Under Pressure from Strong Last-Minute Sales, UPS Fared Better than FedEx



'UPS truck'

An unexpected surge in on-line sales put an additional strain on both UPS and FedEx this holiday season.

After two straight years of delays in delivering Christmas packages, and despite being under pressure from strong last-minute sales, UPS fared better than FedEx this season.

According to a report released by ShipMatrix Dec. 29, FedEx struggled to deliver Christmas gifts in time, but its Dec. 23 on-time performance mysteriously slipped to 77 percent from 95.2 percent two days prior. UPS followed a similar trend: performance sank to 79.5 percent on Dec. 23 from 94 percent two days earlier.

Nevertheless, both companies tried to catch up on Dec. 24, when FedEx’s performance rebounded to 96.2 percent, while UPS hit 97.7 percent. According to the report, both carriers kept delivering packages on Christmas Day because of the surge in last-minute shipments. FedEx employees had to work Dec 26 as well to deliver the rest of packages that hadn’t reached their recipients on time.

FedEX explained that the delayed shipments were caused by an unprecedented surge in last-minute on-line shopping.

The recent report reveals the additional strain on both retailers and shipping giants to keep up the good work when a huge portion of shopping moves on-line during holiday peak. On-line shopping is both fast-paced and highly unpredictable, so carriers often fail to estimate by how much orders would surge during a particular year.

UPS’s CEO David Abney also said that the recent stumbles were caused by a large gap between what the company had expected for this holiday season and what it really happened.

Abney noted that Cyber Week also had a large package volume, but the company was not caught by surprise. Only two to three locations saw an unexpected increase in volume over that week.

But lesson was learned and UPS made some minor tweaks that helped it handle the pressure last week. It said it has shifted loads, made improvements to the network, and asked some of its largest clients to place orders until Dec 19 rather than Dec 21, guaranteeing that deliveries would be, thus, made on time.

Nevertheless, there were some delays, so frustrated shoppers slammed both UPS and FedEx for their snags on social media. For instance, one exasperated shopper commented on Twitter that a two day delivery morphed into one week.

But ShipMatrix researchers explained that even a flawless shipping company couldn’t handle the hoards of procrastinating customers this season. The research firm added that with a 99.9 percent on-time performance about 600,000 packages would still have been delayed. Yet despite stumbles, about 60 million packages were delivered on Dec. 24.
Image Source: Wikipedia

The post Under Pressure from Strong Last-Minute Sales, UPS Fared Better than FedEx appeared first on Wall Street OTC.


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