopping online during the pandemic more than they expected. Meanwhile, nearly three times the number of consumers were doing more than half of their shopping online during that time, with 45 percent now versus 16 percent before the pandemic.
However, the holidays are rapidly approaching and are sure to boost those numbers and worsen the capacity crunch that carriers are now facing.
As a matter of fact, online holiday sales in the U.S. will surge 34 percent year over year for the 2020 season, nearly tripling the 12 percent growth registered in the prior year, according to a Digital Commerce 360 report.
But with these sales come some concerns. The overall number of holiday packages that will be sent out globally will exceed the shipping capacity for traditional carriers by 5 percent, jeopardizing promised delivery windows and potentially delaying up to 700 million orders worldwide.
And consumers are worried about it as well.
According to a study done by Convey reported in Logistics Magazine, 42 percent of consumers are worried a package will be late. And this worry has moved up the traditional holiday shopping timeline. Sixty-eight percent of consumers surveyed by Digital Commerce 360 and Bizrate Insights in September 2020 said they would start their holiday purchases by early November, up from 57 percent in 2019.
Surcharge season’s greetings
The overlap of the pandemic package surge and the traditional holiday volume rush is straining carrier capacity, and carriers have been responding with added surcharges to help offset their costs.
In May, there was a $0.30 increase per item for UPS Ground and SurePost shippers whose weekly volume is more than 25,000 parcels greater than the baseline of their average week in February, before COVID-related lockdowns took effect. UPS is also adding a surcharge of $31.45 for shippers who send more than 500 large packages in a week.
FedEx joined UPS a month later, adding a residential delivery charge of $0.30 per package for enterprise-level shippers whose volume exceeds 120 percent of their typical weekly volume. Additionally, FedEx has also imposed an oversize charge of $30 per package and $0.40 per package for oversize FedEx SmartPost packages.
As the holiday rush quickly approaches, more shippers are likely to reach the thresholds for these surcharges, making rate shopping vital to a holiday season that stays in the black.
Utilizing a multi-carrier parcel management solution, such as Transtream, helps shippers find the best rates for the delivery window needed early in the process. This helps shippers save money while letting customers know what to expect, reducing shopping cart abandonment, and boosting loyalty and repeat business.
This will be a new kind of holiday season for eCommerce and retail players who will face more fulfillment challenges than ever before. However, with the right strategy and tools, it is possible for them to have a happy holiday during turbulent times.