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Once again the packages are piling up in FedEx and UPS processing centers as Christmas Eve draws near, and it looks like not all of them will be delivered before Christmas. This has become a common problem in recent years as more and more people are ordering online to fulfill their Christmas shopping needs. On-time delivery times slipped dramatically for both UPS and Amazon in 2013, and while 2014 was smoother for both companies, it looks like delays are back in 2015.
The Wall Street Journal reports that on-time delivery rates for late 2015 have fallen from the typical 97% to 91% for UPS, and FedEx is reporting a 95% on-time delivery rate. While those differences can seem small, when you process v Is this something that last-minute online shoppers should be concerned about? Let’s dig into the issue a little more from the side of a retailer like Gritr Sports and our sister site Webyshops.com.
Processing Center Jams
This holiday season the delays are beginning at processing centers where the packages are directed and sent out to their various destinations. Retailers pack and ship their daily orders out on time for the most part, but once loaded into the parcel company truck, the packages are sent to a processing hub where they encounter a traffic jam of other trucks waiting to be unloaded. Business Insider reports that in many centers trucks have to wait several days before they are unloaded. This means that your holiday package is scanned as it is picked up from the retailer, but you typically won’t get a delivery date or tracking update until the package is unloaded off the truck. On the other end of the system, there are only so many trucks sent out for delivery each day, and this no doubt contributes to the backlog of packages as well.
Why is this happening again in 2015 after a relatively smooth 2014 for parcel companies like UPS? In 2014, UPS strengthened their Christmas season hires significantly to avoid a repeat of 2013, but this resulted in an unprofitable 4th quarter for UPS as Air Cargo News reports. This year UPS has pledged to hire as many seasonal hires as 2014, around 95,000 extra employees, but online orders are continuing to climb this year, and they dare not risk over-hiring like in 2014, even with the rate hike both UPS and FedEx enacted in November of this year.
Both UPS and FedEx will need to modernize and tackle these problems head on as online sales only stand to increase over the next several years, but for the time being, it is apparent they are still working out the problems. This is not meant to be an attack on the parcel companies as they face their own challenges in servicing the growing e-commerce market, but things are sure to be bumpy around Christmas for parcel companies over the next several years.
What This Means For Retailers
This backlog places internet retailers in a tricky spot. They all want to fulfill as many orders as possible for the holiday season, but even if they have inventory in stock and ship the package out the same day, they cannot guarantee on-time delivery at this time of the year. Worse yet, delivery delays can cause the retailer to lose face in the customer’s eyes. It is difficult for the customer to differentiate who is at fault for a delay, and it is upsetting for some when a gift does not arrive on time for Christmas as anticipated. However, once the package is turned over to the shipping company, there is nothing the retailer can do to ensure on time delivery despite their wish to get the package to the customer before Christmas.
After the major holiday delays in 2013, Amazon began to investigate shipping its own packages, and while small scale delivery options like Same Day Delivery are available in select metro areas, Amazon has not yet stepped up to challenge the large scale delivery volume that UPS and FedEx handle. However, another significant delay in holiday orders could change this, especially since Amazon generates a lot of sales based upon the “Arrives Before Christmas” update on many of their products. Delays could have other retailers re-thinking their holiday shipping plans for 2016 as well.
Get Those Last Minute Orders In Now
The bottom line is you should place those final Christmas orders now if you haven’t already. Even with expedited shipping, there can be no real guarantees from the retailer due to the current shipping delays. Chances are the delays will increase as next week begins, and the sooner you place the order the better. In the meantime don’t panic and worry that those orders already in transit won’t arrive. The vast majority of orders already placed will still arrive before Christmas.
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