Shipping industry pushed harder amid pandemic, holiday season

Package delivery booming amid holidays, pandemic

With the pandemic pushing online shopping to historic highs, it's created a surge in package deliveries like never before.

(FOX 9) - While package delivery is booming amid the holiday season and the pandemic, shipping volumes are growing and the demand is only expected to increase, as well.

Professor George John of the University of Minnesota’s Carlson School of Management said the pandemic economy has been an interesting mixed bag.

"We live in a very strange time. You would expect consumer spending to have crumbled, but it hasn’t," he said.

Consumer spending in the third quarter is up about seven percent from last year, and online retail is soaring – 37 percent higher than in 2019. But even with that increase, those online purchases are still only 14.5 percent of all shopping.

"Amazon has almost half of that chunk of sales, so Amazon is a big player, including all the third party people," Prof. John said.

In the past few years, Amazon took over a lot of their own deliveries, creating regional sorting centers like the one in Eagan. And this time of year, you see a lot more unmarked trucks, as rentals have become a huge part of deliveries not just for Amazon, but for UPS and FedEx, as well.

Also, in the past couple years, Amazon has offered Flex, recruiting drivers to deliver in their own vehicles for what’s known in shipping as "the last mile."

"The last mile is the easiest to contract for when you have surplus," Prof. John explained. "It’s sort of like Uber…there are people with panel trucks who want to pick up some extra money."

Shipping has been pushed harder than ever as COVID-19 pushes more purchasing online, and some estimates put holiday shipping up by more than 20 percent.

As Professor John notes, while some businesses are hurting, the overall economy is not, and there are a lot of people are finding they have more money to spend.

"We’re stuck at home… a lot of the usual expenses we don’t have, so we’re spending money in other places," he said.

The U.S. Postal Service put out a statement last week that was partly an apology to customers noting the historic crush in packages and staffing shortages could lead to unavoidable delays.