UPS Added a Day to Improve Holiday Delivery

Missed Christmas deliveries again made the headlines this holiday season.

Greater online shopping came as retailers were cutting shipping times even closer to the edge. The shipping company continued to send drivers out on Christmas Day to deliver the last, late packages for the holidays.

Amazon is a “good customer of ours”, said UPS CEO David Abney in a CNBC interview Tuesday, when asked to comment on last week’s Wall Street Journal story that Amazon and UPS’ relationship had soured. Similar reasons were cited in 2013, with both companies blaming a combination of e-commerce driven last-minute volumes and bad weather for the delays.

ShipMatrix found as well that both shippers were making deliveries Christmas Day trying to keep up with such a last minute crush of shipments.

This year UPS focused on what spokesman Steve Gaut described as a “disciplined approach” to peak season, that included pulling delivery dates forward on days when it had excess capacity in its network and informing retailers of hard cutoff dates for packages to make it by Christmas using UPS’ cheaper ground delivery service.

This year, amid a patch of inclement weather in the days just before Christmas, the shipping giants struggled to deliver a crush of last-minute gifts onto customers’ doorsteps in time for the holiday. (NYSE:UPS), for instance, was able to clear its backlog by 8 pm on the eve of Christmas with its staff taking time off on Christmas day to be with family and friends. That created a challenge in FedEx’s delivery system, resulting in delays in delivery of Christmas packages. Overall, about 94 percent of packages arrived on time compared with 87 percent previous year.

FedEx said operations were expanded on December 26 to get the packages that were delayed out to their destinations.

Ahead of the holidays, UPS forecast an increase of more than 10% to 630 million packages between Black Friday and New Year’s Eve. Jet.com the prior week warned customers that the company could miss holiday delivery deadlines due to “nationwide shipping delays that have affected many of our shipping partners”.

Meanwhile, United Parcel Service (UPS) was much more successful in dealing with the record-breaking number of packages. Following those hiccups, Mr. Abney said that UPS’s on-time rate stayed at between 97% and 98% through last week. Smartphones accounted for 16.3% of all online sales this year, a jump of more than 90% year over year, while tablets accounted for 14.5% of online sales. “Then Cyber Weekend and Cyber Monday, the volume – I wouldn’t say surged throughout the network, but in two or three primary locations, we got much more volume than we originally thought”.