UPS, FedEx Got Back On Time This Holiday
Companies Avoid Shipping Problems of 2013
FedEx employees pull boxes from a conveyor belt and fill trucks for deliveries at a sorting facility in the Bronx, N.Y. MARK LENNIHAN/ASSOCIATED PRESS
Most presents made it under the Christmas tree on time.
After winter storms and a surge of last-minute packages snarled shipping last year,United Parcel Service Inc. and FedEx Corp. turned things around and delivered an estimated 98% of express packages on time on Dec. 24, according to data from tracking-software developer Shipmatrix Inc. That compares to a year ago, when FedEx’s on-time rate was closer to 90% and UPS’s was just 83%.
This holiday season was a big test for the delivery giants’ vaunted logistical networks. The companies spent millions of dollars preparing, including hiring tens of thousands of seasonal workers, and put tighter caps on retailers who exceeded their contracted volumes. They also were helped by smoother package volume levels as retailers started sales earlier and spread them out, and by relatively good weather.
“For the most part, you’re seeing things are running a lot smoother this year,” said John Haber, chief executive of supply-chain consultant Spend Management Experts.
Still, the volumes forced FedEx again to be out delivering on Dec. 25—not a standard delivery day—to make sure all its packages arrived. The company did the same last year.
UPS didn’t deliver on Christmas day. Both companies said they were pleased with their performance.
UPS had said it expected to ship an estimated 585 million packages in December, an 11% increase over the same month last year, while FedEx expected a 9% increase to 290 million packages from Thanksgiving through Christmas.
“My gut instinct is, that with the resources they’ve added, they will find that they were prepared to handle a larger volume than what they’ve got, because we don’t have the weather problem we had last year,” Shipmatrix President Satish Jindel said.
Shipmatrix calculated this year’s results from millions of packages it tracks for retailers and others that use it to monitor the performance of their shipments.
Delivery companies were overwhelmed by a last-minute surge in online shopping last year, as more than 70 retailers promoted next-day delivery on purchases made as late as 11 p.m. on Dec. 23. The companies also dealt with unusually severe winter storms throughout the month of December.
This year, fewer retailers took the risk of offering guaranteed last-minute shipping. Those that did faced caps by both FedEx and UPS, both of which limited the shipments of some packages in the days leading up to Dec. 24 to ensure their networks operated smoothly.
Alan Gershenhorn, UPS’s chief commercial officer, said the company worked more closely with customers to forecast volumes, something FedEx did as well. UPS also advised retailers against last-minute sales.
During a conference call with analysts in December, FedEx executives said that retailers shipped fewer packages than expected in November, in part thanks to port congestion on the West Coast.
