UPS, FedEx handle record holiday surge with minimal delays

Both couriers now have entered the holiday season’s returns cycle, which also promises to be busy.

By Michael Sasso / Bloomberg

United Parcel Service and FedEx delivered almost all of people’s presents by Christmas Day, with the former company finishing strong after a bruising late November.

Early figures signal that this holiday season is shaping up as among the most challenging for the package-delivery giants, with Cyber Monday sales alone jumping 16.8 percent to $6.6 billion, according to Adobe Analytics. The volume overwhelmed UPS in the week following Black Friday, and the Atlanta-based company responded by extending the workweek for some employees and redeploying office workers to help load trucks or deliver packages.

While some customers groused on social media about missed packages, UPS’s on-time rate for items delivered by ground was 99.1 percent in the week ended Dec. 23, according to parcel tracking firm ShipMatrix Inc. FedEx’s rate was 98.7 percent. The rate was in the high 90s for each company for packages shipped by air.

“On a macro level, both carriers did a nice job this year,” said Glenn Gooding, a shipping consultant in the Atlanta area with iDrive Logistics. “You’re going to find very small, isolated affected areas, and those are contingent on a unique issue.”

Both couriers now have entered the holiday season’s returns cycle, which also promises to be busy. UPS on Wednesday projected that returns would peak at 1.4 million packages on Jan. 3, up 8 percent from a year earlier. Consumers returned more than 1 million packages a day to retailers this month, UPS said.

Nailing the holiday season has become critical for UPS, which this year estimated it would deliver 750 million packages between Thanksgiving and New Year’s Eve, or almost double FedEx’s total. In 2013 UPS failed to deliver some packages before Christmas, sparking criticism from Amazon.com Inc., a key customer. A year later, UPS overspent on temporary workers and facilities and watched those resources sit idle.

UPS’s home market of Atlanta was a trouble spot this year, and several media outlets showed images of angry consumers lined up outside of area facilities after Christmas. Earlier in the season UPS acknowledged problems around Atlanta and it used some office workers to help clear the backlog. Denver was another problem location early on.

The company won’t give a breakdown of its peak performance until Feb. 1, but “the vast majority of people got their packages on time,” said UPS spokesman Glenn Zaccara.

Memphis, Tennessee-based FedEx had “another record-breaking peak season” and delivered “outstanding holiday service,” said spokesman Jonathan Lyons.

UPS hasn’t said how much it paid in overtime. At least some employees had to work on Sunday, which isn’t a work day for most employees. The company should be able to recover some of its overtime costs with a new 27-cent surcharge it imposed on packages shipped during certain weeks and with higher fees for items by air, said Satish Jindel, whose firm publishes the ShipMatrix survey.

After a “bubble” developed within UPS’s system after Cyber Monday, UPS told drivers they might be scheduled to work as many as 70 hours over a period of eight days, followed by 34 hours of rest.

Teamsters General President James Hoffa criticized UPS Chief Executive Officer David Abney for failing to hire or train enough employees. The company responded that it had adopted a 70-hour workweek previously and that during the week of Dec. 11, 88 percent of drivers worked less than 60 hours.

deliveries-bg

Talk to us

More in Herald Business Journal

Logo for news use featuring Snohomish County, Washington. 220118
Business Briefs: State minimum wage rises in January

Also, Boeing workers’ donations support local nonprofits and fundraiser for businesses impacted by Bolt Creek wildfire.

Jollee Nichols, right, and daughter Ruby, 2, work on an art project together at the Imagine Children’s Museum on Wednesday, Oct. 26, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
With new addition, Imagine Children’s Museum doubles in size

More than just space, the Everett museum’s new $25 million wing is an investment in mental health.

Artistic rendering of 526 Speedway exterior. (Mosaic Avenue Realty Ltd.)
Mosaic Homes looks to add industrial condo space in Mukilteo

Mosaic Homes steps into commercial real estate development with 526 Speedway, an industrial condo project.

Andy Illyn with a selection of his greeting cards, Cardstalked, that are sold at What’s Bloomin’ Floral on Friday, Oct. 28, 2022 in Arlington, Washington. (Olivia Vanni / The Herald)
Adventure-seeking cop finds new thrill in greeting cards

Mukilteo assistant police chief Andy Illyn unwinds by turning puns and dad jokes into greeting cards.

Dan Murphy, left, Mary Fosse and Rex Habner. (BadgleyPhotography.com / Snohomish & Island County Labor Council)
Everett City Council member honored by local labor council

Mary Fosse, candidate for District 38, receives the first annual Mike Sells Labor Champion award.

Erika Heer is an EVP, Chief Human Resources Officer at Coastal Community Bank.
Tips for Businesses to Prepare for the Pay Transparency Law, Effective Jan. 1

A recent amendment to Washington law will soon require employers to disclose… Continue reading

Lisa Lefeber, CEO of the Port of Everett, speaks to a crowd while in front of a sign celebrating the opening of the new Norton Terminal on Thursday, Dec. 1, 2022, at the Port of Everett in Everett, Washington. (Ryan Berry / The Herald)
Port of Everett christens new Norton cargo terminal

The $40 million terminal took two years to complete and doubles the port’s storage capacity.

Screen printed dish towels available at Madrona Supply Company on Saturday, Oct. 22, 2022 in Clinton, Washington. (Olivia Vanni / The Herald)
Do some good along with your Christmas shopping

Head across the Sound to Whidbey Island for gift-buying with a do-gooder spirit

Shoppers walk in and out of Macy’s at Alderwood Mall were Black Friday deals are being advertised on Thursday, Nov. 17, 2022 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Go ahead, hit snooze: Most Black Friday deals are online

Braving the stores on Black Friday is still a thing, but more retailers are closed on Thanksgiving.

FILE - In this photo provided by the Washington State Department of Natural Resources, a crane and boats are anchored next to a collapsed "net pen" used by Cooke Aquaculture Pacific to farm Atlantic Salmon near Cypress Island in Washington state on Aug. 28, 2017, after a failure of the nets allowed tens of thousands of the nonnative fish to escape. A Washington state jury on Wednesday, June 22, 2022, awarded the Lummi Indian tribe $595,000 over the 2017 collapse of the net pen where Atlantic salmon were being raised, an event that elicited fears of damage to wild salmon runs and prompted the Legislature to ban the farming of the nonnative fish. (David Bergvall/Washington State Department of Natural Resources via AP, File)
State won’t renew leases for Puget Sound fish farms

Cooke Aquaculture has until Dec. 14 to wrap up steelhead farming and begin deconstructing their equipment.

Kevin Flynn, right, a meat-cutter with the Marysville Albertsons, hands a leaflet to a shopper during an informational campaign on Wednesday, Nov. 9, 2022. Flynn was one of about a dozen grocery store workers handing out leaflets to shoppers about the proposed merger between Albertsons and Kroger. (Mike Henneke / The Herald)
Proposed merger of Albertsons and Kroger worries employees

Workers at an Albertsons in Marysville urge shoppers to sign a petition blocking the $25 billion deal.

Kim Taylor, left, and Jeff Stoner co-own Greenbank Cidery, a newly opened taproom on Whidbey Island with eight varieties of cider on tap. (Rachel Rosen / Whidbey News-Times)
Cider tasting room opens on Whidbey Island

The owners of Greenbank Cidery have opened a tasting room in Coupeville. Eight varieties of cider are on tap.