Be careful what you wish for… Black Friday can leave you black and blue.
After a Black Friday/Cyber Monday combination that saw record sales and a surge in online ordering, package carriers are once again struggling to keep up. This week UPS confirmed that some deliveries are delayed, with Shipmatrix research estimating an 89% on-time rate for UPS Express package delivery. In contrast, Shipmatrix pegged Brown’s nemesis FedEx at 94%.
UPS is already feeling the heat from some customers, many of whom have taken to social media to air their grievances.
Here’s the problem for retailers: Consumers don’t always separate the carrier – or indeed the fulfillment provider – from the company selling them the product.
This is a major concern for any retailer that wants to see its customers come back (that would be all of them). Even early in the season, a couple of days added to an expected delivery date can spark a storm of negative coverage for the brands involved.
What accounted for UPS’ lagging delivery stats?
Both of the big carriers expected volumes to spike for the holidays, as evidenced by their adding 50,000 (FedEx) and 95,000 (UPS) seasonal workers to meet the demand. Unfortunately, UPS appears to have misjudged the shift to early shopping that consumers embraced last month. Described by a company spokesperson as a “bubble” in deliveries, UPS has been forced to reassign hundreds of office workers and rented equipment to get things back on track this week. This is not unusual – they have a strong “all hands on deck” culture around holiday peak. What’s more concerning is that this seems like a last-minute adjustment, rather than a well-planned deployment.
Thanks to the rise of e-commerce, the holiday season has emerged as a critical period for package carriers. Alongside its principal rival FedEx, UPS has seen revenues and profits soar in recent years as more and more people buy their gifts online. The growth has been consistent over the years, as have the delays, but Brown is sticking with its pre-Thanksgiving forecasts. Those numbers predict that 2017 shipments will see a 5% increase over last year, surpassing 750 million package deliveries between Thanksgiving and New Year’s Eve.
To add to its holiday woes, UPS is also hearing it from unions due to a disagreement over driver hours.
The company planned a 70-hour work week for a hectic eight-day period later in the holiday season, which has raised concerns over driver fatigue and public safety. Federal Department of Transportation regulations limit some driver categories to 60 hours across seven days, although these rules apply to tractor-trailer vehicles. While the driving dynamics are clearly different, anyone who has observed hard-working delivery drivers lugging holiday packages around the urgent and unforgiving streets of NYC would agree that there can’t be much downtime during these shifts. Teamsters president James P. Hoffa claims that UPS has failed to adequately plan for the third holiday season in a row and is now putting driver safety at risk in a bid to compensate.
Despite this unimpressive start to seasonal deliveries, UPS is playing down the delays as a blip that will smooth out as the holiday shopping period continues.
Consistent order volumes spread throughout December would be ideal, but that’s a luxury that rarely appears for those of us in the business of shipping and fulfillment. Such good fortune is not likely this year either, even with the best efforts of UPS to anticipate the kind of volume spikes that caused the system to get backed up. Nonetheless, UPS is working closely with retailers to spread demand and introducing its New Peak surcharge to try to limit shipments on the dates it knows will be the busiest.
As the holiday season shifts into high gear, the stress of the season is already weighing heavily on the shoulders of package carriers. For the sake of all the fulfillment teams working around the clock to get orders out the door, not to mention the loyal customers eagerly awaiting those products, let’s hope that the latest UPS delivery delays are just the company working out the kinks in its system.