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Carriers Must Deliver 2B Packages In Short Holiday Season

Tags: new revenue
DATE POSTED:December 2, 2019

Due to a shorter holiday season, delivery companies like Amazon, UPS and FedEx are facing pressure to get packages to customers in a shorter time frame, according to a report by The Wall Street Journal.

The holiday season this year has six fewer days, because Thanksgiving fell on Nov. 28, the latest day possible for the fourth Thursday of the year. That means there were only 26 days until Christmas and 23 days until Hanukkah in which UPS and FedEx must deliver two billion packages.

The delivery window has not been so protracted since 2013, and back then, eCommerce spending wasn’t nearly as popular as it is today. According to the Commerce Department, eCommerce is 50 percent more popular now than it was at that time.

In Q4 of 2013, Amazon had revenue of $26 billion. The projection for this year is $80 billion in Q4, and the company has pledged to offer one-day shipping for thousands of items on its site.

Citi Analyst Christian Wetherbee said the promises of prompt deliveries means things must be executed practically flawlessly. “We think the set up for the parcel carriers is as tricky as we’ve ever encountered,” Wetherbee said. “The risk [of] someone [getting] coal in their stocking seems elevated.”

Many of the logistics providers say they are prepared for the shorter season and that they have advanced far beyond the capabilities of 2013. They also point to new sorting facilities and advanced technologies to speed up processes, as well as closer relationships with retailers.

UPS has especially worked hard to expand and modernize, with six new sorting centers built in the last two years. The company has added 23 aircraft to its arsenal and now delivers packages on the weekend.

FedEx said it expects to move a record 33 million parcels on Cyber Monday, adding that volume on the next two Mondays will likely be double what the company moves on a regular weekday. The company recently cut ties with Amazon, and some of those deliveries will have to be absorbed by UPS.

Tags: new revenue