The Cargo Van Shortage – What Caused it and How Bad is it?
No one can deny the devastating impact the pandemic has had on the economy and businesses. Government-mandated plant closings and out of work employees have crippled manufacturing output, creating bottlenecks and shortages in many industries. The onset of the holiday season has put one industry in particular into focus – the vehicle manufacturing industry – as FedEx and UPS have seen a record surge in demand for delivery vans while at the same time there is a cargo van shortage. According to researcher LMC, the number of all new vehicles available in the US was almost one million units lower this October than a year earlier.
The Holiday and Pandemic Ecommerce Delivery Rush
A lot less delivery vans on the road is always a problem, but at no time is that more keenly felt than during the holiday season. And no holiday season previous to this pandemic holiday season has logged eCommerce sales so high. According to an article by roirevolution.com, “for the first time, ever more than a quarter of holiday sales will occur online. In fact, US consumers are expected to spend a collective 43.3% more with online retailers this holiday season.” In terms of deliveries, UPS and FedEx are predicting that they will ship 86 million packages between Thanksgiving and Christmas, with carrier capacity at only 79 million during the cargo van shortage.
How does Online Shopping / Ecommerce Delivery Work?
The simple click of a button by a consumer ordering a product online is the start of a complex process of picking, packing, and shipping the product to that consumer’s doorstep. The type of goods, the size of the operation, and whether the seller uses their own warehouse or even owns the goods themselves (drop-ship) impact the number of steps and how they are achieved. However, one thing differentiates and complicates the logistics of an eCommerce sale versus a traditional store sale and that is the challenging last leg of the product’s journey to a consumer residence or business. This final leg – known as the last mile – is almost exclusively accomplished using a delivery van for non-perishable eCommerce sales, and that is why the cargo van shortage is straining eCommerce sellers and delivery providers like FedEx and UPS this holiday season.
What Goods are Typically Delivered by Cargo Vans?
The question of what goods are delivered by delivery van is best answered by what isn’t delivered by a delivery van. Cargo vans are not generally used for perishable items or anything that requires refrigeration. Nor do they deliver hazardous materials or things like machinery and other items that are over-sized or very heavy. Generally speaking, items delivered by delivery vans are consumer items and finished goods that do not require special handling and may include apparel, entertainment, health and beauty, electronics, and non-perishable food. These are the consumer product categories that are hardest hit by the cargo van shortage.
Why is Last-Mile Delivery Important in the Era of Ecommerce
Last-mile delivery is the delivery of goods from a transportation hub to their final destination. When the last mile is the delivery of goods to a retail location like in traditional retail store sales, the logistics is simpler and much more predictable. But with the rise of eCommerce, the last mile – typically by delivery van to the consumer’s doorstep – is always different. It varies in length, destination, and difficulty and cannot be predicted in advance. All of this makes the e-commerce last mile much more expensive and prone to errors and delays. It is not a stretch to say that the mastery of the last mile can make or break an eCommerce business in good times, much less in a pandemic economy during the holiday rush and a cargo van shortage. Fortunately, 3PL logistics companies are stepping in to help eCommerce sellers meet demand and satisfy their customers in a cost-efficient manner in these difficult times.
How can ECT Help with your Delivery Rush?
With this year’s holiday rush and the cargo van shortage, there is no better time to hire an experienced 3PL to help you manage your logistics needs. East Coast Transport has been building its vast network of carriers over the last 40 years and can put them to work delivering your goods right now so you can meet customer demand and stay profitable. We use state-of-the-art technology and extensive resources to deliver unparalleled service every time, and our staff is approachable and experienced. Contact East Coast Transport here to connect with our team of professionals and discover how we can help and grow your business now and in the future.