The COVID-19 pandemic has certainly exposed delivery drivers to increased risk and stress. But ultimately COVID-19 will benefit drivers by steering business in directions that could make delivery work more rewarding and manageable.
Bad News in the Beginning
Initially, many delivery drivers saw work plummet. Large swathes of commerce and society shut down. As the industry tried to figure out what adjustments to make to keep drivers safe, work routines got interrupted. Many drivers found it challenging to cope with the very real dangers and uncertainty that now went with the job.
Meanwhile, some segments of the economy began booming. First several kinds of medical deliveries took off, followed by work in the food and meal delivery sector. Increasingly, other areas of e-commerce have switched into overdrive. Now drivers struggle to keep up with delivery volume. Always the threat of contagion looms.
Better Buying Behavior
The pandemic is altering consumer habits in ways that many experts believe will survive post-COVID. Eventually, the advantages promise to overtake the disadvantages. First, many more retailers and suppliers have had to transition to support online sales. As more suppliers position themselves to operate remotely, they create demand and generate last-mile delivery opportunities. The Harvard Business Journal reported on Drizly, a liquor delivery app, which found that increasing consumer choice (giving people more products to choose from more suppliers) resulted not only in more orders but also larger orders. Apparently, when our online shopping options are more limited we are cautious in our buying. We focus on our most immediate priorities. When we feel we can access the overall marketplace, however, we plunge ahead and buy more of what we need.
This change in buying behavior spurs even more suppliers to invest in online commerce. And the cycle repeats. In addition, modernizing technology investments make for smoother order processing and fewer errors. Happy customers order more product more often and are more likely to maintain their online purchasing post-crisis.
Demand Creates Desirable Conditions
The crush of orders has forced online platforms, including even the likes of Amazon and Instacart, to delay order lead times by days and widen delivery windows. For now consumers are accepting the need for this. Safety takes priority and most are finding the new delivery timetables tolerable. This removes some of the pressure on drivers. It also creates space for the industry to invest in more efficient pick-up and sorting processes. These improvements will enable denser routes that should prove more profitable for drivers compensated by commission.
The struggle to fulfill increasing e-commerce order volume will drive another innovation that should benefit drivers. Increased order minimums now make sense where they wouldn’t have before. A store or supplier can’t justify taking an $18 order when there are many $50+ orders in the backlog. Larger orders to each location mean greater time spent delivering versus driving between stops. In other words, more income per mile for drivers. As demand for deliveries outstrips supply, sellers can charge more delivery fees and reduce delivery discounts. These measures should relieve pricing pressure on delivery companies and lead to higher driver compensation.
As happens so often in market economies the balance point between supply and demand is tipping. COVID has accelerated the cycle. Now demand for delivery is reaching levels that promise to put more power and profit into the hands of those who supply those deliveries – including the front-line delivery drivers.
Peter Schlactus, CRM, CIC, AAI
Association for Delivery Drivers www.a4dd.org