FedEx and UPS sharply improved their rates of on-time delivery during the last-minute Christmas shopping crush, avoiding 2013’s shipping snafus with better planning and a little help from Mother Nature.
ShipMatrix, a logistics software firm, analyzed FedEx and UPS’ on-time performance rates for packages that had been promised for delivery by December 24. This year, FedEx and UPS each delivered 98 percent of express packages on time by Christmas Eve. For both companies, that is a significantly better performance than in 2013, when FedEx’ on-time performance was 90 percent and UPS’ was 83 percent.
In 2013, the shipping giants were caught flat-footed when their pipelines were inundated with more packages than expected in the days just before Christmas. The deluge, coupled with some disruptions created by eleventh-hour snowstorms, resulted in an estimated 2 million deliveries failing to make it in time for Christmas.
FedEx and UPS were determined not to repeat last year’s mistakes. Each shipper hired about 10,000 more seasonal workers this year and pushed retailers to give them more accurate forecasts for how many packages they’d be shipping. Major retailers have said they worked hard to offer better estimates of their package volumes.
While the carriers took much of the heat for late deliveries last year, logistics experts say that the retailers were largely to blame for the problems. Satish Jindel, president of ShipMatrix, said that in 2013, many retailers would ship a package via a carrier’s ground delivery service instead of using the pricier, guaranteed express service — but then still promise their customers that the order would arrive by Christmas.
“If you ask (the shipper) for a lower quality of service, but you promise a higher quality of service to the customer, it’s a problem,” Jindel said.
Retail consultancy Kurt Salmon’s study of 2014’s last-minute Christmas deliveries found that retailers continued the practice. Of packages that failed to make it in time for Christmas, analysts found that one-third of them were sent by a non-guaranteed or incorrect shipping method.
FedEx and UPS said earlier this year that they expected to handle a record volume of packages this holiday season. FedEx forecasted that it would move more than 290 million packages, nearly a 9 percent increase over 2013; UPS predicted it would handle 585 million, an 11 percent uptick. UPS also said in October that it expected to pass last year’s single-day delivery record of 31 million packages on six different days this holiday season.
Neither firm has announced whether they did indeed break those shipping records, but retailers widely reported robust online shopping during the holiday shopping season.
