Dive Brief:
- Parcel delivery speeds improved in November by 27% year over year, according to project44, a promising sign for shippers and carriers as the peak holiday shipping season kicks off.
- November's average delivery time – from order placement to arrival – was 3.7 days, compared to 4.1 days the year before, per an emailed report from the supply chain platform provider. On-time delivery performance remained "on par" with the previous year.
- "Overall, delivery times are expected to be lower for peak season 2024 compared to previous years," the company said, adding that this year's holidays are "off to the strongest start since Covid-19."
Delivery speeds remain steady as peak season kicks off
Dive Insight:
Operational improvements from both shippers and carriers are cutting down delivery times, said Jenna Slagle, project44 senior data analyst, in emailed remarks.
Better inventory planning and warehouse optimization has accelerated picking and packing speeds, Slagle said. Once packages are shipped, carriers' transit times have improved thanks in part to more efficient routes.
Shippers have also tapped into a wider array of parcel carriers since the COVID-19 pandemic took hold, reducing their exposure to potential slowdowns at top carriers like FedEx and UPS. Carrier diversification is heating up heading into the holidays, project44 reported.
"Shippers continue to diversify their networks, as they did in 2023, increasing the number of carriers used by 5% between October and November," according to project44.
These tailwinds can't entirely prevent bottlenecks during the holiday volume surge. Fulfillment and transit times are still expected to climb in December and January due to the seasonal spike in demand, per project44. Supply chains also have to grapple with fewer delivery days between Black Friday and Christmas compared to years' past.
Parcel carriers say they are up for the challenge after making adjustments to their networks.
The U.S. Postal Service is delivering packages outside of couriers' standard delivery routes and collaborating with Amazon to avoid overloading the agency's hubs. FedEx is slowing down its Ground-Express network integration, known as Network 2.0, during the peak season to avoid impacting customer service, EVP and CFO John Dietrich said at a November investor conference. UPS is leveraging technology to maintain a smooth flow of packages.
"We'll leverage our network planning tools and other proven technologies to control first how the volume comes in," UPS CEO Carol Tomé said in an October earnings call. "Second, how to flow more volume to our automated facilities. And third, how to adjust the network to operate as efficiently as possible."
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