Online retailers and couriers are experiencing record peak volumes and many are stretched to full capacity. ParcelHero says the worst is yet to come as Christmas 2020 could be 50% busier than last year. It’s urging retailers to work closely with their delivery partners, otherwise a looming driver shortage and strained supply chains will mean Christmas chaos.
A capacity crisis is set to cause delivery chaos this Christmas, fears the home delivery expert ParcelHero. This year’s 50% boom in online sales, fuelled by the impact of the coronavirus pandemic, has already created unprecedented demand for home deliveries. ParcelHero is warning a probable record online Christmas will double deliveries for many retailers and potentially snap overstretched supply chains.
ParcelHero’s Head of Consumer Research, David Jinks MILT, says the double-whammy of families, separated by Covid restrictions, mailing their gifts, plus a shortage of skilled drivers created by Brexit, could prove a mountain too high to climb. He is urging retailers and couriers to start escalating their Christmas planning immediately to conquer the Mount Everest of Christmas peaks.
The huge demand for deliveries is being compounded by the reported loss of a quarter of a million EU nationals from the UK economy this year, which will lead to a 30% shortfall in drivers and warehouse workers.
Even though many retailers and delivery companies are attempting to hire thousands more staff in preparation for this year’s Christmas peak, this might be difficult to do in practice. Retailers may need to radically shake up their Christmas distribution plans.
Despite a partial pick-up of High Street store sales in recent months, online sales are still over 50% higher compared to a year ago. ParcelHero had its busiest day ever just last week and online pure-play Ocado has overtaken Tesco to become the UK’s most valuable retailer. This year’s home delivery growth is unprecedented for both parcels and groceries.
With capacity already stretched, the impact of Christmas can’t be underestimated. For many retailers, Christmas at least doubles their usual sales. Indeed, there are some companies that run at a loss for the rest of the year and make almost all their profits at Christmas. With many families unable to get together this Christmas, more people than usual will be sending presents to loved ones and ordering their gifts online. We anticipate Christmas volumes could be 50% higher than last year.
Christmas success is always balanced on a knife edge. As a dreadful warning, it only took an increase in the popularity of online Black Friday shopping in 2014 to cause Christmas chaos across the retail and delivery industry. Nearly one in three (31%) online shoppers experienced problems with their orders that Christmas, 49% suffered from missed deliveries due to overstretched companies’ erratic delivery patterns, while 45% experienced late deliveries or never received their goods.
The spike in online orders caught many of the UK’s most respected brands off-guard. The likes of AO.com, M&S, River Island, Currys-PC World, Shop Direct and Debenhams all admitted to disruption to their delivery networks in fulfilling the record amount of orders. Even the e-commerce leader Amazon found itself overstretched, while Yodel was forced to stop picking up parcels from retailers as it struggled under the weight of demand.
There’s no doubt the problems of Christmas 2014 could be repeated this year if retailers underestimate the scale of the challenge. Berry Recruitment, one of the largest temporary worker suppliers in the country, says demand for delivery drivers is running at 30% above supply. It believes a combination of a huge increase in online ordering and fewer European workers has created a perfect storm. This view is supported by findings from the business news service Quartz, which analysed data from the Government’s Office of National Statistics (ONS) and found around a quarter of a million people from the EU have left the UK economy since the start of the year, because of the impact of both Covid and Brexit.
Can the crisis be averted? This year, Yodel seems determined not to repeat the experience of 2014 and has announced it will create 2,950 new jobs to handle volumes during the Christmas peak. Similarly, many other delivery companies have been gearing up for some time to cope with the rise in demand. Amazon is planning to create more than 20,000 seasonal and permanent positions ahead of the festive period.
However, with supply chains stretched to breaking point, we advise online shoppers to buy their presents in good time and that everyone sends their presents with time to spare, as Britain’s couriers battle with potentially record volumes. For more information on how retailers can compare carriers’ services to boost their Christmas capacity, see ParcelHero’s continuously updated guide at https://www.parcelhero.com/en-gb/uk-courier-services