Amazon, FedEx and UPS see drop in Cyber Week on-time deliveries

UPDATE: Dec. 12, 2019: Amazon provided a statement calling the ShipMatrix numbers "inaccurate" shortly after publication. It did not provide alternative numbers. "Amazon performed far better than what’s being reported," a spokesperson said in a statement emailed to Supply Chain Dive. "Some deliveries were briefly impacted by weather but we worked quickly to re-balance capacity across our network, setting customers up for a great rest of the season."

Dive Brief:

Carriers delivered about 80 million packages per day during the week of Cyber Monday, but Amazon, FedEx, UPS and the U.S. Postal Service each saw a drop in on-time delivery performance during the week, according to data from ShipMatrix emailed to Supply Chain Dive.
During the week of Cyber Monday, Amazon's on-time performance was 93.7%, FedEx's was 90.4%, UPS' was 92.7% and USPS' was 92.3%. All four carriers had on-time performance higher than 98% during the week of Thanksgiving, according to ShipMatrix.
There were multiple reasons for the drop, according to Satish Jindel, the president of ShipMatrix. The weather was the main issue as snow was dumped on the East Coast. Amazon also faced fulfillment delays and growing pains associated with its logistics business, Jindel said.

Matt Leonard / Supply Chain Dive, data from Lateshipment.com

Dive Insight:

Large volume increases at Amazon's approximately 100 service centers across the county is making it difficult for the Amazon Logistics staff to get the parcels sorted in time for drivers, Jindel said in an email to Supply Chain Dive.

On Wednesday, Amazon said millions of items would be available for Prime Same-Day Delivery "right up until Christmas Eve" and one-day delivery will be available for more than 10 million items, according to a press release. This will be the first holiday season the e-retailer has offered swift shipping speeds.

"This Christmas season is a big test for them," Dale Rogers, a professor of logistics and supply chain management at Arizona State University, told Supply Chain Dive in an interview. "To vary from high 90s to low 90s, I'm sure it gets a lot of attention within the company, but that's still a pretty good performance at a time where most every household is buying something from you."

There is also the matter of appeasing customers who have voiced their displeasure when Amazon packages don't show up at the promised time.

"I think people believe them when they say they're going to do it in one day," Rogers said. "And I think there's a lot of anger when they fall short, you know, they really are a focus on the customer company. And so when they can't be successful in terms of meeting their promise, it's that's a huge deal there at Amazon."

But Jindel suggested customers also need to be aware that not every item on Amazon's site is available for same-day or next-day delivery. And some items are sold on the Amazon Marketplace by a third party that has its own shipping promises.

Numbers from a Lateshipment.com report suggest late deliveries are more likely during the run-up to the holidays. For example, 4% of FedEx packages were delayed in Miami between Jan. 1, 2018 and mid-October 2018, but this jumped up to 13% during the month before Christmas last year. FedEx Overnight and UPS Next Day Air were most likely to see delays with about 20% of orders using these services in 2018 being late. The report did not look at USPS nor Amazon.

While some customers might have been frustrated by their late delivery last week, Rogers said it won't be a big problem.

"This is really not a big deal in the long run," he said. "I'm sure it's a huge deal at Amazon this week, but I think in general this is something they'll work their way through and I think they'll be fine."