How Has Covid-19 Impacted E-commerce & International Shipping?
The Ladingo Team
November 9, 2020
The outbreak of the novel coronavirus pandemic, known as Covid-19, has brought with it an interesting duality. On the one hand, economies around the world are in the midst of an unprecedented recession. People are out of work and financial security is at a low. On the other hand, lockdowns and infection concerns have created a sense of urgency among consumers of all walks of life. From hoarding toilet paper and produce, to mass ordering art supplies and electronics for children engaging in remote learning and adults now working from home, people are spending money – and they’re spending it online.
Small parcel orders are up, large shipments are down
People are changing what they’re buying and how they’re buying them. On average, online orders had more than doubled year-on-year in North America and increased by 50% in Europe, by the end of May alone.
To safely obtain the items they seek without breaking the bank, shoppers are turning to global e-commerce sites and are making cross-border purchases that perfectly integrate affordability and shipping efficiency. That being said, the OECD reports that container trade in selected ports across the globe sharply declined by approximately 10% in the first quarter of the year, and then further as the year progressed. This, in line with the decline in global demand for items from local suppliers. Customers are bypassing businesses in their home countries experienced in importing the items they need from sourcing agents in bulk, in favor of acquiring singular and small parcels from global suppliers on their own. They’re giving their business to whoever provides them with the products they want as quickly and as affordably as possible.
The result: those businesses who generally order large shipments of high volume goods to be fulfilled via ocean freight in shipping containers via a 3PL (third party logistics agent) are not making nearly as many orders. While some customers are putting down money for items already brought into their home countries by these businesses, others are not willing to spend more than they absolutely must, and are willing to search for e-commerce merchants around the world offering better value for their money. This, even if it means dealing with clearing customs, import taxes and duties, VAT, and other stages of shipping, on their own.
Trust in the supply chain has been broken
How else has Covid-19 affected global e-commerce and shipping? Businesses and individual consumers alike have become warier of doing business with factories in China, where the virus began, as well as with manufacturers in other countries, where the Covid-19 has hit especially hard. This decrease in trust stems from a fear of the virus living on physical objects, as well as from concerns over a lack of healthy and available manpower, leading to fulfillment delays and poor quality final products.
A Digital Commerce 360 survey reveals that 44% of retailers expect coronavirus-related product delays, and 40% expect inventory shortages, leading many merchants to look into partnering with other suppliers in other localities, where the virus has not affected businesses as severely. This, even though cost differences will likely lead to less profitability upon resale.
Anti-Covid measures challenge the entire logistics chain
The measures set in place to protect people around the world from the novel virus are precisely those measures that are making it harder for businesses to secure expedient and affordable cross-border shipments, as they – and their customers – are used to enjoying. Fewer people are allowed to be in any confined space at a given time, which means fewer hands on deck ensuring orders move from one point along the logistics chain to another. And border controls are tighter, making the process of clearing customs more difficult and time-consuming. This new normal has injected much volatility into the entire logistics chain, especially with respect to cost and availability, with no end or predictability in sight.
How have the e-commerce and international shipping industries continued to survive the ongoing pandemic?
Businesses of all shapes and sizes are being affected by Covid-19. B2B and B2C. Online and brick-and-mortar. E-commerce has, by far, made the most lemonade of this sour-as-lemons situation, as consumers’ consumers’ shift toward e-commerce has been accelerated by no less than five years in just a few months’ time, and international shipping for small, personal purchases has flourished in response.
Business and individual use of e-payments, digital certificates, and signatures have been instrumental in helping both of these industries continue to operate, as they enable less personal contact during transactions, and promote the speedier deployment of paperwork to stakeholders across the globe.
Another way e-commerce and international shipping businesses can and are surviving Covid-19’s effects is by partnering with logistics solution providers, like Ladingo. Ladingo’s free, complete logistics solution provides you with immediate, full, and transparent cross-border shipping rates, automated logistics documentation, tracking – for you and your customers – and more, so you can focus on reassuring your customers that you’re Covid-safe and strong, and a smart choice for their pandemic-induced purchases.
Impact your e-commerce or international shipping business for the better, by partnering with Ladingo today! Click here for more information.
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