COVID-19 MAY HAVE A LASTING EFFECT ON PARCEL SHIPPING

Posted on July 26, 2021 by Matt Morelli

It was the last week of February, 2020. My wife and I, celebrating our honeymoon with a weeklong trip to Disneyworld, stood in line for Pirates of the Caribbean. Flipping through articles on my news app, I read a story that left me convinced that COVID was going to become a problem. To date, it’d been a big topic of discussion but it was yet to take hold in America. By all indications at that time, it was going to, and it was clearly going to be the precipice for change in a lot of aspects. I jumped over to my Amazon app and purchased some supplies that I thought might be good to have around in case things got weird.

They got weird.

Not on that list, was toilet paper.

Hindsight is 20/20…

Professionally, what I failed to realize at the time, was the logistical strain that it would place on…well, everything. I suppose that my mind should have gone there immediately, but I was having too much fun at Disney to be distracted with what was to come.

Not even a month later, all of Los Angeles was on lockdown. Schools, bars, lots of retail stores, offices – closed, or open with very limited access. A large volume of what we used to go out and buy in person, could only come by delivery now. The parcel shipping industry relies on rock solid logistics to move tens of billions of packages around the globe each year through systems that are for the most part, scalable. Small parcel shipping carriers are used to the big holiday rush and have had years of practice and refinement of their processes to ensure that the rush does not slow package delivery to a crawl. What happens, though, when that holiday rush becomes permanent?

Scalability suddenly becomes limited to the realm of reality. Volume surges that were previously predicted and expected to come and go have just stayed now...and so have the added fees and slower package delivery times. In addition to the slower delivery times, came more instances of loss, damage, and theft. Many carriers who were used to delivering 180 – 200 packages over their eight hour shift were being saddled with 250 – 300 packages leading to significantly longer days, and increases in instances that lead to shipping insurance claims.

I think I am safe in saying that most of us anticipated that things…life in general…would just be more expensive after COVID. We were right. Shippers should be very aware of and pay close attention to their shipping costs, as most of the peak surcharges and other cost increases that were implemented during COVID may likely remain in place in perpetuity, as B2C eCommerce shows zero signs of slowing down. COVID may likely have been that pivot point that people needed to fully embrace online shopping, and carriers and businesses are still playing catch-up. Shippers should also consider protecting their parcels with shipping insurance. It is true that more packages are suffering loss and damage, and it is not necessarily commensurate with the increase in volume…the percentage of affected packages has also increased.

If you have questions about insuring your parcels, or reducing your shipping expenses, contact a U-PIC agent – we’re not just insurance experts but parcel shipping experts and we’re happy to help anywhere we can.

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