Afternoon Coffee: USPS’ struggles will affect supply chain; Unemployment claims rise again; Alibaba’s huge earnings

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The disruption on USPS demand from the COVID-19 pandemic could cause a lot of problems for supply chains, according to Supply Chain Dive.

USPS' on-time performance dropped to 91.5% in July.

Shippers and consumers noticed a slowdown in service during the coronavirus disruption, leading to consternation across the board. Financial woes have also caused headaches for the industry. Postmaster General Louis DeJoy has vowed to put the USPS on better financial footing, according to the article.

If the USPS cannot keep up with the demand, it can affect the supply chain greatly. The USPS is a major last-mile subcontractor for most other major carriers, like FedEx or UPS, the article reported.

"Those are almost two different concerns ... what is the impact of the slower postal service? And then what is the impact of unpredictability in your supply chain?" Matthew Hertz, a business owner, told Supply Chain Dive.

Rise in unemployment claims reflects slow economic recovery

The U.S. Labor Department reported Thursday that the number of workers seeking unemployment benefits rose back above 1 million after two weeks of decline, according to the Associated Press. Many experts agree that recovery will remain weak until the COVID-19 pandemic is officially defeated.

After the COVID-19 disruption, employers have advertised fewer job openings with unemployment remaining in the double digits. Consumers and businesses are still wary of uncertainty and restricted by lockdowns, according to the article.

The figures indicate employers are still cutting jobs despite some recent economic gains from reopening and industries like manufacturing have rebounded.

“Getting the virus in check dictates when there’ll be relief from this economic nightmare, and it doesn’t look like it will be soon,” AnnElizabeth Konkel, an economist, told the Associated Press.

Alibaba’s earnings show consumers’ shift to online buying

Alibaba, a technology giant based in China, said first-quarter fiscal profit more than doubled from last year’s numbers, indicating the COVID-19 pandemic has shifted how consumers buy daily necessities, according to the Wall Street Journal.

Alibaba reported a net income of $6.7 billion for the quarter ending in June. Its revenue rose 34%, showing that the e-commerce business fully recovered to pre-coronavirus levels, according to the article.

The earnings indicated that the outbreak accelerated a shift for older consumers and consumers living in smaller cities to buy online rather than in physical stores.

“The coronavirus has been good for Chinese e-commerce players,” Steven Zhu, an analyst, told the Wall Street Journal. “Once you switch, you don’t switch back.”

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