Major Carriers Forecast Significant Growth in Holiday Shipping Volume

UPS, FedEx and the U.S. Postal Service are all projecting major growth in holiday shipping volume during the peak season, driven by the continued boom in ecommerce activity.

UPS, for example, is projecting 700 million deliveries between Thanksgiving and the end of the year, a 14% increase over 2015. This year has two extra shipping days, which contributes a few percentage points to the increase. UPS includes the last week of the year in its holiday forecasts because of the growth of returns, gift card activation and inventory replenishment during this period.

“The dramatic growth of online shopping and subsequent returns is expected to lift UPS package levels to a record high during this upcoming holiday period,” said Kathleen Gutmann, Senior Vice President, Worldwide Sales and Solutions for UPS during a recent analyst call. Average daily package volume for UPS rose 5.7% in the third quarter, more than double the 2.5% growth from the previous period.

UPS has opened 15 new or expanded hub facilities across the U.S., and is hiring 95,000 seasonal workers. It is also installing mobile delivery villages and adding thousands of delivery car positions to support its expanded ground delivery fleet during peak season.

FedEx is saying its peak demand will set a record, without providing a specific number, with each of the four Mondays between Thanksgiving and Christmas being among the busiest in the company’s history. The USPS, meanwhile, is projecting a double-digit increase in holiday parcel volume. Dec. 22 is projected to be the busiest delivery day for the USPS.

To handle peak demand, FedEx is hiring for 50,000 seasonal positions. The company also invested $2 billion in FedEx Ground to add 19 fully automated stations and four distribution hubs since last year, representing 12 million square feet of sortation space. It also added six non-conveyable annexes to handle oversize packages.

Mike O’Brien is Senior Editor of Multichannel Merchant