By Mary Schlangenstein / www.bloomberg.com / November 23rd, 2016
FedEx Corp. and United Parcel Service Inc. expect to set another record for packages handled this holiday season, fueled by an estimated 17 percent jump in online spending. Mondays will bear more of the crunch than ever before.
The start of online holiday shopping will trigger a surge making each Monday from Nov. 28 through Dec. 19 among the busiest days in FedEx’s history, said Patrick Fitzgerald, the company’s senior vice president of integrated marketing and communications. The deluge is strengthened as more retailers use store inventory to fulfill online weekend orders -- and need to replenish their merchandise Monday while also shipping out parcels to customers.
FedEx and UPS plan year-round for the so-called peak season before Christmas, when smooth operations are critical for consumers and investors. Online sales are likely to climb to $94.7 billion, representing almost 11 percent of total sales in November and December, an all-time high, according to researcher eMarketer. Total retail sales will rise 3.3 percent to $884.50 billion, eMarketer estimated.
“We won’t have a busiest day this year, because we will have busiest days,” Fitzgerald said in an interview. “That could be anywhere from the Monday before Christmas to Cyber Monday following Thanksgiving.”
The Monday rush is prompting UPS to get a jump on moving packages into its ground network during “cyber weekend,” the online shopping spree that follows Black Friday retail sales the day after Thanksgiving. The courier will pick up packages on Friday, Saturday and in some cases Sunday, said Susan Rosenberg, a UPS spokeswoman. It’s also banking on technology it developed after a delay-plagued 2013 season, enabling speedy adaptations to unexpected changes in volume.
“I like to call it choreography,” Rosenberg said. “It’s a different dance every year.”
UPS expects to handle 700 million peak parcels this year, a jump of 17 percent from 2015. With a larger domestic ground-delivery network, it’s adding 95,000 temporary workers for the holidays. FedEx sees a 10 increase in packages from 2015’s record of 325 million, Fitzgerald said. It’s hiring more than 50,000 for temporary positions.
UPS and FedEx work closely for months with a few dozen of the largest shippers to get accurate forecasts on expected peak volume. The companies want to avoid surprises -- a new product, an expansion of free shipping -- that might generate large numbers of shipments late in the holidays.
In 2013, a late unforeseen e-commerce surge and bad weather kept UPS from delivering its packages on time. The Atlanta-based company overcompensated in 2014 and found itself with idle workers and equipment. Severe weather and late online sales delayed some FedEx shipments in 2015.
Changes this year at Memphis, Tennessee-based FedEx include six facilities dedicated to processing exercise equipment, trampolines and other large items purchased online that can’t fit through normal scanners. It also has extra stations that automatically sort more conventional parcels.
The air operations of both shipping giants will deliver packages on Christmas Eve, a Saturday, while their ground units won’t. FedEx will suspend its money-back delivery guarantee for FedEx Ground Nov. 28 through Dec. 24, and at FedEx Express on Nov. 23 and Dec. 19 through Dec. 24. UPS is suspending ground delivery guarantees Nov. 27 through Dec. 3 and Dec. 18 through Dec. 24.
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