FedEx and UPS are seeing record online shipments; delays abound

Fed Ex Superhub operations in Memphis, Tenn., shows workers overwhelmed by online shipments. (Video link FedEx B-Roll)

Video images of FedEx workers tell the story: They are dwarfed by a mountain of boxes going through a conveyor belt.

This holiday season has been one for the books for carriers such as FedEx and UPS. Online shipments are zipping around at a record clip as more consumers have become adept at ordering online and using digital shopping to score presents for loved ones.

FedEx Corp., the No. 2 package-delivery company in the United States, forecasts a record volume this holiday peak season: 317 million shipments between Black Friday and Christmas Eve.

Recent retail surveys show that about 70 percent of Americans who own a mobile device plan to shop online over the holidays. Amazon, eBay, and Walmart have been the most popular shopping apps.

The National Retail Federation estimated that online sales would reach a record $117 billion during the holiday season covering November and December, up 11 percent from $105 billion in 2015.

To prepare for the onslaught, the company hired 50,000 more workers and opened four massive distribution hubs and 19 automated sorting stations. It is still getting crushed, making this holiday season the most demanding ever for FedEx and UPS workers.

Customer complaints over delivery times and service have been posted on websites such as Yelp.com. Many who wrote said delivery workers failed to knock on doors or ring the doorbell to let them know their package had arrived.

“I used to like UPS delivery,” Kesho W. from Philadelphia posted on Yelp. He joked that he would reduce his online purchases next time. “I now have a problem with them not even knocking on my door with a delivery. They want to drop my packages off at the corner store to make their lives convenient. I might as well go shopping in the store.”

Then there was Jack O. from Philadelphia: “Fed Ex drivers try their best not to deliver package,” he posted on Yelp. "No one rings door bell. No knock on door. A missed info notice with the tracking number. Constant ongoing problem.”

Recently cited ground shipping rates are almost the same as last year, said Tom Caporaso, chief executive officer of Clarus Commerce, an e-commerce solutions provider which owns FreeShipping.com and ShopSmarter.com. 

"Free-shipping-day sales, retailers’ attempts to woo last-minute shoppers, and potential weather problems will likely add to concerns about order delivery times,”  he said. 

The best move consumers can make, he said, is plan ahead. 

UPS declined repeated requests to comment, but FedEx acknowledged the strain that the deluge has caused.

“We expect record peak volume,” said FedEx spokeswoman Rae Lyn Rushing. “We are not releasing an exact projection, but continue to work closely with our largest peak customers to ensure our networks are prepared to provide outstanding service even with the potential for multiple days of demand more than double our average daily volume.”

She said the company is getting about 10 percent higher volume in total shipments than last year.

Retail industry experts say among the reasons for the explosion in online shipments this year is the newfound respect among retailers for e-commerce and their willingness to do whatever it takes to cater to their customers’ timeline.

“In previous years, retailers essentially "closed" the holiday shopping/buying season at their convenience, whereas the current dynamic is customer-centric/customer first, which affords consumers more options for last-minute shopping,” said Peter Gold, chief digital marketing officer at Market America & Shop.com, an online retailer that  does one-on-one marketing over the internet. “That means that this season, orders will still be processed and fulfilled on Christmas Eve and even on Christmas Day."

Earlier this week, Kurt Salmon, part of Accenture Strategy,  launched "Santa’s Nice List," which listed the retailers that pulled out all the stops to ensure customers received their orders quickly and accurately in time for the holidays last year.

The rankings were based on shipping times for orders placed on Cyber Monday from 84 retailers. Luxury brands dominated the top 10 list of retailers. Among the top delivery performers were Coach in two days; American Eagle, Burberry, and Kate Spade in three days; and Lululemon, DSW, Nordstrom, GNC, and Zappos in four days.

Steve Osburn, managing director at Accenture Strategy’s Kurt Salmon, said the days of retailers blowing off online are over. 

“Retailers really focused on this the last five years,” he said. “When they deliver, it really changes what consumers expect.”

Contact sparmley@phillynews.com

215-854-4184 or @SuzParmley

Continue Reading