Despite taking measures to prepare for an enormous increase in package volume, analysis from LateShipment.com reveals FedEx and UPS are still struggling to keep up during the pandemic. Notably, both FedEx and UPS have put plans in place to hire 70,000 and 100,000 temporary workers, respectively, during the holiday season to keep up with the surge of deliveries.
Additionally, both companies will institute peak surcharges for the holiday season in order to even out the surge in package volumes and high operational costs endured while fulfilling orders — making shipping even more expensive for retailers.
According to data from LateShipment.com, as the pandemic has escalated FedEx experienced disruptions that caused delayed shipments across retail categories. At the peak of the pandemic the category that experienced the most delay at a rate of 14.4 percent was the jewelry category, followed closely by sporting goods at 13 percent and apparel at 11.3 percent.
Similarly, UPS experienced delays at 12.3 percent in sporting goods, followed by 11.9 percent in the food category, and 11 percent in electronics.
In light of the already difficult second and third quarters of 2020 LateShipment.com’s report warns retailers, and shoppers, to prepare for package delays in the heightened holiday season. Package delay rates are predicted to be 1.5 to 2 times worse than any other holiday season and the average package delay rates are expected to be between 14 percent and 18 percent with densely populated states like New York and California expected to see record package delays as high as 30 percent.
Further, the company predicts the impact on popular e-commerce service types, both ground and express services offered by UPS and FedEx will be affected and result in delivery delays. Still, the authors of the report say express service types are still more likely to reach destinations on-time due to cargo airlines resuming operations.
“The overall number of holiday packages that will be sent out will exceed the handling capacity of shipping carriers, thereby missing promised delivery windows,” the report’s authors said. “In the run-up to the holidays, the supply chain will take center stage and the winners are going to be those retailers who will take measures to mitigate the impact of delivery delays on customer experience and loyalty.”
LateShipment.com forecasts FedEx will outperform UPS from an on-time delivery standpoint this holiday season due to its handling lower package volumes and ability to respond faster to potential disruptions in the delivery networks.
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