Holiday disaster looms as UPS, FedEx overloaded after online shopping soars
AP
Retailers like Target broke online-sales records on Thanksgiving Day and the following Monday this year after luring shoppers with discounts.
Broadly, online sales from the long weekend totaled $11 billion this year, according to Adobe Digital Index.
But the rush is translating to delays in shipping that could mean packages don't make it to consumers on time and retailers have to refund orders or offer other compensation like they did in 2013.
An executive at one fulfillment company - which picks and packages customer orders for retailers - told Business Insider that packages in New Jersey and California are sitting in trucks outside FedEx and UPS hubs, waiting several days to be unloaded and processed.
The person, who asked not to be identified, explained that shoppers tracking the packages will only see that a label was created but not that it was picked up by UPS or FedEx. That won't happen until the package is unloaded from the trucks at the distribution facilities.
AP
The fulfillment executive told Business Insider on Thursday that one trailer has been waiting to be unloaded since last Saturday, though most are more like two days behind schedule.
The executive's claims are consistent with data from ShipMatrix, a software company that tracks package deliveries, and UPS acknowledged some logjams.
UPS and FedEx are experiencing delays this year - with on-time delivery rates for UPS ground packages falling to 91% last week, down from 97% for the same period last year, and FedEx rates falling to 95%, from 97% last year, ShipMatrix told Business Insider.
The Wall Street Journal reported the ShipMatrix figures on UPS earlier.
Similar problems in 2013 left Walmart offering affected customers gift cards of up to $25, and Kohl's offered customers refunds on delayed packages. Those delays were in part caused by bad weather. We reached out to Walmart and Kohl's to see if they're hearing about delays and will update this post if we hear back.
"It's surprising for UPS, given that for two holiday seasons they really haven't gotten it right," Edward Jones analyst Logan Purk told Business Insider. "This year they started in January or February to plan for this holiday season, so we thought it would come together this season, but it seems like it's not."
A UPS spokesman said that the company is addressing heavy traffic and that the "vast majority" of customers have received their packages on time.
"UPS did experience some high-impact areas driven by volume that came to some of our sites at levels greater than the original peak plan for those locations," spokesman Steve Gaut told Business Insider.
The company manages the surge by sending teams of personnel to "high-impact locations to manage the workload."
"We have processed the exceptional volume at those locations," he said, and the network is now running according to plan and "customers can expect to receive their shipments in line with the service-level commitment.
FedEx didn't respond to a request for comment.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- An Ambani disruption in OTT: At just ₹1 per day, you can now enjoy ad-free content on JioCinema
- In second consecutive week of decline, forex kitty drops $2.28 bn to $640.33 bn
- SBI Life Q4 profit rises 4% to ₹811 crore
- IMD predicts severe heatwave conditions over East, South Peninsular India for next five days
- COVID lockdown-related school disruptions will continue to worsen students’ exam results into the 2030s: study
- India legend Yuvraj Singh named ICC Men's T20 World Cup 2024 ambassador
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market