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FedEx Doesn’t Shy Away from Predicting a Record-Breaking Holiday Season

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FedEx

‘Tis the season for hot cocoa, snowball fights and $630.5 billion in retail sales.

The National Retail Federation released the news that between November and December 2015, holiday sales are expected to spike 3.7 percent higher than last year. Why the increase in numbers? According to FedEx, this year’s holiday shopping season includes one extra day, allowing for more last-minute consumer spending.

Furthermore, the convenience and generally hassle-free nature of online consumption make it many buyers’ go-to destination for shopping, especially during the busy holiday months when brick-and-mortar stores can be almost unbearably packed.

In response to the growing e-commerce industry, companies that are responsible for delivering goods are taking extra time to prepare for the holiday rush; and with good reason.

“The shift in consumer shopping patterns, fueled by the rise of e-commerce, continues to drive our volume,” said Frederick Smith, CEO of FedEx.

The Memphis-based delivery service anticipates that it alone will transport “a record-breaking 317 million shipments” during the season, particularly between Black Friday—customarily the busiest shopping day of the year—and Christmas Eve. This astronomical number is 12.4 percent higher than last year.

Meanwhile, it expects that on Cyber Monday—an online shopping tradition since 2005—and the first two Mondays in December, its “average daily volume” will jump more than twofold.

FedEx Senior Vice President for Integrated Marketing and Communications Patrick Fitzgerald told Reuters, “Each year we face a challenge that’s greater and that’s driven by e-commerce. We’ve learned that planning and preparation is key.”

In the past five years, FedEx Ground has put in roughly $2.5 billion for “network and expansion” to help make the company as efficient as possible. It seems that the investments have paid off, as FedEx is about 27% faster than one of its leading competitors, UPS Ground, which struggled last year by over-compensating for what it expected to be a much busier season.

FedEx Express also took technological strides by adding “Enhanced Vision Systems to 250 aircraft.” The systems help pilots to better see in “low visibility conditions,” which is especially useful during the snowy winter months. Moreover, FedEx said it will hire an additional 55,000 seasonal employees to help with the holiday rush.

As equity analyst Logan Purk explained, “E-commerce and the boom it gets during the holidays is far surpassing what anyone really expects.”

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