Online retail great for shipping industry

Jeremy Hobson Dec 2, 2009

Online retail great for shipping industry

Jeremy Hobson Dec 2, 2009


Steve Chiotakis: The National Retail Federation says online traffic on Cyber Monday was up 8 percent over last year. And a lot of analysts believe 2009 is expected to be the best year ever for online shopping. All that mouse clicking is getting a lot of merchandise moving, and as Marketplace’s Jeremy Hobson reports, that’s got some bricks and mortars jumping for joy.

Jeremy Hobson: At a FedEx sorting facility in Manhattan, a truck has just arrived from Newark Airport. Dozens of workers are fanning out beside a long conveyor belt sorting, scanning, and putting the packages into smaller trucks for delivery.

Just look at the workers’ faces and you can tell this is going to be a good year for FedEx. After all, when you buy something online, someone’s gotta bring it to you.

Jennifer Caccavo: FedEx expects to process about 13 million packages this year on our busiest day, which will be December 14.

FedEx spokeswoman Jennifer Caccavo:

Caccavo: Last year this time, we were looking at about 12 million packages, so we’re looking at about a 1 million package increase year over year.

FedEx plans to hire more than 10,000 seasonal employees to deal with the influx, its bigger competitor UPS, is hiring 50,000. Neither company would break down exactly what percentage of this year’s business will come from online shopping. But we do know the Great Recession will make 2009 the biggest e-commerce season ever.

Sucharita Mulpuru is an analyst with Forrester Research:

Sucharita Mulpuru: We expect Web retailers, on average, to do 8 percent better than they did last year.

That’s in part because price-conscious consumers are able to do more comparing online. It seems there’s no place better to bargain shop.

Mulpuru: Thirty percent of consumers in one of our recent surveys said that they’re actually going to be going online more during the holiday season in order to make sure that they’re getting the best deal possible.

The online retail wars have played out in public with Amazon, Wal-Mart and Target vying for customers. And it turns out the number one tactic e-tailers use to lure them is — you guessed it — free shipping.

Retail analyst Marshal Cohen is with the NPD Group:

Marshal Cohen: Two things that consumers look for: the ease of purchase and free shipping. And free shipping doesn’t only mean just one way. A lot of times, they’re looking for those retailers that are offering to take the goods back for free as well.

And whether it’s consumers or retailers paying to fly those packages around the country, the end result is what you might call . . . “winning one for the shipper.”

In New York, I’m Jeremy Hobson for Marketplace.

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