Blog / Covid’s Impact on Residential Permanent?
2 minutes read

Are Covid-19's Impact on Residential Vs. Commercial Going to be Permanent?

In 2020, many Americans traded malls, grocery stores, and restaurants for online shopping, weekly meal prep boxes, and food delivery services. COVID-19 has changed the way we shop and interact, effectively changing the landscape of the parcel shipping industry.

Today, we’re digging into the pandemic’s impact on residential and commercial parcel shipping and making predictions about whether those changes are here to stay.

Residential Goes Up

Before the pandemic, eCommerce and online shopping were on the rise. In the second quarter of 2020, department store sales dropped by 75%, and by the end of the year, eCommerce saw a 44% increase over 2019’s numbers.

It comes as no surprise that residential parcel shipments have increased since the beginning of the pandemic. As Americans shift behaviors to stop the spread, couriers have seen an increase in residential deliveries according to a new report by ResearchandMarkets.com. However, despite the increase in demand, profits are affected by the small parcel size, increased sanitization efforts, and longer distances between customers.

As an alternative, many couriers set up delivery hubs and 24/7 self-service lockers to minimize contact and reduce pressure on courier firms.

Commercial Going the Other Direction

As residential shipments increased, commercial shipments decreased when the pandemic hit. According to a recent report, one company saw a shift from 60% commercial ground deliveries and 22% residential deliveries to 40% commercial ground and 46% residential deliveries.

In addition to a drop in volume, many companies are opting for money-saving options over premium services.

New Normal?

Speaking with Clickz, Scott Kelliher, Head of Brand Ads & Partnerships at eBay, shared that, with regards to customers’ residential eCommerce habits, “Almost 85% of them plan to keep this new higher level of eCommerce spend for the foreseeable future.”

This is a trend that has been in motion for the better part of two decades, but was accelerated because of pandemic lockdowns. We expect this tilt in B2C to continue in this manner well into the future as consumers  have become more comfortable buying commodities online that they previously preferred to do in-person. Still, as the public once again becomes comfortable engaging in traditional forms of entertainment and shopping, we’ll likely see the ratio of commercial deliveries increase as retailers once again stock up their shelves rather than shipping direct-to-consumer. The pendulum will swing the other direction, it just won’t swing all the way back.

Looking for ways to reduce shipping costs no matter if it’s residential or commercial? Get in touch with us today for a parcel audit or rate negotiation.
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