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Less Room for Error This Holiday Season for Package-Delivery Firms
The busiest week of the holiday season arrived without much room for error for package-delivery companies. A record number of packages are expected to flow through shippers including FedEx Corp., United Parcel Service Inc. and the U.S. Postal Service.
But one wrinkle this year that will play a key role in determining the success, or failure, for retailers is the fact that Christmas falls on a Monday. That will place additional pressure on retailers and delivery firms trying to get orders delivered two days before the holiday, since not all packages will (or can) be delivered on a Sunday.
FedEx, which expected to handle as many as 400 million packages this season, upgraded its network with a new hub for its ground deliveries and expanded two existing hubs. The Postal Service bumped up its initial delivery forecast of nearly 850 million packages between Thanksgiving and New Year’s Day. UPS forecast shipping 750 million parcels this season, a 5.3% increase over last year. In anticipation of that surge, UPS planned to hire 95,000 seasonal workers for the holiday period and may ask drivers to work more hours.
The strain of increased e-commerce ordering was already showing up in delivery channels, since home deliveries tend to require more high touch attention and time than larger shipments to retailers’ stores. There’s even been some reports of shippers reducing delivery guarantees.
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