Logistics competition slows down under cost pressure! Consumers are more relaxed about delivery speed

According to foreign media reports, the competition to provide consumers with faster delivery services is slowing down due to rising fuel costs. At the same time, consumers' requirements for delivery speed are also relaxing.

In the years before the pandemic, Amazon was the leader in e-commerce delivery, with few rivals able to match its ability to meet consumer expectations for online orders to be delivered within two days.

Amazon has been preparing to turn things around again and plan to restore its previous same-day delivery service levels. However, the epidemic disruption and rising costs have made Amazon a bit overwhelmed. New research shows that Amazon is unlikely to restore its delivery levels in the short term because the cost of fast delivery is getting higher and higher.

Logistics costs have been rising rapidly over the past year, and the sharp rise in fuel costs has exacerbated this rise. Due to the increase in fuel surcharges, retailers' average shipping costs have increased by 10-15% compared to a month ago.

Retailers are adjusting strategies to save on delivery costs, such as allowing consumers to buy online but pick up orders in stores, or increasingly using pickup points for consumers to collect orders.

E-commerce giants and their logistics arms have also been hit, with their logistics and delivery costs breaking new records. For example, Amazon's costs have almost doubled from 2019 to more than $150 billion, while SF Holdings, the parent company of SF Express, warned of a loss of 1.1 billion yuan ($170.62 million) in the first quarter.

According to a report, Amazon is now no longer sending back returned items, but is choosing to destroy or resell them to avoid additional costs.

Even consumers are relaxing their expectations for delivery speeds: According to a recent report from UPS Capital, many prefer an estimated time of arrival, real-time tracking of packages or shipping insurance over faster delivery.

The report noted that while two-day delivery has long been considered the "gold standard" for e-commerce delivery, today's consumers have new priorities, with as many as 80% preferring other benefits.

That could be because supply shortages have changed consumers’ minds, making them less likely to place a premium on fast delivery, while demand for same-day delivery is also waning as concerns about inflation curb consumption.

Editor ✎ Xiao Zhu/

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