Carriers Laboring to Keep Up With Holiday Ecommerce Deluge

holiday shipping peak, peak holiday season 2015, UPS, FedEx, ShipMatrix, U.S. Postal Service, USPS, ecommerce fulfillment

For the week of Dec. 6 to Dec. 12, the on-time performance by UPS slipped a bit from 2014 while FedEx and the U.S. Postal Service improved slightly, according to data from shipment visibility software firm ShipMatrix. However UPS is laboring under an ecommerce parcel load that is about twice the size of FedEx.

According to ShipMatrix, UPS saw on-time performance of 93.2% for the week, down from 96.5% in 2014; this was not as bad as the prior week, when the data showed UPS’s on-time number dropped from 97% in 2014 to 91% this year. FedEx’s on-time performance from Dec. 6-12 rose from 94.8% in 2014 to 95.3% this year, according to ShipMatrix, while the USPS’s last-mile service went from 98% to 98.7%.

Bizrate Insights had a slightly bleaker picture of holiday ecommerce shipping. According to its survey of 130,000 shoppers, on-time performance across all carriers fell from 93% on Dec. 3 to 89.7% on Dec. 10. It rose slightly to 90% on Dec. 15.

“Even though retailers and carriers all expected ecommerce growth this year over last year, on-time delivery – as defined by the customer – is down 1.7% on Dec. 15 from the same date last year,” said Hayley Silver, Vice President of Bizrate Insights. “Retailers and carriers started stronger in December 2015 over 2014, but then dropped under the weight of the holiday orders. Furthermore, at the time orders were placed, many retailers had not adjusted customer expectations of when they would receive them.”

ShipMatrix President Satish Jindel said the overall performance numbers were lower on the Wednesday through Friday following Cyber Weekend, and into the following week, as massive volume flowed through the networks, then improved thereafter. He said the last-minute crush of this week and early next week will likely cause another falloff.

“The good news is, (the carriers) are performing better than the numbers show, and this week should be an improvement for all of them,” Jindel said. “The key will be how they handle rush orders using express services as the season comes to a close. We’ll see what happens in the final leg.”

To put the performance numbers in context, Jindel said the off-peak on-time delivery rate is about 97% for both UPS and FedEx, when their volume is about 50% lower than it is now. “Now they’re achieving close to that with all that extra volume,” he said. “It’s a whole new level of challenge, so these are very impressive numbers.”

UPS has been renting out hundreds of U-Haul and Budget Rental trucks to augment its fleet and honor its commitments, seeing it as a cost-effective way to handle the deluge. FedEx has also said it uses rental vehicles to address peak demands, while the USPS is adding minivans in many locations.

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