Online shopping surge could lead to holiday delivery delays

Online shopping surge could lead to holiday delivery delays
Delivery firms are warning customers not to leave shopping over the Christmas period too late, or risk missing out on deliveries, with many companies already working at full capacity before the annual holiday surge. (AFP)
Short Url
Updated 12 November 2020

Online shopping surge could lead to holiday delivery delays

Online shopping surge could lead to holiday delivery delays
  • Companies already at online capacity due to the coronavirus disease pandemic

NEW YORK: Retailers and carriers are preparing for an online holiday shopping surge that could tax shipping networks and lead to delivery delays.
FedEx and UPS are ramping up their holiday hiring while expanding their weekend operations and asking retailers to use their shipping network when there is more slack. And stores are pushing shoppers to buy early and are expanding services like curbside pickup to minimize the need for delivery.
For the last few years, many retailers had been using their own physical stores, in addition to their distribution centers, to fulfill online orders. But now they are designating some of those stores to handle even higher volumes. Best Buy, for example, converted space in 250 of its 1,000 stores this fall to manage online orders.
The moves come as most of the carriers have been at full shipping capacity for months as shoppers shifted their buying online during the pandemic.
“We are warmed up for what we’re calling the ship-a-thon,” said Brie Carere, chief marketing and communications officer at FedEx. “Like everything else in 2020, this is going to be an unprecedented peak season. We’ve actually seen three years of growth in e-commerce pulled forward. So we are expecting a ton of volume.”
Carole B. Tome, CEO of UPS, told analysts last month she expects “a pretty peaky peak.”
Amazon, which has been growing its own delivery network so it doesn’t have to rely as much on UPS and the US Postal Service, is nonetheless warning shoppers not to wait until the last minute to buy gifts. While the world’s largest online retailer delivers more than half of its packages itself, it still relies on other carriers to get orders to shoppers.
“It’s going to be tight for everyone and we will all be stretched,” said Brian Olsavsky, Amazon’s chief financial officer. “And it’s advantageous to the customer, and probably the companies, for people to order early this year.”
Satish Jindel, the president of ShipMatrix, which analyzes shipping package data, predicts 7 million packages a day could face delays from Thanksgiving to Christmas. That’s because he’s expecting a total shipping capacity for the industry to be 79.1 million parcels a day during the 34-day period, with 86.3 million packages looking for space. Last year, total capacity was 65.3 million packages with demand at 67.9 million packages a day.
Right now, Jindel is predicting delivery delays of one or two days for parcels.
US online holiday sales are expected to shatter previous records. Adobe Analytics, which measures sales at 80 of the top 100 US online retailers, predicts a total of $189 billion in online holiday sales, a 33% increase compared to last year. That’s equal to two years worth of holiday e-commerce sales growth shoved into one season.
But even with the online surge, overall holiday sales are expected to see only modest gains compared to recent years. Consulting firm Deloitte expects total sales, including online, to rise between 1% and 1.5% during the November through January period. That’s compared with a 4.1% increase last year for the November and December period, according to an analysis by the National Retail Federation. The trade group says it won’t be coming out with a forecast until this month given so much uncertainty.
Retailers can’t afford to upset shoppers with delayed deliveries or gifts that come after Christmas so they’re stepping up their game.
Kohl’s says it has tens of thousands of items on its website available for curbside pickup. The retailer doubled the number of drive-up parking spaces at its store locations to support increased demand. Likewise, Target has also doubled the number of parking spaces for its drive up services, to 8,000.
Meanwhile, carriers have added holiday surcharges to certain packages, a blow to retailers already struggling with higher costs during COVID. Jindel says the US Postal Service might be a good alternative for retailers now that it has gotten through the deluge of mail-in ballots during the elections. He estimates that the Postal Service’s temporary surcharges mostly range from 25 cents to 40 cents per package is considerably lower than $1 to $5 per package at major carriers.
“Our network is designed to handle temporary and seasonal increases in volume and we have the ability to deliver those additional holiday packages in a timely manner,” said Kimberly Frum, a spokeswoman at the US Postal Service.
For the holidays, FedEx is hiring 70,000 workers, while UPS is in the throes of hiring more than 100,000 temporary employees.
Lee Spratt is the Americas CEO for DHL eCommerce Solutions, a division that specializes in processing small packages for mid- to large-size shippers. He predicts online shopping to be up to 50% higher this holiday season compared to the year-ago period. The division has already been grappling with a 40% surge in online orders since the pandemic began.
It’s hiring 900 more permanent workers to its current labor force of 3,000. It also will hire 1,400 temporary workers, about the same as last year because the company is investing in more permanent workers instead.
In September and October, it also upgraded and some cases added new sorting machines in six key cities including Baltimore and Atlanta, in order to process more parcels.


Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable
Updated 44 min 24 sec ago

Fitch revises Egyptian bank’s outlook to stable

Fitch revises Egyptian bank’s outlook to stable

RIYADH: Fitch Ratings has revised Commercial International Bank (Egypt) S.A.E.’s (CIB) outlook to stable from negative while affirming the bank’s long-term issuer default rating at “B+” and viability rating at “b+.” 

According to the ratings firm, pressures on the domestic environment have eased since the end of the third quarter of 2020 moderating downside risks to Egyptian banks’ credit profiles.

It said this reflects improving foreign currency liquidity, with the banking sector’s net foreign assets reaching $3.5 billion in April 2021, a reversal of a net foreign liability position of $5.3 billion at the end of April 2020. This was supported by a strong increase in foreign holdings of Egyptian treasuries to $29 billion in May 2021.

Fitch expects real GDP growth to accelerate to 6 percent in 2022.


Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion
Updated 48 min 53 sec ago

Egypt’s domestic liquidity exceeds $213.9 billion

Egypt’s domestic liquidity exceeds $213.9 billion

CAIRO: Egypt’s domestic liquidity rose to EGP 5.36 trillion ($213.9 billion) at the end of June 2021.

According to the official data, liquidity grew by 1.9 percent monthly. Domestic liquidity increased by 18.3 percent annually, compared to EGP 4.53 trillion in June 2020.

The money supply rose during June to EGP 1.25 trillion, compared to EGP 1.22 trillion in May 2021.  Money supply includes deposits in local currency and cash in circulation outside the banking system.

Last November, the Central Bank of Egypt decided to reduce both the overnight deposit and lending rate and its main operation rate by 50 basis points, to 8.25 percent, 9.25 percent, and 8.75 percent, respectively.

Last month, the central bank froze the interest rate for the fourth time this year.


Saudi Arabia reiterates its commitment to fight climate change

Saudi Energy Minister Abdulaziz Bin Salman. (REUTERS file photo)
Saudi Energy Minister Abdulaziz Bin Salman. (REUTERS file photo)
Updated 02 August 2021

Saudi Arabia reiterates its commitment to fight climate change

Saudi Energy Minister Abdulaziz Bin Salman. (REUTERS file photo)
  • Prince Abdul Aziz and Sharma discussed the framework of the circular carbon economy adopted by G20 leaders during Saudi Arabia’s presidency in 2020

