UPS made this headlines this week with reports that it had tapped the brakes on package pickups from big-name brands including Nike, Gap and Macy’s—smack dab in the middle of retail’s make-or-break holiday season.
But was there really any way to avoid this kind of crunch in a year when virus-wary shoppers working around widespread store shutdowns have kicked e-commerce into overdrive?
In the months leading up to Black Friday, shipping giants undoubtedly did what they could to prepare for the inevitable onslaught of parcels wending their way around the country. UPS slapped surcharges—$3 per package for ground shipments and other low-priced options and up to $4 for air—on high-volume shippers that move more than 25,000 packages per week during the holiday season. FedEx Ground, for its part, expanded year-round Sunday residential coverage to nearly 95 percent of the U.S. population.
These preparations have proved prescient. Despite Amazon, Target and Walmart kicking off the holiday shopping season early this year with October sales events, e-commerce orders saw a 26 percent burst on Black Friday, according to Bluecore, whose artificial-intelligence personalized marketing platform helps Tommy Hilfiger, Express and The North Face effectively target consumers and drive strong conversion rates.
Following this surge in e-commerce, UPS told its drivers to stop picking up packages from six major retailers: Gap, Nike, L.L. Bean, Hot Topic, Macy’s and electronics retailer Newegg. The halt in pickups, however, may not be the last.
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UPS told Sourcing Journal Friday that it’s working closely with its largest clients “to steer volume to capacity and ensure the UPS network is reliable for all customers.” This collaboration includes specific capacity allocations for this Thanksgiving holiday weekend and throughout the festive season, added UPS, which said it has worked with large retail customers to ensure they know how much capacity is available to them.
“It is critical that UPS and its customers execute the plans built through our collaboration,” UPS said. “Agreed upon strategies for our largest customers include shifting package volume away from the heaviest demand shipping days, fully utilizing weekend capacity, and aligning promotional strategies with capacity. If demand exceeds planned allocations, we will work with our larger customers to ensure the volume gets picked up and delivered as more capacity becomes available in our network.
“UPS is committed to maintaining the reliability of its network for other customers, including small- and medium-sized businesses, which have been hit hardest during the pandemic and are also seeing an increase in holiday volume,” it added.
Though UPS declined to share the actual or projected volume it has seen, FedEx said it projects that peak shipping volumes will be up 22 percent from the same time last year. To meet this demand, the logistics giant said in September that it planned to add more than 70,000 positions in the lead up to this year’s holiday, with the majority of those within the FedEx Ground network.
“With more than 500,000 dedicated team members, the strength and reach of our global network, and a significant investment in our facilities and fleet, we are well-positioned to meet the Peak demand and look forward to helping deliver the holidays for our customers around the world in a challenging environment,” FedEx told Sourcing Journal. “And while FedEx is known for its speed and reliability, we encourage our customers not to wait until the last moment to ship their holiday gifts to friends and family, and to shop and ship early this year.”