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Retailers urge shoppers to buy early amid shipping crunch

Inside Telecom Staff

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A number of retailers, including J.C. Penney, Lowe’s and Kohl’s, are telling shoppers they need to place their online orders soon or else pay expedited shipping fees if they want to get their packages delivered in time for the holidays.

The earlier-than-usual deadlines come as more people turn to online shopping during the pandemic, creating a logjam for shipping companies as well as delivery delays. For some retailers, like H&M and Lego, the deadlines have passed.

Jason Goldberg, chief commerce strategy officer at Publicis Communications, part of Publicis Groupe SA, estimates that a majority of retailers have pushed up deadlines by at least a day or two, and about a quarter by at least a week. Meanwhile, behemoths like Walmart, Target and Best Buy haven’t had to make big changes because they’ve already transformed their stores into shipping hubs for online orders. That makes them less dependent on major carriers’ national networks.

“Everyone knows there is going to be a problem 10 days from now, but we just don’t know how big it’s going to be,” said Rob Hahn, chief operating officer at Whitebox, a fulfillment service for retailers. “So everyone is being conservative, and everyone is trying to pull forward that purchase behavior.”

The earlier deadlines could drive more last-minute shoppers into physical stores at a time when coronavirus cases are spiking. The U.S. Centers for Disease Control and Prevention says holiday shopping in crowded stores is a “higher risk” activity.

Ken Perkins of RetailMetrics, says he doesn’t expect “a massive crush,” but he believes customer traffic will be heavier than what stores have seen so far during the season. Shoppers will also turn more to curbside pickup in the days before Christmas.

The warnings on earlier deadlines are needed, said Moody’s Charlie O’Shea, because if an item arrives late, frustrated shoppers blame the retailer — not the shipping company. And retailers can ill-afford to lose business at a time when many people have already cut back on their spending.

Robin Gorman Newman, a theater producer from Great Neck, New York, ordered a few gifts online during Thanksgiving weekend, including an eyeglass case from Anthropologie. She just learned that the eyeglass case was out of stock and needed to be back-ordered.

“I had gifts earmarked for particular people,” Newman said. Now, she says, “I will be happy if everyone gets their gifts this month.” But she said she won’t be going back to stores to pick up goods as virus cases surge.

Retailers’ shipping networks were already strained when shoppers dramatically shifted their spending online during the early part of the pandemic — a savior for many who were afraid of going out.

But now, with the pandemic getting worse and everyone shopping for the holidays at the same time, those networks are strained even further. Online volume is expected to triple compared to last year’s holiday season. Satish Jindel, president of ShipMatrix, which analyzes shipping package data, predicts 7 million packages a day could face delays from Thanksgiving to Christmas.

Goldberg says the shipping problem is so acute that even Amazon, which has its own shipping network, could run out of capacity, sending shoppers to places like eBay. Amazon hasn’t released a holiday shipping deadline yet, but said in a statement that it will be delivering packages up until Christmas Eve.

Jindel says that the three major carriers — FedEx, UPS and the U.S. Postal Service — have been holding up fairly well given the huge spike in volume, although on-time delivery declined the final week of November. Collectively, the on-time delivery was 94.2% during the Nov. 22 to Nov. 28 period, Jindel says.

However, the U.S. Postal Service has been taking packages that UPS and FedEx won’t take and has seen a decrease in on-time delivery, says Convey Inc., which specializes in delivery tracking.

Carriers have been slapping surcharges and putting limits on how many packages retailers can ship each day. According to a report in the Wall Street Journal last week, UPS notified drivers across the U.S. to stop picking up packages at six retailers, including L.L. Bean, Hot Topic, Newegg and Macy’s last week.

“UPS continues to work closely with our largest customers to steer volume to capacity and ensure the UPS network is reliable for all customers,” UPS said in a statement to The Associated Press late last week. “This collaboration includes specific capacity allocations last weekend and throughout the holiday season.”

