One of the indisputable winners of the pandemic has been e-commerce, as home-bound consumers order everything from nearly-spoiled cabbage to bidets off the Internet. That will have long-term implications for everything. For oil market and commercial real estate, in particular, the change brings bad news.
As for oil, it’s just a shift from one refined fuel to another in the near term, as diesel-using delivery trucks take market share from gasoline-sipping cars and minivans. But delivery companies like Amazon and UPS will pay a lot more attention to cutting fuel costs than people running errands, meaning there might be some near-term efficiency losses.
And the long-term is even bleaker, as delivery fleets can speed the transition to electric vehicles because their trucks are in constant use, so the savings from lower energy prices can more quickly offset the higher up-front purchase cost. Companies like Amazon and DHL have recently announced major electric delivery vehicle purchases.
It’s also bad news for commercial real estate owners, as it will accelerate the shift away from brick-and-mortar stores that’s been underway for years. It won’t help that there will likely be added regulation to large public gatherings for at least the next year or two until vaccines are widely available.
Many just find online ordering easier, and some exposed to it for the first time during the pandemic will stick with it for at least a portion of their purchases from now on. As an Alibaba executive recently said, “When consumers build a habit, it doesn’t easily go away.”
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