UWG Regional Update – May 2022

Thank you to University of West Georgia’s Richards College of Business for providing the content on UWG Regional Update. 

By Hilde Patron, Director of CBER; William J. Smith, Chair of Economics; David J. Boldt, Professor of Economics.

Volume 13, Issue 1

Spotlight on Transportation and Warehousing

The pandemic has changed not only what we buy, but also how those items make their way into our homes. Before the start of the pandemic, online shopping was already fast-growing, but the shift toward ecommerce has been significantly faster than expected. According to a recent report from DigitalCommerce360, the pandemic bumped ecommerce sales well above where they were projected prior to the pandemic, up by $102.1B for 2020 and $116.5B for 2021. This COVID bump in ecommerce has also provided an unwelcome stress-test of our transportation, warehousing, and home delivery services, and is now expected to last well beyond the end of the pandemic. Formerly niche home delivery services like Instacart, Grubhub, and others used the pandemic to refine their business models and expanded to fill a gap in the marketplace. Such was the sudden increase in demand that these companies were at times hard-pressed to keep up. Even industry-giant Amazon had to prioritize most in demand essential items in its warehouses and adjust delivery times from next-day-delivery to, in some instances, several weeks away for in-stock items. It was not unusual for customers to encounter “currently out-of-stock” labels on basic products as well. As demand for warehousing and deliveries rose, so did employment, work hours, and earnings in these sectors…