The holiday shipping crunch has been particularly hard on small retailers that badly need the last two weeks before Christmas to make up for a loss of sales when they were forced to close at the beginning of the pandemic. But online-only small businesses are also feeling the strain.

Lisa Pawlic is CEO and co-founder of a recently launched Austin, Texas-based startup VoChill, which makes personal wine glass chillers. She says her distributor, inundated with a backlog of orders, told her to set the ordering deadline for Dec. 11. She plans to do her own packing and shipping of the items with her family’s help.

“We are a new brand, and I am not going to give up my customers’ experience,” Pawlic said.

Sara Skirboll, a shopping expert at deals site RetailMeNot, said some of the delays are happening at warehouses, where it’s taking longer to get orders out the door to be shipped. Shoppers should read the fine print, she said, because even if a store is promising two-day shipping, it could take days before it leaves the warehouse.

Compounding the problem is the fact that there is less space available on tractor trailers that move goods from warehouses to distribution centers.

Isaac Larian, CEO of MGA Entertainment, the maker of the popular LOL dolls, says he had 200 containers, or at least $15 million worth of merchandise, stuck at the Los Angeles port for three weeks.

The toys have since been cleared, but he says, “it’s too late for Christmas.”

NEW YORK (AP) — By ANNE D’INNOCENZIO and JOSEPH PISANI AP Retail Writers

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Airline CEOs, Biden officials consider green-fuel breaks

Associated Press

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Airline CEOs, Biden officials consider green-fuel breaks

Chief executives of the nation’s largest passenger and cargo airlines met with key Biden administration officials Friday to talk about reducing emissions from airplanes and push incentives for lower-carbon aviation fuels.

The White House said the meeting with climate adviser Gina McCarthy and Transportation Secretary Pete Buttigieg also touched on economic policy and curbing the spread of COVID-19 — travel has been a vector for the virus. But industry officials said emissions dominated the discussion.

United Airlines said CEO Scott Kirby asked administration officials to support incentives for sustainable aviation fuel and technology to remove carbon from the atmosphere. In December, United said it invested an undisclosed amount in a carbon-capture company partly owned by Occidental Petroleum.

A United Nations aviation group has concluded that biofuels will remain a tiny source of aviation fuel for several years. Some environmentalists would prefer the Biden administration to impose tougher emissions standards on aircraft rather than create breaks for biofuels.

“Biofuels are false solutions that don’t decarbonize air travel,” said Clare Lakewood, a climate-law official with the Center for Biological Diversity. “Real action on aircraft emissions requires phasing out dirty, aging aircraft, maximizing operational efficiencies and funding the rapid development of electrification.”

Airplanes account for a small portion of emissions that cause climate change — about 2% to 3% — but their share has been growing rapidly and is expected to roughly triple by mid-century with the global growth in travel.

The airline trade group says U.S. carriers have more than doubled the fuel efficiency of their fleets since 1978 and plan further reductions in carbon emissions. But the independent International Council on Clean Transportation says passenger traffic is growing nearly four times faster than fuel efficiency, leading to a 33% increase in emissions between 2013 and 2019.

The U.S. accounts for about 23% of aircraft carbon-dioxide emissions, followed by Europe at 19% and China at 13%, the transportation group’s researchers estimated.

The White House said McCarthy, Buttigieg and economic adviser Brian Deese were “grateful and optimistic” to hear the airline CEOs talk about current and future efforts to combat climate change.

Nicholas Calio, president of the trade group Airlines for America, said the exchange was positive.

“Airlines are ready, willing and able partners, and we want to be part of the solution” to climate change, Calio said in a statement. “We stand ready to work in partnership with the Biden administration.”

By DAVID KOENIG.

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Internet disruption reported in southeast Iran amid unrest

Associated Press

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Iran Telecom

Iran’s impoverished southeast has been experiencing wide disruptions of internet services, experts said, as unrest gripped the remote province after fatal border shootings.

