The new series of lockdowns being initiated by governments around the world may be having devastating economic consequences, but they have brought significant benefits to last-mile delivery and fulfilment operators as the boom in online retailing continues. With the holiday season in the offing, there are significant risks that parcels companies may well struggle to keep pace with demand, and consequently, all have been investing in new facilities and hiring workers, both seasonal and permanent.
Below is a roundup of some of the largest recruitment and investment programmes which have been designed to cope not only with the secular growth and volatility of e-retail (caused in part by COVID lockdowns) but also with the upcoming holiday season.
In previous years, coping with the holiday season has been made more difficult by the low levels of unemployment in many parts of the world. This year, this will not be the case. As unemployment rates rise, the logistics and last-mile sectors will have a pool of labour, which should reduce pressures on costs. 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. 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 increase volumes translate into much enhanced profitability.
Across the logistics industry
The growth of express can be attributed in large part to strong e-commerce sales as consumers turned to online retail during lockdowns and stay-at-home orders. This caused 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 is this hiring spree the case in other logistics markets?
Over the year, much of the logistics industry has struggled as a result of the Coronavirus pandemic and logistics markets have been affected differently. For example, Ti forecasts the global express & small parcels market will expand by 7.2% in 2020, whereas the freight forwarding market is forecasted to contract by 10.2% over this year.
To gain a wider view of the industry’s seasonal hiring plans, Transport Intelligence conducted a flash poll. The snapshot saw 60.4% answer that they would be making no changes to their hiring process this year. Whilst 20.7% said their company would be hiring less staff and 18.9% more employees would be required.
This poll is a snapshot of the industry as a whole and suggests that while some express providers are needing to increase staffing capacity and make investments, much of the logistics industry isn’t seeing the same COVID-19 boost to hiring plans and peak season prospects over and above other years.
Source: Transport Intelligence, November 10, 2020.
Author: Transport Intelligence
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)