Anthrax Fears Plague Online Merchants
The widening anthrax scare has thrown another major wrench into the gears of e-commerce, potentially slowing package delivery, undermining confidence in the mail and raising shipping costs at a time when e-tailers can least afford it.
Sharp reductions in air cargo capacity, combined with already rising prices, could also add delays and expenses for shippers, catalog retailers and companies involved in direct marketing.
"Without a doubt, the Postal Service is going to be looking at a dramatic increase in security," said Neal Denton, executive director of the Alliance of Nonprofit Mailers. "Were all going to experience delays. Were in uncharted waters."
Speaking at the National Postal Forum in Denver last week, Postmaster General John E. Potter announced a task force to oversee security measures in a system that delivers more than 200 billion pieces of mail annually.
"None of us could have anticipated the events of the last week, and how someone or some group would target the mail for such evil purposes," Potter said. "Make no mistake - we cannot sit back and allow our nations confidence in the mail to erode."
In the first two weeks of October, the FBI checked out more than 2,300 reports of suspected anthrax, most of them involving mail.
But experts in the shipping industry said policing the packages could prove a daunting task; talcum powder, for example, already is commonly used to keep mail such as catalogs from sticking together.
While the U.S. Postal Service is under the most direct scrutiny, shippers such as FedEx, United Parcel Service and others will also face new regulations.
In addition, the sharp reduction in the number of airline flights after the Sept. 11 attacks translates to diminished cargo capacity, since most air freight travels in the bellies of passenger planes.
Internet merchants are equally worried about increased costs.
With rate increases totaling $3 billion since Jan. 1, the USPS board of governors filed a request for a $6.1 billion hike in postage rates last month. That brought strong protests from organizations involved in the $525 billion direct mail industry, including Internet merchants.
"In an economy that has been struggling all year and is now under additional pressure from the Sept. 11 tragedy, it is unfathomable that the Postal Service would ask consumers and businesses to sustain yet another postage increase," said H. Robert Wientzen, CEO of the Direct Marketing Association.
While the efficiency and cost of the delivery system is of immediate concern, issues such as potential liability for tainted mail could arise. Anthrax was found in the Boca Raton, Fla., post office, apparently from a piece of mail that passed through the system. The insidious nature of anthrax is that in its spore form, it remains virtually indestructible and often undetectable.
Security scares may also slow mail delivery.
At Microsofts licensing office in Reno, Nev., a suspicious letter from Malaysia containing pornographic magazine clippings, apparently once soaked in a liquid, initially tested positive for anthrax, but final tests last week came back negative.
"Obviously, like all companies, we are beefing up the various things we do to try and keep our employees as safe as possible," Microsoft Chairman Bill Gates said.
Few Internet merchants so far have taken extra steps. EBay, for example, suggests that people who order online let family members know that an oddly wrapped package could arrive in the mail. A reluctance to use the mail could mean less business for the auction site, said Kevin Purseglove, an eBay representative.
At Kmarts BlueLight.com, on the other hand, representatives said the ability to deliver gift-wrapped packages for the holiday season could help its business. People who dont want to fly, and thus dont travel, may decide to ship instead.