COVID-19

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

Justin Ho Dec 24, 2020
Heard on: Marketplace
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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
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:
COPY

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

With a slow vaccine rollout so far, how has the government changed its approach?

On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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