Shipping giants UPS and FedEx are struggling to round up the vans they need to deliver packages amid a coronavirus-fueled surge in demand for their services, a new report says.
The pandemic sparked shutdowns at vehicle factories that have led to a shortage of delivery vans at a time when more people are buying things online and having them shipped to their homes, according to Bloomberg News.
That’s driving up costs for FedEx and UPS, which have been urging companies from whom they lease vehicles to buy as many vans as they can find, the news service reported Wednesday.
“If there’s a cargo van out there, we’re trying to buy it,” Brendan Keegan, CEO of vehicle provider Merchants Fleet, told Bloomberg. His company reportedly expects to have 15,000 vans out for lease at the end of the year, more than double the 6,000 it had last year.
While UPS and FedEx say the shortage won’t crimp their capacity to deliver packages, it is eating into their profit margins, Bloomberg reports. FedEx, for instance, is offering to help its delivery contractors cover the costs of renting more vehicles than they usually do during the holidays, company executive Steve Myers told Bloomberg.
The reported shortage comes ahead of a holiday shopping season that’s already threatening to strain big shippers. Some 86 million packages are expected to be shipped between Thanksgiving and Christmas, but carriers will only have the capacity to deliver about 79 million, The Wall Street Journal reported last month, citing estimates from shipping data firm ShipMatrix.