COVID-19

A holiday glut of packages prompts a shipping crisis for small businesses

Justin Ho Dec 24, 2020
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Mail carriers load up their trucks at a USPS distribution center in El Paso, Texas, earlier this year. Paul Ratje/AFP via Getty Images
COVID-19

A holiday glut of packages prompts a shipping crisis for small businesses

Justin Ho Dec 24, 2020
Heard on:
Mail carriers load up their trucks at a USPS distribution center in El Paso, Texas, earlier this year. Paul Ratje/AFP via Getty Images
HTML EMBED:
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It has been a busy year for online shopping — so busy that the country’s delivery infrastructure has been overwhelmed.

There are shortages of drivers, warehouse space is scarce, and backlogs at the U.S. Postal Service have made it harder for retailers to get goods to customers on time. We spoke to a couple of retailers to see how they’re handling the situation.

Ever since the pandemic started, Tom Butcher has been refocusing his Seattle-based synthesizer store, Patchwerks, on e-commerce.

He’s advertising more and building up the store’s website.

“We’re spending a lot more money on supplies: boxes and tape,” Butcher said. “It’s amazing how much tape we go through, honestly.”

Lately, the company’s been fielding a lot more questions from customers asking about their packages. And it’s been harder to tell them when their order will arrive.

“The logistics systems are really overtaxed,” said Dale Rogers, a professor of supply chain management at Arizona State University. He said in addition to a glut of Christmas packages, shippers are also trying to deliver COVID-19 vaccines. Which means retailers are competing for whatever warehouse and trucking capacity is left.

“And if you’re a small guy, you don’t necessarily get priority,” Rogers said.

Back in May, Sarah Piepenburg’s trucking carrier told her it could no longer work with her Minneapolis olive oil and vinegar store, Vinaigrette. The replacement she found was a lot more expensive. So, “we have to charge $20 for shipping,” she said. “Which we just raised our prices, by the way.”

Customers have complained, which is hardly ideal at the most crucial time of year for the store.

Piepenburg said she’s been too scared to estimate how sales have been going. “It’s a third of our entire revenue for the year,” she said. “It’s made in six weeks.”

Piepenburg has even offered some customers free shipping by delivering their packages herself.

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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