The Indicator from Planet Money - Shipping Delays: Why Your Packages Are Taking Forever

As the holiday season approaches, people are beginning to notice an online shopping trend: shipping delays. Today, we explain why packages are taking longer to ship than usual this year. | Donate to your member station here.

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Content Keywords: small business owner question Megan Thomas case customers
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Megan Thomas lives in Louisville, Kentucky, she is the co-owner of a small online business just to Herb and her partner pinch Spice Market and recently she got the kind of email. But if you are a small business owner, you do not want to get a said I purchase your spice and your store said it would be here by December one through twelve!!! This is December 3rd, and no spice?! X 3 there's a lots of exclamation points here. And then he just signed his name and said not happy. OK impatient there much email correspondence. The window for delivery was December 1st through December 12th. It's only the third all right still time but it is the case of Sally that people do not like it when something takes a long time to deliver. That's very true. Welcome to retail and probably figured out by now Megan's company.

Sell spices and as you can also tell one of her customers is unhappy because the order he placed is what he considered to be late and to be clear. This was not Megan's fault. She got the order out on time. The problem here was shipping shipping right now. It has been great up until about a week ago and that's when Black Friday cuz of the pandemic online sales have just exploded this year and not just for holiday shopping for knebel according to a study from Adobe last year. There was a bump between October and November as you'd expect when online grocery orders went up 10% for Thanksgiving this year that same bump was five hundred and sixty percent.

I'm Carlos Garcia and as you just heard on joined today by Sally herships Ali you brought us this great story. Welcome back. Thank you. I'm on time tomorrow on time. You're always super on time. No reason for any super in Asia and rude and obnoxious emails, but back to the show the store you brought us Ally is about how e-commerce is growing far more quickly than expected and how that is led to a kind of classical economic problem of supply and demand and how they are out of sync the country was in the middle of this huge economic crisis emarketer. Comprar said that online sales would increase this year by about 20% but sales are growing so quickly. They have almost double that number and not surprisingly shipping companies are having trouble keeping up and course the holiday season is now upon us for lots of businesses. This is such a critical time of the year when they can make a huge chunk of their sales in just

Couple of months is it today on the show? We are checking in with one small business to see how it is coping with the shipping shortfall and we're going to take a look at the Holiday shipping landscape over all that's right after a quick break.

Support for this podcast on the following message come from E-Trade trading isn't for everyone. But each rate is whether it's saving for a rainy day or your retirement you trade has you covered they can help you check your financial goals off your list and with a team of professionals giving you support when you need it. You can be confident that your money is working hard for you get more than just trading with each ride to get started today visit NPR for more information E-Trade Securities, LLC member finra sipc. We all know what it's like when we order something online and it's late. It's a pain in the you-know-what, you know, for retailers shipping delays can set off this kind of ripple effect of these far more serious and expensive problems. For example, return those pants that were too small or the sweater that turned out to be kind of a weird color you are I might just shove that in a box and send it back to the retailer. But if the Box holding that sweater is stuck in a warehouse somewhere.

Then it can't be sold while it's just sitting there obviously do for retailers these shipping delays can end up short of tying up all their money. Yeah and Megan the co-owner of the spice business as one of her biggest fear is from shipping delays is losing customers. She says most of our customers 65% return and for the most part those customers are understanding about delays, but it can be hard to hold onto new customers. When what they ordered is late or doesn't show up at all in one respect though. The pandemic has helped Megan's business. She has had incredibly rapid growth filled or eight times higher for her than last year, but now coming up to the holiday season shipping is really crushing her. She uses the post office. So she's had a taste of this back during the summer when the Trump Administration started cutting the post office Budget on a scale 1 to 10 for the delays were at a 9 or 10 at times. It's the worst we've ever seen it Megan says the packages of spicy.

they were just not moving 10% of the packages were getting delayed and 5% or sometimes even more we're just getting totally lost what we would do we ate that cost we want our customers be happy it's not their fault that this is happening so we would ship out another package of their spices for free you also keep out coupons to customers ten bucks off as a way to say I'm sorry your package is delayed and all of this is obviously really expensive this is sort of a classic problem where supply and demand don't match up in this case demand for shipping Services has just shut up and Supply just hasn't caught up yet and don't one of two things tends to happen in a situation like this either the price of the products in this case shipping Services goes up or the product itself these shipping Services just failed to materialize and that's what's Happening Here we do not have a big enough supply of shipping services and businesses

Especially small businesses, but they've already taken such a beating from the pandemic or suffering and so with this shipping shorted looming and the holidays coming up Megan said she did a number of things to prepare remember she and her partner had this big cash cushion standing by so she says first they bought the supplies they needed like tens and bags for spices ahead of time. So she doesn't have to deal with shipping delays and she also found this very special work around we've become friends with a lot of the people working in the post office. It's helped to drop off some space samples to and kind of I'm not going to say bribe, but it is arrived. I am going to say bribe to kind of get to the front of the line and sometimes they can do that. Sometimes they can't why not just use FedEx or UPS. So we use USPS. I merely this is a big question to answer so I'm going to jump in and summarize what Megan said here, which is that USPS is awesome and affordable and that first small biz.

This is like hers other services like UPS and FedEx can be more expensive and there's another part to this which is the FedEx shared an email with us, which says in part and I'm quoting while FedEx is known for its speed and reliability. We encourage our customers not to wait until the last moment to ship their holiday gifts to friends and family and to Shop and Ship early this year. That's basically FedEx admitting that hey there could be problems with shipping delays this year and it is still going to cost you an arm and a leg even the big companies could be dealing with delays this year and Sally I think it's only right that we let Megan get to the other part of the answer to this question. We really don't have a lot of sway with UPS and FedEx. They give a lot of priority to big box stores who have contracts with them for Chevy discounts in for priority shipping meaning they get kind of a head of the line. So it's really hard to compete with that. I know both come.

He is to ask him about this FedEx says it doesn't discuss customer agreements publicly. UPS says that Megan statement is not accurate and it's really working to help small businesses, which have been had extra hard by the pandemic we can consider Megan to actually be kind of Lucky after all she has a cash cushion to help her business get through this a lot of companies don't and they may have to take out loans and that could cause its own set of problems. Yeah and speaking of problems. I got an update from Megan a couple of days ago. She says the shipping delays or getting worse for her company 20% of their orders are delayed up to four days right now packages or getting lost she is working around the clock doing customer service dealing with questions like that email we heard earlier she was up until 2:30 in the morning the night before she sent me this email so she and her partner just decided they are going to offer UPS shipping to their customers and eat half the cost.

Do we have some simple advice for everyone which is order your holiday presents now as soon as possible, unless you want Santa to have to work overtime this year which might even make him late Valley. Thanks for bringing us the story. Thanks for having me. This episode of the indicator was produced by Nick fountain. In fact check by Shawn cell Danya indicators editor is Patty Hearst and the indicator is a production of NPR.
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