Nearly 200 years after the first trucks transported goods by rail, the country is in the midst of a new revolution in transportation and trade fueled by the pandemic – online shopping delivery.
Millions of people rely on e-commerce to get everything from toilet paper to groceries to puzzles to sweatpants during the pandemic. Online retail sales increased by 32 percent compared to last year, according to digital research company eMarketer until 2022.
“If the pandemic were to continue or a vaccine be distributed immediately, it would not really change anything, because it was a train already moving on the track,” said Rich Thompson, who leads the global supply chain and logistics solutions team for the commercial fixed company JLL. “It’s just accelerating right now.”
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The increase in online shopping has led Amazon to add delivery trucks and limit inventory. Target has dedicated the number of employees to the packaging of products purchased online and ordered overtime at some warehouses. Walmart has built pop-up distribution centers to help deliver online orders during the holiday season.
It contributes to a historic expansion of delivery networks that oppose the 19th-century railroad boom, Thompson said.
“Package deliveries are related to the creation of the American railroad system,” he said. “These alternative logistics providers are trying to create a private delivery network across the country – because that’s what we need.”
After decades of consolidation and labor abuse, railway companies broke up into competing entities in the early 20th century when the federal government enacted antitrust legislation and created the Federal Trade Commission to enforce laws that promote competition in industry.
The online delivery networks of online are not railroads. But the country’s largest e-commerce businesses are taking on smaller delivery players left and right. FedEx completed its acquisition of Shoprunner this month to expand its online delivery network. Target announced this year that it would acquire Deliv, a same-day training company. Last month, Walmart announced it was buying Joyrun, a peer-to-peer delivery service for the last mile.
Elected President Joe Biden and Vice President-elect Kamala Harris – who have both spoken out about the potential dangers of a big tech monopoly – are going to the White House in January to ask questions about how the next government will run the industry. wrestling giants like Amazon.
“In every other revolution we have experienced technologically, it took between six years and a generation before a government would come in and level the playing field again,” Biden told The New York Times in January. “Do you remember all of a sudden that the Luddites smashed the machinery in the Midlands? That was their answer when the culture changed. Same thing with television. Same before that with radio. Same thing, but it’s huge. And it’s a the responsibility of the government to ensure that it is not abused. ‘
Amazon, Walmart and Target, whose share prices have risen over the past nine months, have benefited greatly from people staying home during the pandemic. But the brick-and-mortar retailer was caught flat-footed. To compete with the heavyweights, smaller retailers have turned to ‘spot market’ companies, which offer short-term delivery services but at much higher rates, said Zac Rogers, an assistant professor of business and supply chain management at Colorado State University. , said.
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“A lot of the smaller guys say we have to eat up the cost because it’s hard to pass the cost on to customers because so many people are struggling,” he said. “You have these great guys, and you have to keep up with the service level and competitive prices of these giants who have giant equipment – and that’s a challenge.”
As sales and share prices for Target, Walmart and Amazon rose, small brick-and-mortar businesses were crushed under the pandemic. Sales at small businesses rose 28% at the end of the summer compared to May, said Christopher Carlozzi, state director of the National Federation of Independent Business.
Rogers said: “Large retailers that have their own fleet and have their own ability to deliver in places have done well. It’s the more specialty people who rely on other logistics companies, which is really difficult because the supply is greater than the question for nine months. ‘