Coronavirus is spreading around the world at a rapid pace and it is changing the way we use e-commerce, forcing freight companies to adapt.
Shoppers are staying home to prevent the spread of COVID-19, but they still need to eat, drink and stay involved in other daily essential routines. That is putting a huge strain on (but also bringing big business to) shipping carriers and online vendors, particularly those dealers that sell daily household consumables.
Expanded Volume of Online Sales
COVID-19 has forced people to stay inside, and an increasing number of consumers are beginning to rely online shopping. With people maintaining a strategic distance from physical stores, online ordering is the perfect way to shop for those necessities or comforts to make this turbulent time more manageable. AP News reported that transaction volumes in most online retail sectors have seen a 74 percent rise compared to the same period last year. Some products (including jewelry, apparel, and travel goods) have seen decreases in recent months, but most product categories have seen significant increases in online sales.
There are many reasons contributing to this growth in online sales. As news of COVID-19 spread, people responded by stocking up. They bought cleaning supplies, medicine, food, household essentials and other necessities in bulk amounts. As brick-and-mortar businesses closed, more consumers continued to turn to online shopping to obtain goods that they needed/wanted. As quarantines and social distancing rules increased around the world, consumers found comfort in home-projects, new hobbies, and impulse-buys. All of these reasons together resulted in an enormous increase in online shopping.
How Retailers and Freight Companies Have Adapted
Retailers have struggled to adapt to these new buying habits while dealing with disrupted supply chains. The usual speed and efficiency that is associated with online shopping has been put to the test in recent months. Consumers are buying different types of products and some products (such as disinfectant cleaners) are being bought in quantities that have never been seen before. This problem becomes worse as some factories that produce essential goods are being forced to close. For this reason, some stores are struggling to keep up with demand. Retailers have had to invest large sums of money to adapt their supply chains and increase their delivery capabilities. According to logistics technology firm Convey Inc., order fulfillment time (a measure of the elapsed time from when a shopper clicks “buy” to when the order is picked up by the carrier for delivery) has increased almost 40% over the past three weeks, going from 15.1 hours to 21.2 hours across a wide average of retailers.
COVID-19 has disrupted the operation of logistics and freight companies, too.
The abrupt slowdown in the trade of some goods has left some commercial/industrial freight companies with very few shipments to handle. Other carriers who deal with standard-sized residential deliveries (like cleaning supplies, medical supplies, food and household consumables) have been struggling to adapt and keep up. Shipping companies are having to make large investments to increase their workforce while also improving their operational safety. To safely increase their capacity, companies are investing in handwashing stations, protective gear, thermometers and thermal cameras in warehouses and distribution centers.
Even with these large investments, standard parcel carriers have seen significant rises in delays. The number of packages that had a change to their original “estimated date of delivery” rose from 2.9% to 4.2% in just three weeks. Companies are still seeking to find new technology and procedures that will allow them to meet high demand from online shopping while keeping their employees safe.
One of the most prominent examples of how freight companies have had to adapt was on April 8th, 2020 when the “Amazon Shipping” project was put on pause to allow Amazon to focus on its own internal shipping needs. Amazon Shipping was designed to pick up packages from businesses and deliver them directly to consumers, competing with large parcel carriers like UPS and Fedex. With increased demand during COVID-19, Amazon suspended the service and redirected its resources to help handle a surge in its own customers’ orders.
Lasting Changes
As the threat of COVID-19 goes away and as brick-and-mortar stores begin to reopen, many of our routines will return to (pre-virus) normal, but most experts believe that some shopping habits will be changed permanently. Unilever’s chief executive, Alan Jope, predicted a permanent increase in demand for soap and other cleaning supplies as improved hygiene became a priority for households. He also predicted this will be a “point of inflection” for online grocery shopping and the trend of buying food online will only continue to grow. If retailers and freight companies can adapt to adequately meet the sudden rise in online shopping, consumers may adapt their permanent buying habits as well.
