Parcel experts raise key points about impact of coronavirus on express delivery-based markets

In recent conversations I had with two leading parcel express and last mile logistics experts, there was no shortage of talking points to touch upon, as they relate to the ongoing coronavirus, or COVID-19, pandemic.

One focus on these sector pertained to staffing levels, a point that was raised by Jerry Hempstead, president of Orlando-based Hempstead Consulting.

Putting things into clear perspective, Hempstead went through staffing counts at some of the nation’s largest delivery services. Amazon, he observed, currently has 798,000 employees and is reportedly planning to be hiring another 100,000, due to increased demand, while also noting Amazon has indicated it is going to limit orders going forward, due to the demand pressures on its processes.

He also pointed out that UPS has 444,000 employees, the United States Postal Service (USPS) has 644,000 employees, and FedEx has 625,000 employees. And he noted that regional last mile carriers like OnTrac, Lasership and others factor into the mix, not to mention specialty delivery companies Purolator and DHL adding to the running tally, too.

While these staffing numbers are solid, to be sure, Hempstead observed that there are many related things to ponder at the moment.

“The country relies on these companies to deliver items to businesses and homes,” he said. “I suspect due to the coronavirus, more and more of us will order online more frequently, including our food. So what happens if or when the government makes these shelter in place announcements? These are knee jerk decision-making moments and pressers and it is inciting people to panic. Does this mean that these 2 million delivery adults have to stay home, and if so, then what? If grocery stores and pharmacies are to remain open, who supplies them? Who works in them? I get my medicines from a mail order pharmacy? Will that continue? 

Hempstead also noted the importance of the supply chain needs to be made crystal clear to government leaders, in order to ensure that they fully understand it is the key cog, or link, to keep commerce going, especially for shipments to residents.

With things so uncertain and changing on a daily basis, Hempstead’s questions are all fair and valid, for sure.

And more solid points were raised by John Haber, CEO and founder of Atlanta-based Spend Management Experts. 

Talking about the current impact of coronavirus on both parcel and last mile logistics operations, Haber said that, in the near term, it is likely there will be a “drastic increase” in small parcel residential deliveries.

“And with all brick and mortar retail closings e.g. the only way to get goods from many of these retailers is going to be through small parcel delivery networks,” he added. “We are also seeing the replenishment of medical supplies, household supplies, anything in that area is of upmost importance.”

Another point raised by Haber related to Amazon saying last week it is putting restrictions on inbound shipments into the Fulfillment by Amazon (FBA) service from March 17 through April 10, which he said is going to impact many sellers on Amazon that are selling goods that are not part of what is going to be allowed to be fulfilled by Amazon on the inbound to side to FBA.

In a statement issued last week, Amazon said it is “temporarily prioritizing household staples, medical supplies and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and ship these products to customers. For products other than these, we have temporarily disabled shipment creation. We are taking a similar approach with retail vendors. This will be in effect today through April 5, 2020, and we will let you know once we resume regular operations. Shipments created before today will be received at fulfillment centers.”

Both Hempstead and Haber make some great points, and it is very likely those points are only the tip of the iceberg, as it relates to this ongoing pandemic, to say the least. What happens from here is guesswork, to a degree. Please stay safe out there and be smart, too.