Are shipping companies ready for Christmas?
We still haven’t quite reached Halloween, but with Black Friday and Christmas on the horizon, the major U.S. shipping companies are taking steps to keep up with the anticipated seasonal workload.
CNN Money reports that UPS is expecting a 10 percent increase in shipment volume between Black Friday and New Year’s, with a projected package count of over 630 million — an all-time high for the shipping company. UPS anticipates that its heaviest package volume day, December 22, will see 63 million packages delivered, twice the normal daily rate.
In order to account for the record volume and still keep customers satisfied, UPS has been implementing both internal and customer-facing solutions. On the backend, the company says it has increased capacity through new routing technology and more processing facilities. In terms of changes the customer sees, UPS is expanding its UPS My Choice and UPS Access Point offerings.
UPS My Choice allows customers to receive text messages and email alerts about their packages and redirect deliveries to prevent failed delivery attempts. UPS Access Point allows customers to choose a nearby pick-up point — either a UPS Store or another local business. According to CNN Money, UPS hopes to have 8,000 locations set up as Access Points by December.
Image: UPS video
FedEx is likewise expecting to move a record number of packages this holiday season. USA Today reports that FedEx expects a 12.4 percent increase in volume between Black Friday and Christmas Eve from last year’s numbers. The shipper is hiring 55,000 seasonal employees this year and has been putting billions of dollars into expanding its online fulfillment infrastructure, according to the article.
Shipping companies and retailers alike are no doubt hoping for a repeat of 2014’s smooth holiday season, and not the holiday delivery catastrophe of 2013.
The notoriously bad weather of 2013’s holiday season led to a large volume of packages not arriving in time for Christmas Eve, creating widespread customer dissatisfaction and leading people to wonder if 2014 would cause similar frustrations.
However, retailers and shipping companies were markedly more successful at handling 2014’s holiday deliveries, as reported by RetailWire following that season. The studies cited in the article attributed the increased level of success to improved logistics infrastructure, more fulfillment facilities and better communication between shipping companies and retailers, alongside fewer last-minute orders and the obvious factor of less extreme weather.
The massive increase in online shopping in recent years, especially during the holidays, has led to the yearly upticks in the number of packages shipping companies must deliver. While major shippers and retailers seem to be successfully anticipating and managing the increased package volume, it may take another brutal winter to truly put the logistics to the test.
Discussion Questions
With added fulfillment centers, new strategies and public-facing tools, can shipping companies effectively handle holiday package delivery if we get another 2013-style winter? How much of last year’s delivery success owed to increased logistics capabilities and how much was because of the better weather?
Poll
BrainTrust
I am beginning to see a problem with all these trucks on the road delivering goods to homes and small businesses. As e-commerce grows, our roads become more hazardous than ever before, as UPS and FedEx trucks are clogging many roads by parking on the street, which makes for dangerous situations for drivers. Just yesterday a UPS truck stopped on the side of the road right in front of me, still taking up half the roadway to deliver a package, as many roads in our country do not have wide shoulders to park, especially in rural areas. I had to stop and wait for clearance on the oncoming traffic as it was difficult to see around the truck.
Start adding this to the holiday scene and throw in snowy conditions, and you can understand the frustration of many drivers becoming more wary of the hazards of these vehicles. As of now there is no rule for how these trucks deliver, or so it seems, and I understand mail trucks and school bus stops, but the influx of all these delivery vehicles who believe they own the road is getting to be a problem. I hope they think twice this holiday how they deliver packages smarter than they are now, before something happens. Road rage could become an issue.
E-commerce is going to keep growing, and all of us want our goods delivered in a safe manner, so to UPS and the others … Please re-think how you run your businesses, as the public safety on our roads matters, and with the idiots out there texting and driving this will not end well. Pull down a side street and make multiple deliveries instead of parking on the major roads. Just a suggestion, but something needs to be done.
Will the shipping companies handle it better than they did in 2013? The answer is yes. The bigger question if that should occur is, will they be able to handle it to the satisfaction of their customer and the people receiving the items?
If enough packages don’t arrive in time the press will replay all the news from 2013, etc., because kids not getting their presents on time makes great news. What doesn’t is that the buyers of those presents didn’t get around to ordering sufficiently far enough ahead to ensure their timely delivery.
As more and more products are sold online and then shipped using fast freight carriers, companies like UPS have growing issues with customer service. So the increased load will likely translate into more problems this holiday season.
I saw that UPS will place a huge penalty for oversized packages starting November 1st, in all likelihood to reduce big deliveries, adding more room for smaller packages. Maybe these moves will help — time will tell.
Yes, I think the shipping companies are learning fast with companies like Uber on their heels. This season may be the key to the future. The redirect tool alone is a phenomenal improvement in customer experience. Nothing like not getting a gift when you expect it.
Shippers have learned from previous weather snafus. But are they ready for demand increases? UPS predicts a 10% increase in volume. FedEx predicts 12%.
If retailers offer more free shipping deals, especially on last minute orders, it will be promotions rather than snow that clog logistics. Add increasing use of mobile and we may see more last minute activity.
Then again, surprise weather AND promotions would be the perfect storm.