Will the boom in shipping last after the pandemic?
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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.
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