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Parcel Delivery Services boom during Covid-19

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Hermann Gruenwald at University of Oklahoma
Hermann Gruenwald
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Abstract

While the COVID-19 virus caused lockdowns worldwide, people stayed home unable o go shopping. But on-line sales increased as well during the pandemic and with it the delivery of parcels. Certainly, some have been shipped by mail, but that was the rare exception. And in Germany DHL and the German Postal Service is the same corporation. DHL, FedEx, and UPS are the major players in the parcel delivery service business worldwide. Smaller players are usually independent companies who act as subcontractors for the big three. Parcel delivery companies operate their own fleets of cargo airplanes this way DHL, FedEx, and UPS are independent of delivery via passenger airplanes. As passenger flights were canceled due to closed borders and corona lockdowns other air cargo got delayed or canceled. Parcel carriers volume also got increased due to those shifted cargo volumes. The Thai postal service would not accept EMS shipments quoting that the flights are canceled. EMS is part of the Universal Postal Union claimed to be the fastest cross-border postal service with 185 members, they are proud not to have surcharges but they suspended services in certain regions of the world. One has to say that the big three parcel carriers were mission-critical during corona times and dependable due to their in-house distribution system with warehousing, customs clearing, and transport via trucks, boats, motorcycles, and bicycles. FedEx lived up to its slogan The World on Time. FedEx in 2017 was the world’s largest airline in terms of freight tons flown. TNT Express is an international courier delivery service company and a subsidiary of FedEx with headquarters in the Netherlands where it was previously owned by the postal service, like DHL by the German postal service. But TNT was founded by Ken Thomas 1946 in Australia. DPDgroup is an international parcel delivery service based in France for sorter compatible parcels less than 30 kg with a volume of circa 5.3 million parcels worldwide per day. Hermes Logistik Gruppe (HLG) has an alliance with DPD focusing on-road service. Toll Group is an Australian logistics provider and a subsidiary of Japan Post Holdings, Global Express is its parcel arm. GLS General Logistics Systems is owned by the British Royal Mail but headquartered in Amsterdam, with Parcelforce Worldwide as the parent organization. According to consignor.com 13% increase in the number of parcels shipped overall, the rise of B2C e-commerce shipments of 17%, 9% increase of parcels shipped in Germany, 2% decrease in parcels shipped across borders and retail parcel volume down 8% compared to expected volume as of the end of April 2020. Many parcel couriers see Christmas level parcel volume during COVID-19. While other industries lay off people or work part-time due to corona, this industry faces a staffing shortage, showing that many people rather collect welfare than work hard in sorting facilities. Even the U.S. postal service planned peak surcharges for domestic parcels. The Canadian post also processed record parcel volumes through facilities that were never designed to conforming to COVID-related restrictions. Unfortunately, growth in parcel volume and revenue often were not enough to cover increased costs. February and March were slow months but now volume increases 40% to 50%in particular in the product category nutraceuticals, health and beauty, pharmaceuticals, apparel, and home office supplies. E-commerce sales overall grew 49% year to date and electronic sales 58% while online grocery sales are going up 110% according to Adobe’s Digital Economy Index. The new normal for parcel sales will certainly be substantially higher as corona earned the confidence of many new customers in on-line sales.
