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Almost 200 years after the first freight wagons carried goods across rail tracks, the country is in the midst of a new pandemic-fueled transportation and commerce revolution: online shopping delivery.
Millions of people have relied on e-commerce for everything from toilet paper and groceries to puzzles and sweatpants during the pandemic. Online retail sales are up 32% from last year, a figure that was only expected in 2022, according to digital research firm eMarketer.
“If the pandemic were to continue or if a vaccine were to be distributed immediately, it would not really change anything because this was a train already on the track,” said Rich Thompson, who leads the global team. supply chain and logistics solutions for commercial real estate company JLL. “He’s just speeding up.”
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The surge in online shopping has led Amazon to add delivery trucks and limit inventory. Target has increased the number of employees dedicated to packaging products purchased online and imposed overtime in some warehouses. Walmart has deployed contextual fulfillment centers to help deliver online orders during the holiday shopping season.
This is all in addition to a historic expansion of delivery networks that rivals the 19th century rail boom, Thompson said.
“Parcel deliveries are akin to the creation of the US rail system,” he said. “These alternative logistics service providers are trying to build a private delivery network across the country – because that’s what we need.”
After decades of consolidation and labor abuse, the railroads split into competing entities in the early 20th century, as the federal government passed antitrust legislation and created the Federal Trade Commission to enforce laws that encouraged industry-wide competition.
Today’s online shopping delivery networks are not rail lines. But the country’s largest e-commerce companies are catching smaller delivery players left and right. FedEx completed its acquisition of Shoprunner this month to expand its online delivery network. Target announced this year the acquisition of Deliv, a same-day delivery start-up. Last month, Walmart announced its acquisition of Joyrun, a peer-to-peer last mile delivery service.
President-elect Joe Biden and Vice-President-elect Kamala Harris – who have both spoken about the potential dangers of a monopoly among big tech companies – are heading to the White House in January, raising questions about how the next administration will grapple with industry. giants like Amazon.
“In all the other technological revolutions that we have known, it has taken between six years and a generation for a government to step in and level the playing field again,” Biden told the New York Times in January. “All of a sudden you remember the Luddits who smashed the machines in the Midlands? It was their response when the culture changed. Same with television. Same with radio before that. Same, but c ‘is gigantic. And it is a responsibility of the government to ensure that it is not abused. “
Amazon, Walmart and Target, whose stock prices have skyrocketed over the past nine months, have benefited greatly from the fact that people have stayed at home during the pandemic. But physical retail has been caught off guard. To compete with the heavyweights, smaller retail companies have turned to ‘cash market’ companies, which offer delivery services on short notice but at much higher rates, said Zac Rogers, assistant professor. of operations and supply chain management at Colorado State University.
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“A lot of little guys say we have to bear the costs because it’s hard to pass it on to customers because a lot of people are in trouble,” he said. “You have these big guys, and you have to keep up with the level of service and competitive pricing of these giants that have giant devices – and that’s a challenge.”
As the sales and share prices of Target, Walmart and Amazon have skyrocketed, small physical businesses have been crushed by the pandemic. Small business sales were negative 28% at the end of the summer, down 9 points from May, said Christopher Carlozzi, Massachusetts state director for the National Federation of Independent Business.
Rogers said: “The big retailers that have their own fleet and their own ability to deliver to the location, they’ve done well. It’s the more specialized people who rely on other logistics companies that are really struggling because supply exceeds demand. for nine months. “
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