England Lockdown #2 Early signs Amazon may see capacity challenges

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Yesterday was Day #1 of a national England Lockdown #2 and already there are signs that Amazon will see capacity challenges this Winter. Doubtless they have learned lessons from the Lockdown #1 which caught them (and everyone) on the hop and we’re predicting that this time they are much better prepared and will put early steps in place to keep the business running.

Amazon have already invested millions in making their warehouses COVID-19 safe, millions more on PPE and testing, and have had to rejig their business in order to handle heavier items.

Throttling sales

Day one of England Lockdown #2 revealed two, although minor in themselves, significant signs that Amazon capacity may be reached. A few products have sales limits on and yes it is as you might expect – products like kitchen roll that consumers can’t seem to stop themselves bulk buying. Amazon are limiting some products to as few on one item per person per day in order to stop the stupid bulk buying we saw at the start of Lockdown #1. Of course, Amazon offer both small and large packs of many products so there’s nothing to stop buyers upping their purchase to a larger quantity but what they won’t do is allow you to clean them out entirely.

Throttling purchases is eminently sensible – I mean seriously who needs more than 8 kitchen rolls at a time when you can order more tomorrow with next day delivery when you’re running low?

Carrier networks

The second indicator that Amazon may see capacity challenges in Lockdown #2 is that two orders I placed are both due to be delivered by DPD today. Yesterday it was Amazon Logistics that turned up with two packages but today Amazon have handed off delivery to a courier. This in itself isn’t entirely unusual, but with one fairly bulky parcel and the other very small and light (a pad of paper that would fit in a flat mailer) it’s surprising to see Amazon paying DPD for handling the delivery.

This might of course all be coincidence, but what we do know is that carriers have been operating at maximum capacity for the past six months and they simply don’t have any room to flex and take on more parcels. Carriers will all have negotiated with major retailers and have fixed maximum volume limits in place with no room to bargain for further increases in volumes in the run up to Christmas. If Amazon are already using DPD for deliveries in early November then it’s a small indicator that Amazon Logistics are also close to capacity.

The next few months are going to be tough for all ecommerce retailer and carriers. Shop early for Christmas this year and if you are sending gifts to loved ones then get them wrapped, packed and shipped as early as possible if you want them to arrive in time for the big day.