UPS expecting record holiday deliveries as e-commerce continues to drive revenue
UPS is predicting a record holiday season in 2016, anticipating it will deliver more than 700 million packages between Black Friday and New Year’s Eve, up 14% from the same period in 2015.
UPS said it has been preparing all year for the busy holiday season by opening at least 15 new or expanded hub facilities across the U.S. The shipping company also has developed mobile delivery villages to improve delivery efficiency, and has added thousands of delivery car jobs to support its expanded ground delivery fleet during the period.
UPS issued the holiday forecast as it posted its third quarter earnings report, in which it also stated that U.S. domestic deliveries per day rose 5.7% during the quarter, driven by e-commerce. Revenue for the quarter reached $14.9 billion, up about 5% year over year, and overall international operating profit increased 14% to $576 million.
UPS certainly not been demure about sharing its expectations for a wildly successful 2016 holiday season. This particular season does have two extra operating days compared to the 2015 holiday season, UPS said, but there is much more than that at play. The not-so-secret engine of these forecasts is ongoing and unstoppable e-commerce growth, but another factor is that Black Friday is no longer just one day long, but something more like its own month on the calendar.
The latest forecast from UPS comes about one month after FedEx came out with a similarly rosy holiday outlook, saying it expects record holiday shipments for the second straight year. Both shipping companies said they are hiring roughly the same number of seasonal employees to support the holidays as they did last year.
The evidence suggesting a big holiday season is not just coming from UPS and FedEx either. Just this week, consulting firm Deloitte released results from a study that suggested retailers will see record web traffic this holiday season, which of course could directly translate into mountains of e-commerce shipments. Best Buy also has renewed its free holiday shipping offer from last year, and other holiday-related deals and discounts are sure to drive even more shipping activity.
But holiday season is a time of delays and complaints just as surely as it is a time of great joy. Last holiday season, the U.S. Postal Service got slammed for website problems during the height of the season, and it appears UPS has put a lot of work into preparing ots underlying infrastructure to support its forecasts of a silly season. We're about to find out if that preparation will pay off.
This story is part of our ongoing coverage of the 2016 holiday shopping season. You can browse our holiday page for more stories.