Atlanta-based United Parcel Service Tuesday predicted a 10% increase in holiday package deliveries and let it be known that it will handle the increase without dinging its bottom line or disappointing retailers and shoppers.
Meanwhile, FedEx Monday also said it expects a 12.4% increase in holiday shipments over last year, and similarly maintained it is prepared to handle the surge.
Both shippers are under pressure to demonstrate they can handle the continuing growth in holiday e-commerce, which in recent years has caught them flat-footed, especially when retailers promised last-minute deliveries extremely close to Christmas Day.
While e-commerce over the holidays continues to grow, aided by increased mobile shopping capabilities, expectations for late orders and free shipping are making things tricky for the two big shippers. It's mostly retailers that have made life difficult, promising free shipping even on last-minute orders.
“We need to make sure that if they are looking at moves like that, they need to understand what our capacity is,” said FedEx SVP Patrick Fitzgerald. “We do limit some delivery commitment to customers where necessary. That's not very common.”
UPS is planning last-minute surges in hiring in order to meet such demands, but with enough flexibility to tamp down hiring in case it over-estimates last-minute orders. That happened last year, when UPS attempted to avoid the last-minute delays of 2013 by over-hiring in 2014.
“We’ll bring the labor on as we need it and not all at one time,” UPS CFO Richard Peretz told the Wall Street Journal.
Both shippers say they’ve worked with retailers in order to gauge the upcoming demand as well as to let retailers know what their capacity is, realistically, for the holidays.