Coronavirus Impacts for Last Mile Delivery Providers

March 4, 2020


According to Reuters, there are over 92,000 confirmed coronavirus cases globally. Infections have appeared in at least 78 countries and territories including the U.S. Originating in China, the virus has rocked supply chains, domestic and international.

The State Post Bureau reported that China's parcel-delivery companies' revenue fell 16.1% in January while volume fell 16.4%. As of Feb 22, China Post, SF Express, and JD Logistics have completely resumed business. Resumption rate of other courier companies has reached 66.7%.

Global express providers, FedEx, DHL and UPS have been impacted as well.

FedEx

In an interview with Reuters, a FedEx spokesperson said that it “continues to operate inbound and outbound flights to and from affected countries but work and travel restrictions could delay some shipments. We are taking recommended precautions in terms of pilot, team member and customer health and safety.”

In FedEx’s February 26 service announcement, the company noted 1-3 business delays to various cities in China from Europe and the U.S. Additionally, from Europe to China, FedEx temporarily suspended FedEx International Economy HeavyWeight (shipments above 100kg), FedEx International Economy Freight (all) & TNT International Economy Express (shipments above 100kg).

DHL

Meanwhile, DHL highlighted the coronavirus impacts for its DHL Express and DHL Global Forwarding divisions, where the business is particularly affected due to cross-border trade flows into and out of China. For the month of February, DHL anticipates a $66 million to $77 million negative impact to Group EBIT.

UPS

UPS also has said that business has slowed although the company believes it’s too early to quantify the impact of the disruption. The company was beginning to see a rebound in demand as new cases of infections slowed.

USPS

The U.S. Postal Service (USPS) has temporarily suspended the guarantee on Priority Mail Express International destined for China and Hong Kong.

Domestic Impact Still Uncertain

Right now, the impact for these providers primarily has been international cross-border. What happens if the number of coronavirus cases increase in the U.S. to the point that it impacts domestic last-mile delivery? We’re already seeing some of this from Amazon which has reported a strong surge in demand for Amazon Fresh and Amazon Prime services because of customers staying away from physical stores amid growing fears over infection. Instacart, Postmates, Target’s Shipt and other crowd-sourced delivery providers will likely experience high demand for delivery services.

But what about UPS, FedEx and USPS? How will they respond to possible increased coronavirus threats in the U.S? Currently it’s unclear. None of the companies have made their plans public.

In times of such uncertainty, monitoring UPS, FedEx and USPS via their service alerts and social media accounts is important. SME already does this on a regular basis but we encourage everyone to do so as well.

For more information:

FedEx Service Alerts

UPS Service Alerts

USPS Service Alerts


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

Share this article:

Blog Posts

  • Categories

Tags

Coronavirus Impacts for Last Mile Delivery Providers

March 4, 2020


According to Reuters, there are over 92,000 confirmed coronavirus cases globally. Infections have appeared in at least 78 countries and territories including the U.S. Originating in China, the virus has rocked supply chains, domestic and international. The State Post Bureau reported that China's parcel-delivery companies' revenue fell 16.1% in January while volume fell 16.4%. As of Feb 22, China Post, SF Express, and JD Logistics have completely resumed business. Resumption rate of other courier companies has reached 66.7%.

Global express providers, FedEx, DHL and UPS have been impacted as well.

FedEx

In an interview with Reuters, a FedEx spokesperson said that it “continues to operate inbound and outbound flights to and from affected countries but work and travel restrictions could delay some shipments. We are taking recommended precautions in terms of pilot, team member and customer health and safety.” In FedEx’s February 26 service announcement, the company noted 1-3 business delays to various cities in China from Europe and the U.S. Additionally, from Europe to China, FedEx temporarily suspended FedEx International Economy HeavyWeight (shipments above 100kg), FedEx International Economy Freight (all) & TNT International Economy Express (shipments above 100kg).

DHL

Meanwhile, DHL highlighted the coronavirus impacts for its DHL Express and DHL Global Forwarding divisions, where the business is particularly affected due to cross-border trade flows into and out of China. For the month of February, DHL anticipates a $66 million to $77 million negative impact to Group EBIT.

UPS

UPS also has said that business has slowed although the company believes it’s too early to quantify the impact of the disruption. The company was beginning to see a rebound in demand as new cases of infections slowed.

USPS

The U.S. Postal Service (USPS) has temporarily suspended the guarantee on Priority Mail Express International destined for China and Hong Kong.

Domestic Impact Still Uncertain

Right now, the impact for these providers primarily has been international cross-border. What happens if the number of coronavirus cases increase in the U.S. to the point that it impacts domestic last-mile delivery? We’re already seeing some of this from Amazon which has reported a strong surge in demand for Amazon Fresh and Amazon Prime services because of customers staying away from physical stores amid growing fears over infection. Instacart, Postmates, Target’s Shipt and other crowd-sourced delivery providers will likely experience high demand for delivery services. But what about UPS, FedEx and USPS? How will they respond to possible increased coronavirus threats in the U.S? Currently it’s unclear. None of the companies have made their plans public. In times of such uncertainty, monitoring UPS, FedEx and USPS via their service alerts and social media accounts is important. SME already does this on a regular basis but we encourage everyone to do so as well. For more information: FedEx Service Alerts UPS Service Alerts USPS Service Alerts
ABOUT SPEND MANAGEMENT EXPERTS Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

Share this article:

Blog Posts

  • Categories

Tags