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Parcel Delivery Services boom during Covid-19
Dr. Hermann Gruenwald
While the covid-19 virus caused lockdowns worldwide, people stayed home unable o
go shopping. But on-line sales increased as well during the pandemic and with it the
delivery of parcels. Certainly some have been shipped by mail, but that was the rare
exception. And in Germany DHL and the German Postal Service is the same
corporation. DHL, FedEx and UPS are the major players in the parcel delivery
service business worldwide. Smaller players are usually independent companies
who act as subcontractors for the big three. Parcel delivery companies operate their
own fleets of cargo airplanes this way DHL, FedEx and UPS are independent from
delivery via passenger airplanes. As passenger flights were cancelled due to closed
borders and corona lockdowns other air cargo got delayed or cancelled. Parcel
carriers volume also got increased due to those shifted cargo volumes. The Thai
postal service would not accept EMS shipments quoting that the flights are
cancelled. EMS is part of the Universal Postal Union claimed to be the fastest cross-
border postal service with 185 members, they are proud not have surcharges but
they suspended services in certain regions of the world. One has to say that the big
three parcel carriers were mission critical during corona times and dependable due
to their in-house distribution system with warehousing, customs clearing, and
transport via trucks, boats, motorcycles and bicycles. FedEx lived up to its slogan
The World on Time. FedEx in 2017 was the world’s largest airline in terms of freight
tons flown. TNT Express is an international courier delivery service company and a
subsidiary of FedEx with headquarters in the Netherlands where it was previously
owned by the postal service, like DHL by the German postal service. But TNT was
founded by Ken Thomas 1946 in Australia. DPDgroup is an international parcel
delivery service based in France for sorter compatible parcels less than 30 kg with a
volume of circa 5.3 million parcels worldwide per day. Hermes Logistik Gruppe
(HLG) has an alliance with DPD focusing on road service. Toll Group is an Australian
logistics provider and a subsidiary of Japan Post Holdings, Global Express is its
parcel arm. GLS General Logistics Systems is owned by the British Royal Mail but
headquartered in Amsterdam, with Parcelforce Worldwide as parent organization.
According to consignor.com 13% increase in the number of parcels shipped overall,
rise of B2C ecommerce shipments of 17%, 9% increase of parcels shipped in
Germany, 2% decrease in parcels shipped across borders and retail parcel volume
down 8% compared to expected volume as of end of April 2020. Many parcel
couriers see Christmas level parcel volume during covid-19. While other industries
lay off people or work part-time due to corona, this industry faces a staffing shortage,
showing that many people rather collect welfare than work hard in sorting facilities.
Even the U.S. postal service planned peak surcharges for domestic parcels. The
Canadian post also processed record parcel volumes through facilities that were
never designed to conforming to covid-related restrictions. Unfortunately growth in
parcel volume and revenue often were not enough to cover increased costs.
February and March were slow month but now volume increases 40% to 50%in
particular in the product category nutraceuticals, health and beauty,
pharmaceuticals, apparel and home office supplies. E-commerce sales overall grew
49% year to date and electronic sales 58% while on-line groceries sales are going
up 110% according to Adobe’s Digital Economy Index. The new normal for parcel
sales will certainly be substantially higher as corona earned the confidence of many
new customers in on-line sales.
Keywords:
Corona, covid-19, parcel couriers, DHL, FedEx, UPS, TNT, Toll, Hermes, GLS, DPD,
References:
Gath, Max (2016). A Case Study: Courier, Express, and Parcel Services. July 2016.
DOI: 10.1007/978-3-658-14003-8_7. In book: Optimizing Transport Logistics
Processes with Multiagent Planning and Control
Gibson, S. and Race. N. (2012). A market study of packets and parcels services.
January 2012. DOI: 10.4337/9780857935816.00021
Ulmer, M. Brinkmann, J. and Mattfeld, D. (2015). Anticipatory Planning for Courier,
Express and Parcel Services. January 2015. DOI: 10.1007/978-3-319-13177-1_25.
In book: Logistics Management. Publisher: Springer
Yang, D. (2017). Development Process and Characteristics of Chinese Parcel
Service Industry. March 2017. The Journal of China Studies 20(1):105-119.
DOI: 10.20288/JCS.2017.20.1.6
Zhou, M. Zhao, L. Kong, N. and Wang, S. (2020). Understanding consumers’
behavior to adopt self-service parcel services for last-mile delivery. January 2020.
Journal of Retailing and Consumer Services 52:101911.
DOI: 10.1016/j.jretconser.2019.101911
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  • 105-119
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  • J Brinkmann
  • D Mattfeld
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