trending Market Intelligence /marketintelligence/en/news-insights/trending/zfZ231tj0lfc4-7wFw6VqQ2 content esgSubNav
In This List

UPS recovers from delays, influx of online shopping orders

Blog

Price wars in India: Disney+ Hotstar vs. Amazon Prime Video vs. Netflix

Blog

Volume of Investment Research Reports on Inflation Increased in Q4 2021

Blog

Using ESG Analysis to Support a Sustainable Future

Podcast

Next in Tech | Episode 48: The everything that is Industrial IoT


UPS recovers from delays, influx of online shopping orders

UPS Inc. said it has recovered from delays and a Thanksgiving weekend backlog in residential package deliveries and has shifted resources to handle holiday shipments through the remainder of the holiday season.

Following a report in The Washington Post on Dec. 12 outlining delivery delays by the national delivery services and others, UPS spokesman Steve Gaut acknowledged in an email to S&P Global Market Intelligence that there was an unexpected surge in delivery demand following the Thanksgiving and Cyber Monday holiday weekend, Nov. 24 to Nov. 27, but stressed that the company has recovered from the delays.

"We have returned to our original peak operating plan and normal delivery time-in-transit after the initial cyber week surge that exceeded our operating plans," Gaut said. "Black Friday and Cyber Week sales in the U.S. were record-breaking and UPS was asked to deliver more than we had forecast as a result of such strong e-commerce demand."

"We have shifted resources to areas where staffing or equipment was needed to handle excess volume," he added. "We believe this has resolved the bottlenecks that slowed service immediately following Thanksgiving."

He said demand for UPS services remains "very strong," adding that the shipping company expects to deliver roughly 750 million packages this holiday season, which would mark a 5% increase over the 2016 holiday total of more than 712 million packages. Gaut noted that UPS hired roughly 95,000 seasonal workers for the holidays to help deliver the more than 30 million packages it expects to deliver on 17 of the 21 operating days of the season.

Delivery companies are operating in a changing retail landscape, one that has seen online sales grow significantly, fueling demand for more on-time deliveries and increasing the pressure on those companies.

According to Adobe Digital Insights, Cyber Monday on Nov. 27 was the largest online sales day in history, with more than $6.59 billion in sales, a 16.8% year-over-year increase from 2016. Adobe also said that online holiday shopping drove $50 billion in revenue for the month of November, a 16.8% increase over 2016. Though the report did not estimate a number of purchases or expected package deliveries, it did note that this holiday season could be the first to surpass $100 billion in online sales.

The U.S. Postal Service said it is currently not experiencing delays, is meeting peak holiday demand nationwide, and expects to deliver more than 15 billion pieces of mail throughout the holiday season, USPS spokeswoman Kim Frum said in an email Dec. 12.

"We are fluid and moving, and not in a delay status," Frum said. "We have planned for this holiday season all year long and have flexed our network and expanded delivery hours to accommodate increased volume."

Moody's Analytics estimated in a Sept. 26 report that UPS and FedEx Corp. expected to see a delivery volume increase of roughly 15% during the 2017 holiday season. UPS said in July that it would apply surcharges to all UPS Ground residential deliveries during three of the five weeks between Nov. 20 and Dec. 24, excluding the period of Dec. 3-16.

FedEx has estimated it will deliver a record 380 million to 400 million packages during the holiday season, which it attributed to the rise of online shopping.

FedEx spokesman Chris Allen said in an email that "the FedEx networks are performing as designed and we are well-positioned to meet anticipated record demand for our customers around the world."

Allen did not mention delivery delays or issues.