Parcel Service Environment Evolving to Meet Demand
Posted: May 13, 2020 |
The COVID-19 shelter-in-place and quarantine guidelines have driven a spike in residential deliveries as shoppers shop from home rather than the brick and mortar stores. Parcel carriers’ commercial volume is plummeting. Those carriers are taking on additional cost in the support of service that is far less profitable, while their traditional profit-rich revenue drivers are closing business doors in many cases, permanently.
The future uncertainty about the small package shipping landscape post-COVID-19 makes it difficult to anticipate exactly how parcel service providers respond with rates. The world economy is uncertain at best as carriers are feeling their way like shippers, are reacting to market shifts on a day-by-day basis. However, as we examine small package service level needs, particularly compared to costs, our ability to seize market share opportunities will rely on your ability to navigate parcel pricing structures that are complex by design.
Ultimately, the global effect of the novel coronavirus may open the door to a very competitive business environment for survivors and an aggressive pricing environment for carriers working to rebound from a first and second quarter that will be costly in numerous ways. The door is open to take advantage of lower costs as the surviving shippers scramble for market share.