Several rights groups reported in a joint statement that authorities shut down the mobile data network in the restive province of Sistan and Baluchestan, calling the disruptions an apparent “tool to conceal” the government’s harsh crackdown on protests convulsing the area.

The reports of internet interference come as Iranian authorities and semiofficial news agencies increasingly acknowledge the turmoil challenging local authorities in the southeast — a highly sensitive matter in a country that seeks to repress all hints of political dissent.

Starting Wednesday, the government shut down the mobile data network across Sistan and Baluchestan, where 96% of the population accesses the internet only through their phones, rights groups said, crippling the key communication tool.

After four days of unverified “localized regional network disruptions” amid the protests, NetBlocks, which monitors worldwide internet access, confirmed a new disruption to internet connectivity in the province beginning late Saturday.

“This is Iran’s traditional response to any kind of protest,” Amir Rashidi from Miaan Group, a human rights organization that focuses on digital security in the Middle East, told The Associated Press on Saturday. “Shutting down the internet to block news and pictures getting out makes (authorities) feel more comfortable opening fire.”

The week saw a series of escalating confrontations between police and protesters. Crowds with light arms and grenade launchers descended on Kurin checkpoint near Iran’s border with Pakistan on Thursday, Abouzar Mehdi Nakhaie, the governor of Zahedan, the provincial capital, said in comments carried by Iran’s semiofficial ISNA news agency. The violence killed one policeman, he added.

Earlier this week, protesters attacked the district governor’s office and stormed two police stations in the city of Saravan, outraged over the shootings of fuel smugglers trying to cross back into Iran from Pakistan on Monday. The border shootings and ensuing clashes killed at least two people, the government said. Many rights activists in the area reported higher death tolls without offering evidence.

Iran’s Foreign Ministry spokesman, Saeed Khatibzadeh, vowed Friday to investigate the deaths. Officials insisted that calm had returned to the streets.

The Iranian government previously has cut off internet access and cellphone service in tense times. In the fall of 2019, for instance, Iran imposed a near nationwide internet blackout as anti-government protests sparked by an increase in fuel prices roiled the capital of Tehran and other cities. Hundreds were reportedly killed in the crackdown nationwide.

Given that authorities targeted the mobile network and not the landline in Sistan and Baluchestan, the disruption likely wouldn’t appear on regular network data, said Mahsa Alimardani, researcher at Article 19, an international organization that fights censorship. The area already suffered from unreliable internet connections.

“This targeted shutdown was very intentional because they knew the realities of this province,” where people are poor and use cheap phones as opposed to computers, Alimardani said.

Sistan and Baluchestan is one of most unstable and least developed parts of Iran. The relationship between its predominantly Sunni residents and Iran’s Shiite theocracy long has been fraught. A low-level violent insurgency in Sistan and Baluchestan involves several militant groups, including those demanding more autonomy for the region.

The area also lies on a major trafficking route for drugs and petrol, which is highly subsidized in Iran and a key source of income for smugglers.

DUBAI, United Arab Emirates (AP) — By ISABEL DEBRE

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Nevada governor proposes giving tech firms power to govern

Associated Press

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Nevada governor proposes giving tech firms power to govern

Nevada’s governor on Friday unveiled a proposal that would allow technology companies to establish jurisdictions with powers similar to those of county governments, arguing the state needed to be bold to diversify its economy and pushing back against those who have likened the idea to company towns.

“This proposal is an exciting, unprecedented concept that has a potential to position Nevada as a global center of advanced technology and innovation, while helping to create immediate positive economic impact and shape the economy of the future,” Gov. Steve Sisolak said of his Innovation Zones idea. “As we’ve learned in the past, an emergency requires us to throw out the tried-and-true, discard the ‘How We’ve Always Done It’ manual and move on.”

