More than 6% of 508,000 FedEx and UPS parcels shipped by 100 small-to-medium-sized retailers between January and March 2019 were delayed, nearly 72% of them by a full day, according to a report from LateShipment.com. The numbers were worse for 3PLs: 7.6% of their UPS and FedEx parcel shipments arrived late.
As consumer behavior shifts and omnichannel retailing grows, retailers are getting closer to customers to improve service and help ensure profitability. Increasingly, they look to four key areas where shifts can make fulfillment more efficient: Retail footprint; manufacturer direct shipping; 3D print & ship; and pickup sites.
UPS will not add a residential delivery surcharge this holiday peak season, unlike the past two years, but will add surcharges for larger packages and those requiring additional handling. The company expects to exceed record volume of 800 million packages set last year, with 75% of it handled by automated sortation systems.
The U.S. Postal Service reported a drop in its parcel volume for the first time in nine years during its third quarter, as major customers like Amazon continue to shift business away from the USPS and take on some of the deliveries themselves. However parcel revenue was up thanks to rate increases and a DIM adjustment this year.
Two months after deciding not to renew its contract with Amazon for air freight service, FedEx is now parting ways with the ecommerce giant on the ground as well. FedEx will not renew its ground contract with Amazon when it expires at the end of August, effectively severing the long-term relationship as Amazon grows its own capabilities.
Ever since Amazon introduced Prime in 2005, the company has left everyone else chasing after them, and younger shoppers look for that type of experience everywhere. To succeed, retailers must meet customer demand for an enhanced delivery experience, including whenever possible fast and free shipping and unlimited returns.
Through new partnerships with Michael’s, CVS and Advance Auto, UPS is more than doubling its network of U.S. Access Point locations and adding Sunday pickup and delivery in January for business and residential customers as it engages in an arms race with FedEx. This gives UPS 63,000 U.S. locations, compared to 62,000 for FedEx.
Despite public pronouncements from FedEx Chairman and CEO Fred Smith that he is unconcerned about Amazon as a logistics competitor, the company used that term in its recently released annual report for the first time in connection with the ecommerce giant. Further actions by Amazon will “reduce our revenue” FedEx stated.