Dive Brief:
- The United States Postal Service is experiencing a historic surge in mail and packages this holiday season, the agency said on Monday.
- An employee shortage due to the COVID-19 surge and capacity issues with airlifts and trucking are causing the temporary delays, the agency said in a press release.
- To cope with the mail surge, the USPS has extended its holiday retail hours in select locations, expanded operational capacity with new equipment, leased extra vehicles and extended its package delivery window.
Dive Insight:
The COVID-19 pandemic and early holiday sales from retailers seem to have accelerated a jump in e-commerce shopping. Research from Deloitte's InsightIQ found that retailers' online sales in October catalyzed a 50% year-over-year spike in online sales, kicking off an extended holiday shopping season. That online spending increase continued for Cyber Monday and Black Friday, research from Adobe indicated.
But with the rise in packages shipped from retailers to consumers, this holiday season will likely see a wave of returns and increased shipping costs that weigh on retailers' margins. Highly populated areas like New York, Los Angeles and Chicago could face package delays between 25% and 30%, and average package delays could range from 14% to 18%, according to a report from LateShipment.com.
The USPS has urged the public to ship items early and is flexing its network and "making sure the right equipment is available to sort, process and deliver" mail and packages, according to Kristin Seaver, chief retail and delivery officer of the Postal Service. The agency has hired seasonal workers in some locations and expanded its tracking technology. The agency is delivering packages on Christmas Day for an additional fee in select locations.
