Holiday shipping rush puts UPS, FedEx, USPS to the test | Business

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A labor shortage, supply chain crisis and increased reliance on online shopping during the pandemic promise to make this holiday season one of the biggest tests for the shipping giant UPS and its competitors.

Shipping companies have faced monumental challenges this year, as companies around the world struggled to hire enough workers. UPS, for example, started ramping up its workforce months ago with the goal of hiring 100,000 seasonal workers, but its website as of early afternoon still had over 2,000 seasonal vacancies.

Companies have also faced supply chain issues. Some of them have eased, but last minute shipments may not arrive in time for Christmas.

“As we get closer to the holidays, we are going to see an exceptional influx of shipments,” said Sriram Sridhar, CEO and co-founder of LateShipment.com last week.

“The demand and the shortage of supply in terms of manpower and infrastructure will lead to a situation where we are going to see an increase in problems.”

The job market is a big enough issue that UPS has asked management employees to help deliver packages during the peak holiday season to markets where it is needed. The company called this a way for UPS employees to “all come together … by working alongside our operations and our frontline team members.”

UPS recorded an on-time delivery rate of 95.8%, slightly higher than the 84.8% of its competitor FedEx and slightly higher than the 95% of postal services, according to data from logistics data company ShipMatrix from the 5th to the 11th. December.

UPS, FedEx, and the U.S. Postal Service got some relief during this holiday season as buyers, motivated by supply chain issues and shipping delays, purchased gifts early. UPS said its research showed 91% of consumers plan to finish all their holiday shopping a week before Christmas, up from 81% last year. Almost 96% started shopping earlier if sales started earlier.

Retailers were motivated to spread their sales with past orders to avoid a rush for last minute shipments. Last year, UPS imposed shipping limits on some of its larger customers, refusing to pick up some packages that exceeded set volumes during peak periods.

UPS CEO Carol Tomé said earlier this year that she expected vacation shipping demand to exceed capacity and that UPS would limit the volume of vacation packages it handles. to control the costs of chaos “.

“They balance capacity,” said John Haber, CEO of Spend Management Experts, an Atlanta-based supply chain consulting firm. UPS’s increased focus on the most profitable types of shipments rather than volume growth means it is decreasing some low-margin shipments from large shippers, he said.

A UPS spokesperson said the company has spent years building its air cargo and ground handling capacity to accommodate each holiday season.

The Postal Service battled delays in the 2020 holiday season. This year it rented 13 million square feet of additional space and worked to add more than 40,000 seasonal workers. The Postal Service has significantly improved its punctuality this year compared to last year, according to ShipMatrix.

Supply chain concerns about the holiday season piled up for much of the year, as growls developed in many links in the network. But the situation has improved somewhat in recent weeks.

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For a while, a queue of 30 ships stretched out from the jetties at the Port of Savannah awaiting unloading, but the worst of the bottleneck was ashore after the containers were pulled from the ships. At the height of the traffic jam, nearly 90,000 containers were stacked waiting to be transported by trucks or trains.

Congestion in Savannah had dropped by about a third to about 65,000 containers by early December, according to Griff Lynch, executive director of the Georgia Ports Authority.

“We didn’t get out of the woods. But we are moving more volume as the inventory on the site decreases, ”he said.

By the first week of December, nearly all cargo for holiday consumption had passed through the port, Lynch said. “There may be a bit of cleaning up, but for the most part it’s done. “

© 2021 The Atlanta Journal-Constitution. Visit ajc.com. Distributed by Tribune Content Agency, LLC.

Copyright 2021 Tribune Content Agency.


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