Dive Brief:

• Carrier auditor LateShipment.com predicts the average parcel delay rate across the U.S. will be approximately 9% this holiday season, though that rate could reach or surpass 16% in some states, according to its recent report.

• The study predicts delays will increase due to overburdened sortation hubs serving metro areas, worsening weather and other factors. As a result, for those in densely populated cities or rural areas with limited road access, LateShipment.com expects customers may experience a higher rate of delivery delays. In 2018, New York City and Miami saw the worst delays of 12.8% and 13% respectively. 

• LateShipment.com also expects FedEx, which it estimates will handle 512 million packages during the holidays, will perform better than usual after cutting ties with Amazon due to reduced congestion and volume pressure.

Dive Insight:

Fulfillment is increasingly becoming a critical part of the holiday season for retailers as more consumers buy gifts online. For consumers who don't use or aren't offered buy online, pick-up in-store (BOPIS) services, deals on shipping may become more important to them. The United States Postal Service expects to deliver about 800 million packages between Thanksgiving and New Year's Day. Meanwhile, Amazon has expanded its delivery fleet and hired 200,000 employees to help with its peak season deliveries.

These recent expansions stem, in part, from consumers' increasing desire to have quick and cheap shipping options. Amazon has influenced retailers to step up their shipping times to compete, thus speeding up the race to meet consumer demand.

But even the e-commerce giant isn't immune to delivery delays. Last week, Amazon blamed winter storms and high demand for why some customers experiencing shipping delays, according to a Recode report. On Friday, however, Amazon's Senior Vice President of Supply Chain Dave Clark tweeted that the company has "re-balanced capacity and it's all systems go now."

Seen a few reports that saying we’re having delivery problems. Not the case. Some deliveries were briefly impacted by weather earlier in the week but we quickly re-balanced capacity and it’s all systems go now. Thanks to our customers for what looks to be another big holiday.????????

— Dave Clark (@davehclark) December 6, 2019

During last year's holiday season, 8.44% of shipments didn't reach their destination on time, per the LateShipment.com report. To manage consumer expectations, the report recommends that retailers keep an eye on actions that can upset loyal customers and use their predictive delivery tools to inform consumers ahead of time. 

"Communicating with customers, especially in the post-purchase phase, builds trust, loyalty and credibility," LateShipment.com notes in its report. "[Customer] engagement in the last mile, right from the point of order pickup till its delivery at a customer's doorstep, demonstrates your commitment to quality customer service."