During a record surge in package volume, UPS and FedEx are facing a delivery van shortage heading into the holiday season.
Why UPS and FedEx are Facing a Delivery Van Shortage
The van shortage that UPS and FedEx both face came as a result of a perfect storm. Obviously, COVID-19 continues to rage on, which has prompted more shutdowns across the country. Some of these areas include factories that produce the high-ceiling cargo vans that UPS and FedEx rely on…putting a stop to vehicle production at a time when eCommerce package demand is higher than ever, and heading into a peak holiday season.
Interestingly, shipping carriers are forced to outsource to other vehicle providers for delivery vans during production shortages like this one. In turn, companies such as Merchants Fleet provide vans to delivery companies like UPS and FedEx. Now, these third-party companies are racing to provide inventory to the shipping carriers before the peak holiday season.
Brendan Keegan, Chief Marketing Officer of Merchants Fleet, weighed in on the urgency of the matter.
“If there’s a cargo van out there, we’re trying to buy it.”
Joel Eigege, vice president of rental products for Ryder System, Inc—another organization which provides rental vehicles to delivery companies—provided a similar statement.
“There is definitely a shortage of units in the market, specifically raised roof cargo vans for delivery,” Eigege said.
Van Shortage Won’t Affect Delivery Capacity, Just Profits
Neither UPS nor FedEx expects the delivery van shortage to affect delivery capacity, which is good news for consumers. It does, however, directly increase both companies’ costs of doing business. Expecting surging demand, carriers have already priced surcharges into their services for this holiday season. However, they did so before this delivery van shortage came into play. So, in order to combat these rising costs, carriers like FedEx and UPS would need to raise prices again…which wouldn’t go over too well with their customers.
No Matter Which Carrier You Use, Ship Your Packages Early to Avoid Delays
UPS and FedEx are the only major carriers facing the delivery van shortage. On the other hand, the US Postal Service remains unaffected. However, that doesn’t mean that USPS isn’t facing its own challenges going into the holiday season. The fact of the matter is, shipping industry insiders expect package volume to be the highest it’s ever been after this Black Friday. Inevitably, this peak demand will lead to delays for all carriers…especially if COVID-19 continues to prompt shutdowns across communities nationwide.
So, if you’re an online seller, it’s time to prepare. You can best offset this bottlenecking by getting your shipments out as soon as possible. No matter which carrier you choose to ship with, sending your holiday packages out in time is the best way to get around delays—especially before the holiday shipping deadlines. The longer you wait to ship, the higher the likelihood your packages will be delivered later than initially anticipated.
Learn more about the 2020 USPS holiday shipping deadlines.