Carriers like FedEx and UPS plan all year for the holiday season, when their daily shipment volumes can often double. However, despite the best-laid plans, these big names are struggling to keep up with shipping volumes this year.
Demand this year has reached record levels, and carriers have had to make some adjustments to try to keep things from spiraling out of control. UPS has already relocated hundreds of workers from its corporate offices to struggling shipping hubs, while both FedEx and UPS have extended certain delivery routes and stopped offering delivery guarantees for certain weeks. FedEx has announced that some workers have had their hours increased to help stay on top of demand.
On-time delivery rates have dropped slightly for these carriers post-Thanksgiving, with ShipMatrix Inc. finding that UPS ground on-time delivery rates dropped to 96.3 percent after adjusting for weather and delays that could not be avoided, while the rate for FedEx ground was 96.9 percent. While this is better than the 95 percent rate recorded by both carriers during the same week last year, it falls short of their average on-time delivery rates of 98 to 99 percent during the rest of the year.
Black Friday E-commerce Surge
E-commerce noted a surge this year over the days surrounding Black Friday, jumping from 18 percent last year to 25 percent this year. UPS expects to handle more than 700 million packages in the period from Thanksgiving to the end of December, which is 14 percent higher than the record they set last year. Meanwhile, FedEx is expecting a rise of 10 percent.
FedEx and UPS have added new satellite sorting facilities and instituted automation for faster package processing in an effort to prevent the widespread problems they dealt with in 2013 because of winter storms and an influx of last-minute orders. While this year’s issues have not yet reached that level, the delays are leaving customers frustrated.
The problems could get even worse as Christmas gets closer, leaving carriers facing a tough balancing act to meet delivery deadlines.
This blog post was based off of an article from The Wall Street Journal. View the original here.