Record online spending combined with a driver shortage exacerbated by Brexit could create the ‘Mount Everest of Christmas peaks’ this year, delivery specialist ParcelHero is warning.
With operators already seeing capacity stretched by the surge in online shopping triggered by the pandemic and a worsening driver shortage, ParcelHero is predicting that with Christmas this year likely to be 50% busier than in 2019, the situation could reach breaking point.
ParcelHero is urging operators to work closely with retail partners to avoid a driver shortage and strained supply chains or face Christmas chaos similar to that seen during Black Friday in 2014 when hundereds of thousands of deliveries were delayed.
David Jinks, head of consumer research, said the double-whammy of families, separated by Covid restrictions, mailing their gifts, combined with a shortage of skilled drivers created by Brexit, could create major delays.
Jinks said: “The huge demand for deliveries is being compounded by the reported loss of a quarter of a million EU nationals from the UK economy this year, which will lead to a 30% shortfall in drivers and warehouse workers."
Even though many retailers and delivery companies are attempting to hire thousands more staff in preparation for this year’s Christmas peak, this might be difficult to do in practice. Retailers may need to radically shake up their Christmas distribution plans.
Despite a partial pick-up of High Street store sales in recent months, online sales are still over 50% higher compared to a year ago. ParcelHero had its busiest day ever just last week and online pure-play Ocado has overtaken Tesco to become the UK’s most valuable retailer. This year’s home delivery growth is unprecedented for both parcels and groceries.
Jinks warned that with capacity already stretched, operators cannot underestimate the impact of Christmas.
“For many retailers, Christmas at least doubles their usual sales. Indeed, there are some companies that run at a loss for the rest of the year and make almost all their profits at Christmas. With many families unable to get together this Christmas, more people than usual will be sending presents to loved ones and ordering their gifts online. We anticipate Christmas volumes could be 50% higher than last year."
Jinks pointed to the Black Friday chaos of 2014 when an increase in the event's popularity saw nearly one in three online shoppers experience problems with their orders that Christmas.
He added: “The spike in online orders caught many of the UK’s most respected brands off-guard. The likes of AO.com, M&S, River Island, Currys-PC World, Shop Direct and Debenhams all admitted to disruption to their delivery networks in fulfilling the record amount of orders. Even the e-commerce leader Amazon found itself overstretched, while Yodel was forced to stop picking up parcels from retailers as it struggled under the weight of demand.
“There’s no doubt the problems of Christmas 2014 could be repeated this year if retailers underestimate the scale of the challenge.
“Berry Recruitment, one of the largest temporary worker suppliers in the country, says demand for delivery drivers is running at 30% above supply. It believes a combination of a huge increase in online ordering and fewer European workers has created a perfect storm.
“This view is supported by findings from the business news service Quartz," he warned. "It analysed data from the government’s Office of National Statistics (ONS) and found around a quarter of a million people from the EU have left the UK economy since the start of the year, because of the impact of both Covid and Brexit."
