In the online small business realm a service called dropshipping is used to keep item costs down. Dropshipping is where a warehouse or vendor ships to the customer directly as a third party. While shipping is generally free, shipping times are longer, but the overall cost of goods can be up to 50% less than retail. Unfortunately, shipping is turning into unreasonable and unpredictable timelines. During 2018, dropshipping time from Asia was about 21 days. Now economy shipping is taking up to 80 days. This is causing disappointed customers, frustration for everyone, unnecessary refunds, and loss of business for small online shops. With a bit of Google search, anyone can find several articles on shipping delays occurring everywhere, even in the realm of Walmart and Amazon. So, what is causing this delay in shipping, and what can be expected this upcoming holiday season and beyond?
After reading several articles, one particular theme became apparent for the causes of shipping delays: COVID's lasting effect on global systems through simple supply and demand economics. Here are some key take-aways:
- In an article on Freightos.com, shipping demands paired against the issues faced with COVID have caused port congestion. In July 2021, the port in Yantian was, "incident that resulted in significantly reduced operations for three weeks."
- During shutdowns and continued COVID-19 variant concerns, many consumers turned to online shopping for non-grocery items, and as restrictions are lifted, people are again shopping locally. This increase in demand for goods creates stress in the available means of preparing items for shipping and the act of shipping goods to overseas markets. According to Freightos.com, "US ports are overwhelmed by peak season imports. The ports of LA/Long Beach now have more than 30 ships waiting in the bay, approaching the record set at the start of the year."
- Overseas companies, freight crews, cargo, and flight crews are under no-tolerance COVID restrictions, which sometimes leave planes or cargo ships less than full capacity... up to 40% empty. These spacious shipments then cause a backlog over time, along with delays in crews returning to work.
- Smaller businesses generally ship orders by air only, through 'economy' shipping. Some large businesses pay air shipping costs at a premium which pushes out the smaller business and dropshipping orders. A June article on Printfection.com states, "At this time we are evaluating our orders queue and options daily but for the time being all orders placed with priority shipping methods are being treated with the highest priority." Explained further, Printfection shared the disappointing truth, "...we are seeing an average shipping speed of about 20-25 business days for 'lowest-cost' orders shipped within the US and around 8-10 weeks for orders being sent internationally. These timelines include both the time required for us to fulfill the order and the shipping transit time for UPS/USPS."
- Another ongoing issue is the change in available workers. Nearly every industry is affected, whereby recruiting good employees or any new employee is challenging. This is from workers refusing to return to their former jobs, becoming overworked/burnt-out or sick with COVID-19, choosing other lines of work, and further complicated by a lack of applicants.
Further Delays Expected
As many know, those in the USA will start experiencing delayed standard letter shipping soon, if they have not already. The June announcement was a hard one to swallow, especially in areas where mail already runs late. In an article on this USPS announcement, Jacob Bogage and Kevin Schaul provide a map to put in your zip code to see the new shipping guidelines. So those of us in the Pacific Northwest will have to plan mailing things at least two days earlier than we did a year ago for holidays and birthdays for recipients on the East Coast.
Waiting and Saving, Or Moving On
Will this be the new normal for shipping? While these delays are likely to continue for several months, the pandemic will end eventually, people will return to work, and companies will hire additional workers to balance out workloads. It will take time. The upcoming holiday season will be tough, with the already congested stream of incoming goods and seasonal increase in demand.
What all this information comes down to is the bottom line of shopping style and shipping time expectations. Some small businesses will start to carry items' in-house' and raise costs to cover shipping. Others will realign stated shipping expectations on their sites and hope the savings will be worth it to their customers. For customers who decide to move on to big box stores, it's pretty understandable. This shipping problem is not easy, and small business owners appreciate those who will stick with us through this chaotic time.
What Should Consumers Buy Now?
While it seems early to consider holiday shopping for November and December, if you plan on saving money without fighting large crowds, early September is an excellent time to purchase items.