On-time delivery declines for UPS as online package volume surges
14.12.2015 200 views
Cyber Monday and Thanksgiving weekend online sales set records. Then they caused a surge in e-commerce package delivery, and at least one shipping carrier experienced bottlenecks and delays.
The on-time delivery rate for UPS ground packages fell to 91% the week of Cyber Monday (Nov. 30-Dec. 6), down from 97% a year ago, according to software developer ShipMatrix Inc. The analysis is based on a study of the delivery of millions of packages from more than 1,000 shipper customers, says Mark D’Amico, analyst with SSJ Consulting Group, a sister company of ShipMatrix.
Top500Guide.com data shows 413 of Internet Retailer’s Top 1000 online retailers in North America use UPS as their shipping carrier.
The Monday after Thanksgiving was the largest ever U.S. online sales day, with $3.07 billion in sales, according to Adobe Inc. The Friday after Thanksgiving, Black Friday, ranked second this year at $2.74 billion, and Thanksgiving Day set a record for that holiday with Adobe’s data showing that shoppers spent $1.73 billion on Thanksgiving Day alone, or about $100 million more than the company had originally forecast.
United Parcel Service Inc. says the shipping glitches it experienced were brief and localized, and stemmed from volume surges at certain hubs that a spokesman would not identify. “Volume surges are an annual phenomenon and some locations are more heavily impacted than others,” he says, and UPS is not continuing to experience delays.
UPS continues to expect volume to be up about 10% this year, to 630 million parcels from 572 million last year, between Thanksgiving and New Year’s Eve. The shipper also is sticking with plans to hire 90,000-95,000 seasonal workers, which is in line with 2014 holiday hiring. “There are a few locations where we’re continuing to recruit, but we are on track with hiring,” the spokesman says.
During the week of Cyber Monday, no single retailer was responsible for an overflow of packages, and “the vast majority of customers got their packages on time. No one lost a package. Some consumers received packages in three days instead of two,” he says.
D’Amico says it can be difficult to predict where online consumers are located or will want their packages delivered. “Last year there were no (delay) issues, so UPS may be been overprepared. With numbers we get next week, we’ll be able to see what their response looks like to Cyber Week’s issues,” he says.
After the 2013 holiday season, UPS admitted it wasn’t ready for the large increase in late online orders that December. The lack of preparation hurt its bottom line during the fourth quarter of 2013 because the carrier was forced to deploy last-minute resources to keep up with demand and issue refunds when it failed to do so. Bitter cold and significant snow in 2013 also contributed to shipping delays.
Sears Holdings Corp., No. 5 in the Internet Retailer 2015 Top 1000 Guide, says it collaborates with UPS to forecast demand during the holiday season and it adjusted its cycle time delivery calculation over the Black Friday weekend "so that we maintain precision in our delivery commitments," a spokesman says. Shoppers were notified on Sears' transaction checkout page if delivery cycles were being changed, he says.
Online retailer and UPS customer HockeyShot.com (No. 931) ships goods throughout the United States, Canada and Europe. “We haven’t experienced any delays at all with UPS so far this holiday season, but it’s still early. Fortunately, there haven’t been any major weather delays so far,” customer service manager Jason Landry says.
“The best thing I can urge people to do is to get their orders in as soon as possible and observe shipping cutoff dates that the major shipping companies have,” the UPS spokesman says. While the weather forecast this year appears favorable, it’s not just snow that can hamper delivery. Heavy rains and flooding affected at least one hub during the week of Cyber Monday, he says.
Source: Internet Retailer
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