The 2019 holiday season saw a significant increase in holiday spending compared to 2018, and 2020 was on track to do so as well. Even though the world is facing the impacts of a global pandemic, experts are still predicting a big increase in spending this holiday season.
While the state of the world may be different this year, volume and speed remain important factors that will affect the shipping industry during the 2020 holidays.
Given the rampant virus and stay-at-home orders, many consumers are turning to online commerce now more than ever.
- E-commerce spending increased 93% year over year this May, and many expect to see these trends to continue through the 2020 holiday season. (Source)
- 43% of consumers plan to do their holiday shopping online exclusively, and 75% expect to do at least some online shopping--that’s up 65% from 2019. (Source)
- 56% of merchants expect to see a spike in retail sales at or above 2019 numbers (Source).
- Looking back at 2019, USPS expected to deliver a whopping 800 million packages between Thanksgiving and New Year’s. They estimated delivering 28 million packages per day alone between December 16-21, 2019. (source)
These retail numbers put increased pressure on shippers. Some believe this could result in “shipageddon” or a shipping crisis.
- Shipageddon may involve port congestion, shipping container shortages, and a potentially chaotic retail supply chain. (Source)
- With UPS and FedEx already hitting capacity before the onset of the holiday season, they could face delays of up to 7 million packages a day. (Source)
- 60% of merchants believe shippers may place a cap on deliveries, while 49% of merchants worry whether shippers can keep up. (Source)
However, shippers are acknowledging this change in holiday shopping and are planning accordingly.
- UPS plans to hire 100,000 season workers in advance of the holiday season (Source).
- FedEx will hire an additional 70,000 workers to accommodate the 2020 holiday rush. (Source)
Because of the unusual factors surrounding this holiday season, the shipping industry sees itself in somewhat of an unpredictable circumstance. Are you prepared for this unique holiday season? Find out more about transportation risks in last-mile logistics.