How UPS and FedEx are hiding Christmas shipping delays
The US Postal Service has been receiving the brunt of complaints from sellers and shoppers about late shipments during this holiday season. The combination of COVID related health and safety protocols along with more consumers doing their holiday gift shopping online for the same reason has burdened all logistics operators. Yet, USPS is receiving more negative press than UPS or FedEx, and is this a fair comparison?
But what is now coming to light is that the anticipated volume requirements by some of the largest shippers of UPS and FedEx may have been greatly underestimated. This is causing UPS and FedEx to throttle pickups to avoid overloading their logistics networks with more packages than they can handle.
The first signs of this appeared after the Black Friday weekend when UPS told a number of major customers it wouldn’t be picking up packages for a few days until it had reestablished sufficient capacity to handle them.
At the time, this appeared to be a one-off situation. But a new report by the Wall Street Journal suggests this is an on-going issue and also includes FedEx. WSJ cited Richard Galanti, Costco’s CFO, who told The Journal that on some days UPS and FedEx aren’t picking up all the packages the company has ready to pick up, which is causing delays.
In another example, the WSJ mentioned goTRG, a company that processes returns for major retailers and sells products through channels such as eBay, Amazon, and Walmart. Earlier this month, for several days the company processed over 2,500 orders per day before being told by FedEx that it would limit pickups to 200 packages a day.