Dive Brief:
- Package delivery volume initially overwhelmed UPS in the week following Black Friday, causing the company to revamp operations and extend the usual workweek, Bloomberg reported Tuesday. Even corporate workers were called upon to load trucks and deliver packages.
- Ultimately, the on-time ground rate for UPS was 99.1% as of December 23, while FedEx reached 98.7% according to ShipMatrix. Both achieved rates in the 90s for air shipments.
- However, angry non-recipients did visit both UPS' Atlanta and Denver locations post-Christmas.
Dive Insight:
Despite enormous volume increases, delivery performance excelled in 2017.
Anticipating the onslaught, UPS added an additional 95,000 workers for peak season 2017, while FedEx brought in roughly 50,000 (though hiring more steadily throughout the year rather than the season). Despite these numbers, a record breaking season initially hampered both, when e-commerce predictions broke the $100 billion dollar mark.
Industry experts also attribute the temporary delays to the massive surge in e-commerce.
"With regard to this past holiday season, online sales across the entire economy increased which in turn led to a ripple effect of delays as package volumes exceeded processing capacity," LateShipment co-founder Jason Polstein told Supply Chain Dive.
However, LateShipment CEO Sriram Sridhar cautions against taking the high delivery ratio at face value.
"Carriers report their on-time numbers only on an aggregate basis, often with a variety of caveats included to make their numbers look good," he said. "They never publish what conditions were considered to arrive at the numbers or get granular at a service type level or regional level."
"For instance," he continued, "Carriers relax on-time norms by several hours or even days for express shipping types during the holiday season. They completely remove such on-time delivery guarantees with regards to the most common shipping option — ground shipping — during the holiday season. Such on-time clauses are non-existent during all times for USPS-partnered shipping types, such as smart-post and sure-post. Carriers also waive responsibility for many delay types, such as weather-related delays."
As a result, customers may receive some shipments late, but carriers don't record those late shipments, which causes deviations in the data.
"Our numbers focus on the shipments purely with regards to the impact that merchants and their customers had and thus objectively counts every instance where a delay happened," Sridhar said. "Carrier numbers focus primarily on making the shipping carrier performance look good and often don’t accurately report the actual ground realities that merchants and their customers faces with regards to delays."
