Package Delivery Companies Struggle To Keep Up With Demand

December 14, 2016

© Stephen Coburn | Dreamstime

Seems like your packages are being delayed a bit in delivery?  You would be correct in that assumption. The trend of online shopping and free delivery offered by retailers means more packages in transit and even through UPS and FedEx were prepared for it, they may have underestimated it for the season.  The Wall Street Journal reports the shipping companies were expecting a lot of online orders, but not quite as many as were placed. UPS expected to handle a record of more than 700 million packages (14% more than last year), while FedEx predicted a 10%t bump. Analysts say on-time delivery rates for both were down a bit in the weeks after Thanksgiving, compared to their average rates for the rest of the year. On-time rates for UPS Ground is down a bit from an average of 98%-99% to 96.3% last week, while FedEx Ground is at 96.9%.  However it is much improved from last year when the average on time rates were 95% for FedEx and UPS during the same period. The source of all this trouble is, once again, e-commerce, which this year made up 25% of consumer spending on Black Friday and the two days leading up to it, a surge from last year’s 18% figure, and almost double the number for the same period in 2012.

SOURCE: The Wall Street Journal

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