COVID-19

Will the boom in shipping last after the pandemic?

Justin Ho Dec 17, 2020
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A FedEx driver makes deliveries in Manhattan on Sept. 17, 202,0 in New York City. Spencer Platt/Getty Images
COVID-19

Will the boom in shipping last after the pandemic?

Justin Ho Dec 17, 2020
Heard on:
A FedEx driver makes deliveries in Manhattan on Sept. 17, 202,0 in New York City. Spencer Platt/Getty Images
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Shipping company FedEx will announce its latest quarterly figures after markets close Thursday.

It’s been quite a year for the business of delivering things to our doorsteps. Online shopping has boomed, and last quarter, FedEx said the number of packages it shipped via ground grew by nearly a third compared to last year.

Delivery companies have had to expand to handle the boom in e-commerce during the pandemic. FedEx has been upgrading its existing facilities and building new ones.

And even before COVID-19, the company started making home deliveries seven days a week.

“They’ve been a great beneficiary of having that seven day network in place,” said Satish Jindel, president of the consulting firm ShipMatrix.

Last quarter, the Commerce Department said e-commerce sales grew by 36% compared to the same time a year ago. But will that last? 

“I think it would be overly optimistic if you expect these growth rates to continue,” said Brian Yarbrough, consumer research analyst at Edward Jones.

Even if growth slows, shipping companies will still have to scramble to meet demand, said Rob Martinez at parcel consultancy Shipware.

“That concept that demand exceeds the capacity will continue into 2021,” he said.

Martinez said the big shipping companies usually compete with each other by offering discounts to retailers. But right now, he says that’s not happening.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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