It’s difficult to turn on the news and not have concerns about shipping lately. As a consumer – am I going to be able to receive the items I order? And as an eCommerce business owner – will I be able to get those ordered items to the consumer for a cost that will not bankrupt either of us?
Covid has taught us that many rise to the occasion and when they do not, innovation prevails. As shipping demands continue to rise, who will rise to this occasion?
USPS is Making Changes
In the wake of the UPS strike, USPS has decided now is the time to step up and stake its claim that it would like to become the backbone of the eCommerce industry.
The Postmaster General is looking to transform the aging agency as the demand for parcel service continues to increase. He estimates a 50% increase in deliveries since last year with more Americans than ever wanting everyday items delivered directly to their homes.
As many airlines are cutting flights due to decreased demand of consumer goods that are typically shipped as cargo, many other shipping providers will be forced to increase prices as costs to deliver to small towns further away from hubs continue to rise. This is where the USPS shines – they already deliver to every home and business, whether small town or large city.
With a fleet of more than 300,000 vehicles, their infrastructure is built to reach every house and business across the US and are able to shift to meet this ever-increasing demand much quicker than many of the other larger carriers that rely on flights and hubs.
UPS Employees are Hoping for Changes
As the International Brotherhood of Teamsters represents employees of UPS, they are hoping the threat of a repeat of the strike in the late 1990s will provide some leverage.
At the time, more than 185,000 workers walked and operations came to a standstill. The 15-day strike overwhelmed USPS and FedEx and ultimately impacted businesses across the US for months. Their threat is that the current strike could do so much worse, since the demand for deliveries is so much more than it was 25 years ago.
UPS workers are hoping the talk of strikes will encourage UPS to improve working conditions (such as AC in the delivery trucks), increase the number of full-time workers with benefits, and increase wages after years of no increases.
Thankfully there are several more alternatives for shipping today than there were in the late 90s and experts predict this strike may not be as devastating as the UPS strike of 1997, but it will still impact many. Most eCommerce businesses are used to supply chain issues after the last few years since Covid, however one of the largest carriers striking will still cause a ripple.
eCommerce Prepares for More Changes
This strike comes right at the beginning of the back-to school season and as many begin preparing for the peak holiday season in a few months. If the pandemic taught us anything, it’s the importance of diversification and tightening the efficiency of processes to be ready for whatever may lie ahead.
Shipping processes are critical as you may need to switch carriers quickly, plan for delays, increased costs, and challenges getting packages to consumers to meet their expectations. There will most likely be inventory challenges with supply chain issues as we have seen over the past few years.
As packages are waiting to for a carrier to distribute them, that is product that you show as inventory but are not able to sell to consumers because it’s sitting on a truck waiting to get to your warehouse to then be shipped to a customer. Managing customer expectations through this will be critical, so as not to tarnish your brand or the retailer or marketplace where you partner and sell products.
As USPS and others begin to make the shift to evolve, unfortunately the cost will ultimately impact eCommerce businesses and be passed along to consumers. The Postmaster General does warn consumers that this upgrade to the agency will require price hikes over time, but should be relatively lower than the other shipping carriers due to how many restrictions they will have with freight on flights and increased transportation costs to smaller towns.
As the shipping industry continues to evolve, we will have to wait and see how it impacts demand for the eCommerce industry as a whole.
Simplify with OPAL’s 4-in-1 Software Solution
EDI | Order Management | Warehouse Management | Shipping
OPAL is your innovative solution to simplify your small to mid-sized to enterprise business fulfillment needs in today’s rapidly transforming retail world.
As you are assessing your shipping and inventory processes to prepare for the supply chain issues ahead — OPAL is here to partner with you and automate and simplify your processes for success.
To learn more about how your eCommerce business can thrive, click here!