CHICAGO (NewsNation Now) — The holiday shopping season is upon us — right in the middle of a pandemic.
For the past 5 years e-commerce has grown around 15%, but David Morris with Fortune Magazine says 2020 is different.
“This year growth is more into 20% or above, so there’s way more than people expected,” said Morris.
A big contributor to that percentage were the 5 days between Thanksgiving and Cyber Monday, when U.S. shoppers spent nearly $35 billion dollars with online retailers.
“The pandemic surge is definitely real it’s huge and it’s going to be I think a long-term transformation,” Morris said.
The transformation means shipping is a key component to success for many of those retailers.
Professor Michael Cusumano with MIT’s Sloan School of Management said Amazon — which employs more than 1 million people, is known for offering 1-to-2 day deliveries and has hundreds of facilities around the country — is expanding even more.
The online retail giant is taking over space currently left empty by former mall department stores around the country.
“They’re taking over shopping malls, abandoned Sears buildings and turning them into Amazon distribution centers and warehouses; and it’s just getting bigger and bigger and bigger,” said Cusumano.
Amazon also leased at least 12 additional Boeing airplanes — adding to its fleet of more than 75 aircraft and further strengthening its shipping logistics system for holiday deliveries.
“The bigger it gets, the more effective it gets at actually delivering products and services because it has everything,” Cusumano said.
Amazon’s fulfillment capacity expansion could give the company an important advantage this season. An increase in volume means an increase in pressure on delivery companies FedEx, UPS and USPS — which are all currently operating seven days a week.
“UPS has hired something like 100,000 new people on a temporary basis, so there’s a big surge there,” said Morris.
UPS imposed temporary shipping restrictions on six large retailers last week. According to The Wall Street Journal, those retailers include Macy’s, LL Bean and Gap. Meaning, if the retailers exceed their allocated space — packages will only be picked up once space is available.
“UPS has gone to some length to clarify that they already had negotiated allotments for those retailers, that are based on informed projections of what was already happening with the pandemic,” said Morris. “So the limitations are on unplanned volume.”
As a remedy, some retailers are using multiple carriers. For example, Macy’s website lists UPS, USPS and DoorDash.
However, what ultimately matters to most consumers is that packages arrive on time.
Important deadlines to remember:
- Dec. 7 was the cutoff for many USPS international shipments
- Dec. 15 is the ground shipping deadline for USPS, UPS and FedEx.
- Dec. 19 is the deadline for USPS Priority Mail
- Dec. 21 is the deadline for UPS 3-day select and FedEx Express Saver and 3-Day Freight
- Dec. 23 is the deadline for USPS Priority Mail Express, UPS Next Day Air and FedEx Overnight
“The shipping guarantees, in particular UPS and FedEx normally have cash back if they break their deadline. Those aren’t in effect this year. They’ve suspended their guarantees because of the pandemic which gives you a sense of how much uncertainty there is,” Morris said.
Some delivery companies, like FedEx, do offer limited services on Christmas Day, but you will pay a premium.
Don’t forget to account for any major weather events over the next few weeks, which could unexpectedly slow down all the delivery companies.