Under the proposal, companies developing cutting-edge technologies that have at least 50,000 acres (200 sq. kilometers) of land and promise to invest $1.25 billion could establish “Innovation Zones.” The zones would be governed by a board responsible for overseeing zoning, taxation, law enforcement and other government functions on their land. It would override local county regulations.

The governor’s office of economic development would initially appoint three members to govern the zone, including two required to be from the company.

While the legislation does not specifically mention the company, the proposal is geared toward Blockchains LLC, a cryptocurrency company that owns 67,000 acres of land (270 sq. kilometers) in rural Storey County. Blockchains LLC hopes to build a smart city 12 miles (19 kilometers) east of Reno that would include underground data storage bunkers, 15,000 homes and a research and development park where entrepreneurs could invent applications of blockchain technology.

Blockchain is a digital ledger known mostly for recording cryptocurrency transactions. Local governments have also taken advantage of its secure record-keeping capabilities to document marriage licenses and facilitate overseas voting.

The Innovation Zone proposal has sparked concerns about ceding excessive amounts of power to technology companies. But Blockchains CEO Jeffrey Berns insists that the company’s technology has the potential to empower people to control their digital footprint.

“What we’re trying to build is a place where you have power instead of companies,” he told The Associated Press earlier in February.

An economic impact study commissioned by Blockchains projects the company’s Innovation Zone will create jobs, economic activity and revenue from a tax imposed on transactions made on the blockchain. The study projects Blockchains’ proposal will eventually generate $2.2 billion in direct output annually, about 1.3% of Nevada’s overall economic activity.

But forecasting the economic impact of unproven technology is difficult, particularly because many of the potential applications of the company’s ledger technology have yet to be invented.

Applied Analysis’ Jeremy Aguero, who authored the study, said the projections were based on more than cryptocurrency transactions and encompassed any action on Blockchains’ database made in Nevada or elsewhere. Blockchains, he said, planned to pilot its cryptocurrency in Nevada on industries like cannabis sales or in the gig economy and then expand its applications to other sectors and locations. All of the transaction taxes would be collected by Nevada.

“When we think about it in terms of the revenue estimates that are being yielded, it’s not just related to cryptocurrency. It’s related to any of the transactions that will add a block to the chain,” Aguero said.

Blockchain technology is already used to record financial transactions, store medical records and coordinate supply chain logistics. Sisolak said the purpose of innovation zones is to attract developers to Nevada as they devise new ways to use the technology.

“The applications of the technology are limitless. We cannot even imagine what their technology could be,” he said.

The yet-to-be invented applications are a key reason that Blockchains wants to establish an Innovation Zone. The company and the proposal’s proponents say small jurisdictions are not the ideal governmental bodies to make decisions about new technologies and a massive development that, in Storey County’s case, could increase the population tenfold.

“The traditional forms and functions of local government … are inadequate alone to provide the flexibility and resources conducive to making the State a leader in attracting and retaining new forms and types of businesses,” according to draft legislation.

Some locals disagree. Storey County resident Eileen Gay said that the mechanisms in place for development and project approval protect local interests and the environment.

“Oversight is what makes for safe, well-considered, well-balanced development,” she told county commissioners at a Feb. 16 meeting. “What is to prevent this 800-pound gorilla of a neighbor from swallowing our small neighborhood up?”

Developers may indeed invent new ways to use the digital ledger, but at an August 2020 Storey County Commission meeting, Blockchains lobbyist Matthew Digesti described the company’s proposal as something local governments routinely encounter: a “high-tech business park integrated with a master planned residential community.”

Sisolak said he understood that the Innovation Zones was unconventional, but he said the pandemic had proven that Nevada needs to be bold to diversify its tourism-driven economy. He said government and the private sector needed to work together to induce economy recovery.

“What we’ve been doing has not worked,” he said. “We cannot wait for economic recovery to come to us. We must accelerate and pursue innovative ways to inject Nevada with new and organic economic growth, and more jobs.”

CARSON CITY, Nev. (AP)

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