Nation & World

Online shopping could lead to delivery delays

Retailers, carriers preparing for online holiday surge

Carriers such as FedEx and UPS are ramping up their holiday hiring while asking store clients to move their shipping vol
Carriers such as FedEx and UPS are ramping up their holiday hiring while asking store clients to move their shipping volume on lighter days in their network. (Associated Press)

Retailers and carriers are preparing for an online holiday shopping surge that could tax shipping networks and lead to delivery delays.

FedEx and UPS are ramping up their holiday hiring while expanding their weekend operations and asking retailers to use their shipping network when there is more slack.

And stores are pushing shoppers to buy early and are expanding services such as curbside pickup to minimize the need for delivery.

For the last few years, many retailers had been using their own physical stores, in addition to their distribution centers, to fulfill online orders.

But now they are designating some of those stores to handle even higher volumes.

Best Buy, for example, converted space in 250 of its 1,000 stores this fall to manage online orders.

The moves come as most of the carriers have been at full shipping capacity for months as shoppers shifted their buying online during the pandemic.

“We are warmed up for what we’re calling the ship-a-thon,” said Brie Carere, chief marketing and communications officer at FedEx.

“Like everything else in 2020, this is going to be an unprecedented peak season. We’ve actually seen three years of growth in e-commerce pulled forward.

“So we are expecting a ton of volume.”

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Carole B. Tome, CEO of UPS, told analysts last month she expects “a pretty peaky peak.”

Amazon.com, which has been growing its own delivery network so it doesn’t have to rely as much on UPS and the U.S. Postal Service, is nonetheless warning shoppers not to wait until the last minute to buy gifts.

While the world’s largest online retailer delivers more than half its packages itself, it still relies on other carriers to get orders to shoppers.

“It’s going to be tight for everyone and we will all be stretched,” said Brian Olsavsky, Amazon’s chief financial officer.

“And it’s advantageous to the customer, and probably the companies, for people to order early this year.”

Satish Jindel, the president of ShipMatrix, which analyzes shipping package data, predicts 7 million packages a day could face delays from Thanksgiving to Christmas.

That’s because he’s expecting a total shipping capacity for the industry to be 79.1 million parcels a day during the 34-day period — with 86.3 million packages looking for space.

Last year, total capacity was 65.3 million packages with demand at 67.9 million packages a day.

Right now, Jindel is predicting delivery delays of one or two days for parcels.

Adobe Analytics, which measures sales at 80 of the top 100 U.S. online retailers, predicts a total of $189 billion in online holiday sales — a 33 percent increase compared to last year.

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That’s equal to two years worth of holiday e-commerce sales growth shoved into one season.

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