As the second round of lockdown measures arrive amid peak season, last-mile delivery providers are preparing for high volumes once more
Parcel companies are investing in new facilities and hiring thousands to keep pace with the e-retail boom and holiday demand
In the US and Canada, Amazon is looking at 100,000 permanent jobs and 100,000 seasonal jobs, as well as 75 new fulfillment centers, sortation centers, regional air hubs and delivery stations in 2020
“Bumper set of profits” seen if companies can keep operations running throughout both lockdown and holiday periods
The new series of lockdowns being initiated by governments worldwide has brought significant benefits to last-mile delivery and fulfilment operators as the boom in online retailing continues, according to a new report from Transport Intelligence (Ti).
Ti said parcel companies have all been investing in new facilities and hiring workers, both seasonal and permanent, in anticipation of a struggle to keep pace with demand with the holiday season in the offing.
Many have been conducting large recruitment and investment programs not just to cope with the secular growth and volatility of e-retail (caused in part by COVID lockdowns) but also with the upcoming holiday season.
Amazon, Ti noted, is hiring 10,000 new seasonal hires and acquiring 1,800 new electric vehicles from Mercedes in Germany. In the UK, it is creating 10,000 new permanent jobs and 25,000 seasonal jobs while also investing in three new robotics fulfillment centers. The online retailing giant is also eyeing significant recruitment activities and more investments in fulfillment centers in other European countries.
And in the US and Canada, Amazon is looking at 100,000 permanent jobs and 100,000 seasonal jobs, as well as 75 new fulfillment centers, sortation centers, regional air hubs and delivery stations in 2020.
DHL, meanwhile, wants to fill 10,000 new jobs at DHL Express worldwide. In the US, its recruitment program includes 7,000 new e-commerce supply chain jobs and 400 new international express hires. On the investment front, it is expanding to 1,000 collaborative robots by end-2020.
The DPD group is also conducting recruitment activities in Europe, notably 6,000 new jobs in the UK, and 4,000 more workers over the holidays in Germany. It is also adding to its number of vehicles and depots and investing in automation, scanning and routing systems.
FedEx, meantime, is expected to hire 70,000 seasonal employees for the holidays, while UPS is seeking 100,000 seasonal employees for the holiday season.
And as unemployment rates have been on the rise due to the economic consequences of COVID-19, the logistics and last-mile sectors won’t have difficulty with recruiting, which should reduce pressures on costs, said Ti.
“If companies can keep their operations running throughout both the lockdown and holiday periods, then there should be a bumper set of profits announced in Q1 2021,” it said.
“Many operators are already increasing surcharges to limit the volumes of parcels through their networks and some may, as has been seen in the past, place a cap on volumes if necessary. This should help ensure that increased volumes translate into much enhanced profitability.”
Ti has forecast that the global express & small parcels market will expand by 7.2% in 2020 due in large part to strong e-commerce sales as consumers turned to online retail during lockdowns and stay-at-home orders, causing parcel volumes to rise markedly.
As the second round of lockdown measures arrive amid peak season, some last-mile delivery providers are preparing for high volumes once more.
But other logistics markets are not faring as well. Ti has forecast a 10.2% contraction for the freight forwarding market over this year as both freight volumes and capacity have been severely impacted by the Covid-19 crisis.