UPS Struggles to Keep Up With Surge in Web Orders
11 Décembre 2015 - 2:39AM
Dow Jones News
By Laura Stevens
United Parcel Service Inc. is straining to handle a surge in
online sales that has resulted in more holiday volume than it had
expected, causing a wave of disruptions that could spell trouble
for the holiday season.
On-time delivery rates for UPS ground packages based on their
normal shipping transit times last week fell to 91%, according to
an analysis of millions of packages by software developer
ShipMatrix Inc. During the same week last year, the on-time rate
was 97%, which is UPS's usual average during nonpeak months. FedEx
Corp.'s early numbers were also lower than usual at an estimated
95%.
UPS has been slammed with unexpectedly high volumes, extra
pickups and not enough staff and equipment to handle all of the
packages in some locations, according to people familiar with the
matter.
"Volumes are coming in much higher than planned," said John
Haber, CEO of Spend Management Experts, who advises retailers on
shipping matters. "You can only process so much volume so
quickly."
UPS this week assigned managers from corporate headquarters in
Atlanta and elsewhere to work at delivery centers in Austin, Texas,
Latham, N.Y., and other locations to handle the additional
packages.
A UPS spokesman said that "UPS did experience some high impact
areas" driven by volume in some places that came in at "levels
greater than the original peak plan for those locations." He added
that it is typical that retailers may have more volume than they
expected, and UPS sends management teams each year to those sites
affected.
Online sales surged more than expected over the Thanksgiving
holiday weekend and into last week. Consumers spent an estimated
$4.45 billion online on Thanksgiving and Black Friday, with Black
Friday sales rising 14% from a year ago, according to Adobe Systems
Inc., which tracks purchases across 4,500 U.S. sites. It estimated
that more than half of Black Friday shopping came from mobile
devices.
Most of the problems surfacing so far involve UPS, which does
more residential deliveries than FedEx and has been trying to
contain costs. It is unclear how much difficulty FedEx and the U.S.
Postal Service are having handling the loads. All combined, the
three carriers have been expecting to ship more than 1.5 billion
packages over the holidays, an increase of more than 10%.
FedEx said that a record number of holiday shipments fueled by
e-commerce are flowing through the company's network, and that its
employees are delivering "outstanding service" to its customers.
The U.S. Postal Service said it has invested in its infrastructure,
expanded delivery times and is delivering on Sunday to keep
packages moving.
UPS and FedEx are trying to a avoid a repeat of 2013, when their
systems were so overloaded at the last minute that they couldn't
deliver everything on time. But they also are wary of overdoing it
like UPS did last year when it overspent and over-hired
commensurate to the volume.
Both years, UPS ran over cost estimates by $200 million. This
year it has increased capacity by 6% by modernizing its hubs among
other things, and it has planned to keep seasonal hiring to the
same levels as last year and bring on extra workers as needed, as
well as reducing Black Friday operations.
Not all shipping consultants reported problems with UPS. While
Spend Management Experts, retail consultant Kurt Salmon and package
auditing firm Intelligent Audit reported that their customers are
experiencing significantly greater than average service disruptions
when shipping with UPS over the past two weeks, Shipware LLC said
its customers have experienced on-time UPS delivery rates of more
than 97%, while FedEx was at 96%.
Andrew Barrall, an Albany, N.Y., resident, ordered two
garage-door openers from Home Depot Inc. on Thanksgiving, and was
still waiting for one that was finally delivered by a UPS employee
who identified himself as a manager on Tuesday, Mr. Barrall said.
It was "delivered at 8:30 p.m. in a rented truck--one week after
arriving at the delivery facility 5 miles from my house," he added.
Drivers were out on Sunday, too, he said.
UPS also quietly changed the length of time it takes to deliver
some packages this holiday season, sparking consumer unhappiness,
said Satish Jindel, president of ShipMatrix.
UPS put a small notice in its customer magazine that it would
extend the time it would take to deliver a "limited" number of
ground packages with transit times of three days or more by one day
between Nov. 23 and Dec. 30.
Write to Laura Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
December 10, 2015 20:24 ET (01:24 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
United Parcel Service (NYSE:UPS)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
United Parcel Service (NYSE:UPS)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024