Coronavirus creates UPS, FedEx delivery van crunch as holiday shopping moves online
The companies need more vans. Like, now.
This holiday season is unlike any other in modern times. The coronavirus pandemic has left numerous restrictions in place that make it more difficult to plan a day shopping for gifts, and that's led more people to turn to online retailers. And online retailers need someone to deliver their goods. It turns out, companies like UPS and FedEx are really starting to feel the crunch.
Bloomberg reported Wednesday that both of the parcel delivery companies are facing a serious delivery van shortage. In other words, both need more vans as soon as possible and its partners have started to either lease vans, or purchase used ones. Brendan Keegan, CEO of Merchants Fleet which provides vehicles to delivery companies, told the publication that any and every van that is for sale isn't off limits. The company needs them now.
It's been a perfect storm for a delivery van shortage. Every major automaker shut operations down earlier this year to slow the spread of COVID-19, and in the process, the automakers left a lot of supply off the table. At the same time, more people already started to lean on online retailers and home delivery for more goods as social distancing became the norm. Now, with holiday shopping in full swing, delivery companies don't have many choices left.
It also means delivery charges are more expensive this year. According to the report, UPS implemented "peak surcharges" to help offset added delivery costs. UPS confirmed these surcharges with Roadshow and said, "While package volume and demand have created a tighter market for rental vehicles than in recent years, we are well-positioned to service the needs of our customers." FedEx said in a statement, "FedEx has experienced a surge in package volumes due to the pandemic and now the holiday season. We have the ability to flex our network during periods of peak activity and have taken steps to secure our ability to deliver the best possible service this season."
Auto production is only now starting to return to pre-pandemic levels, but it might be a tad too late for companies that needed vehicles like the Ford Transit yesterday. If anything, the pandemic sped up the creation of a larger home-delivered goods economy, and it's likely why startups and traditional automakers alike bank on electric commercial vehicles to boost EV adoption. Heck, Rivian and Amazon have a purpose-built electric delivery van coming in under two years.