RIYADH: Saudi Energy Minister Prince Abdul Aziz bin Salman recently held a meeting with COP26 President-designate Alok Sharma and discussed ways to enhance cooperation in confronting global climate change.
The Saudi minister highlighted the Kingdom’s qualitative initiatives to help reduce emissions and preserve the environment, foremost of which are the Saudi Green and Middle East Green initiatives.
Saudi Crown Prince Mohammed bin Salman launched these initiatives on March 27. These initiatives are aimed at reducing carbon emissions in the region by 60 percent through the use of clean hydrocarbon technologies and the planting of 50 billion trees, including 10 billion in Saudi Arabia.
The “green” initiatives, which are part of the Vision 2030 strategy, will place Saudi Arabia at the center of regional efforts to meet international targets on climate change mitigation, as well as help it achieve its own goals.
Prince Abdul Aziz and Sharma also discussed the framework of the circular carbon economy adopted by G20 leaders during Saudi Arabia’s presidency in 2020.
While the Gulf Cooperation Council (GCC) region has long been a leading global supplier of fossil fuels, renewables are complementing its own energy mix, offering eco-friendly alternatives such as clean hydrogen fuel to decarbonize and reduce gas emissions.
With around 70 to 90 percent of the Arabian Peninsula facing the threat of desertification, owing to past and ongoing human activities, massive afforestation, and land restoration initiatives hold hope for millions of hectares of degraded land.
Unfortunately, in a G20 meeting held in Italian city, Naples on July 22-23, energy and environment ministers failed to agree on the wording of key climate change commitments in their final communique after China and India refused to give way on two key points.
One of these was phasing out coal power, which most countries wanted to achieve by 2025 but some said would be impossible for them.
The other concerned the wording surrounding a 1.5-2 degree Celsius limit on global temperature increases that was set by the 2015 Paris Agreement.
Average global temperatures have already risen by more than 1 degree compared to the pre-industrial baseline used by scientists and are on track to exceed the 1.5-2 degree ceiling.
“Some countries wanted to go faster than what was agreed in Paris and to aim to cap temperatures at 1.5 degrees within a decade, but others, with more carbon-based economies, said let’s just stick to what was agreed in Paris,” said Italy’s Ecological Transition Minister Roberto Cingolani.
The G20 meeting was seen as a decisive step ahead of United Nations climate talks, known as COP26, which take place in 100 days’ time in Glasgow in November.


Saudi CITC pushes for more tech listings on Tadawul

Saudi CITC pushes for more tech listings on Tadawul
Updated 02 August 2021

Saudi CITC pushes for more tech listings on Tadawul

Saudi CITC pushes for more tech listings on Tadawul
  • The CITC is aiming to enhance the investment environment in the telecoms and IT sectors

RIYADH: Saudi Arabia’s Communications and Information Technology Commission (CITC) signed an initial agreement with the Saudi Stock Exchange pushing for more listing of technology operators in the Kingdom on the Saudi stock market.

The CITC is aiming to enhance the investment environment in the telecommunications and information technology sector, the postal sector and delivery applications, SPA reported.

Financial market listings provide greater investment opportunities and helps companies to expand and enter new markets, and develop products, CITC said.

It also contributes to strengthening corporate governance with a regulatory framework of high quality and institutional value.

This agreement comes in line with the Vision 2030 objectives aimed at making the Kingdom a leading global logistics platform and a connecting hub for the three continents.


Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA
Updated 02 August 2021

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA

Saudi mortgage lending surges 27 percent in first half of 2021 — SAMA
  • Saudi banks and financial institutions lent SR79 billion for residential mortgages H1 2021

RIYADH: Residential mortgage financing in Saudi Arabia jumped by more than a quarter in the first half of the year even as new lending slowed in the second quarter, central bank data showed.

Saudi banks and financial institutions lent SR79 billion for residential mortgages in the first six months of 2021, up from SR62.1 billion in the same period last year, SAMA said in its monthly bulletin. The number of transactions increased 14.2 percent to 153,054 in the period.

The value of mortgages provided in the second quarter slid to SR31.1 billion riyals from SR49 billion in the first quarter as the supply of new properties fell amid changes to the building code.

“The number of contracts increased in the first half, but temporarily decreased in the past three months, but due to the reorganization of property evaluation by the Real Estate Fund, and the application of the new Saudi building code with the temporary ambiguity until it is well understood, and the lack of supply of ready housing units,” Mohamed AlKhars, a member of the housing program advisory board and the chairman of Innovest Property Co. told Arab News.

“I expect the volume of financing and the number of contracts to gradually increase in the fourth quarter of 2021,” he said.

Financing for villas accounted for 80 percent of residential real estate loans in the first half of the year, with 15.9 percent for apartments and the remainder for land, the SAMA data showed.

“Villas are still more desired by citizens and more available in the market, and apartment supply is still low now, as the developers are still focusing on building villas due to low interest in apartments which might continue for a while,” AlKhars said.

The mortgage market has seen stratospheric growth since SAMA began collecting the data in 2016 when a total of 22,259 real estate loans were issued. In 2019, that number jumped to 179,220 from 50,496 the previous year, before reaching 295,590 in 2020.