To better compete with rivals FedEx and the U.S. Postal Service, UPS is testing Saturday delivery this summer. While the company would not say where the tests were being conducted, a report in Bloomberg said they would be in Atlanta, Philadelphia and Los Angeles.
UPS Public Relations Director Susan Rosenberg said rising ecommerce demand was the primary factor in deciding to conduct the tests.
“After reviewing the impact in these initial locations, we’ll evaluate any other roll out based on market demand and operational considerations,” Rosenberg said. “Our labor contract (with the Teamsters union) has the flexibility to run tests and evaluate new capabilities.”
The move makes sense in an ecommerce world where orders are happening seven days a week, said shipping consultant Jerry Hempstead. Without Saturday delivery, merchant shippers are forced to stockpile orders from Friday through Monday night, hitting UPS hubs on Tuesday and causing a disproportionate burden.
“Shippers also don’t have sufficient room to stockpile orders so they are demanding weekend pickups to get the units off their docks and into the hubs,” Hempstead said.
He said the addition of Saturday delivery could pose staffing issues for UPS, which has higher employee costs vs. FedEx and its largely contractor-based model.
“Do you add more route drivers Monday to Friday, or do you try to staff a Saturday operation and either pay sixth-day premium hours, or try to have some guys Monday to Friday and others Tuesday to Saturday?” Hempstead asked. “Their drivers are unionized and highly compensated and overtime pay is very expensive.”
While some markets will have the volume to justify six-day delivery for UPS, others may not, Hempstead said. “But I suspect it’s here to stay. We are all too accustomed to the immediate gratification of online purchases and Amazon has spoiled us.”