By Paul Ziobro and Sarah Nassauer
FedEx Corp. and United Parcel Service Inc. have largely kept up
with the record onslaught of packages since Thanksgiving, though
that is in part because of efforts to lighten their loads.
Rather than risk having their systems clogged with packages,
both FedEx and UPS are holding a harder line by enforcing a preset
limit on the daily number of packages they will pick up. The policy
is creating backlogs in some of the shippers' warehouses, affecting
retailers as large as Costco Wholesale Corp. down to small- and
medium-size companies.
Richard Galanti, Costco's finance chief, said that some days UPS
and FedEx aren't picking up all the packages the retailer wants to
ship, which is causing delays. "We, like others, are figuring out
other things to do, not on a big scale," he said. Costco recently
started using Instacart to ship items like Apple Inc. AirPods and
Instant Pots for same-day delivery, instead of just offering
grocery items through that service.
One order placed with Costco on Black Friday, for instance,
showed it being prepared for shipment the next day, according to
tracking data reviewed by The Wall Street Journal. However, it
didn't reach a UPS facility for 13 days as it sat in limbo in
California. The order was scheduled to reach its destination in New
York three days later, within the shipping time frame provided by
UPS but 18 days from when it was ordered.
Mr. Galanti said that while there are some delays, Costco
delivers within the time frame promised on its website around 90%
of the time.
A UPS spokesman said that the carrier "is picking up and
delivering planned volume" and that its on-time performance has led
the industry since the beginning of October. "We are adhering
closely to collaborative plans we have mutually agreed upon with
our customers, and we always strive to provide reliable service,"
he said.
Examples like the Black Friday order show that even though
packages take longer to arrive, FedEx and UPS can tout delivery
scores that are better than a year ago despite record high package
volumes and other challenges related to the pandemic, such as
worker illness.
"While this may help the carriers maintain service standards, it
leaves retailers frustrated as they've scrambled to seek out
delivery alternatives," said Trevor Outman, co-chief executive of
shipping consulting firm Shipware LLC.
For the two weeks between Nov. 22 and Dec. 5, on-time scores
were 94.9% for FedEx, 96.3% for UPS and 92.8% for the U.S. Postal
Service, according to ShipMatrix, a software provider that analyzes
shipping data. All were better than last year during a comparable
period including Black Friday and Cyber Monday.
ShipMatrix President Satish Jindel said that 2.5 million
packages will take an extra day or two to be delivered, and advised
shoppers to order items by Dec. 15 to receive them by Christmas
without having to pay higher shipping charges. Some retailers are
also warning shoppers of delivery delays and to order by that date,
or earlier, to ensure arrival by Christmas.
FedEx and UPS, in addition to network upgrades and hiring tens
of thousands of workers, have spent months planning with their
large customers on shipping forecasts and the carriers have
allotted companies certain amounts of packages by the day or week.
If shippers exceed that amount, the carriers pause pickups until
the network has the ability to take on more.
"In years past, the carriers would take every single package
available to them and hope like heck that they could put them
through their system, " said James Thibault, who spent 30 years at
UPS before joining Intelligent Audit, a freight audit and analytics
company. "This year is a marked change."
Target Corp. is shipping the "vast majority" of packages within
the delivery windows shoppers see when they order and promised
shipping times are in line with prior holiday seasons, said a
spokeswoman. In a small number of cases, the retailer is lightening
the load on carriers by making some items available only for
same-day delivery or pickup, which use other delivery methods, she
said. Target hasn't set a blanket cutoff date for packages to
arrive by Christmas, instead showing ship-by dates for each item
online, she said.
Several large retailers, including Gap Inc. and Macy's Inc.,
faced temporary restrictions on shipping volumes shortly after
Thanksgiving. Other shippers say they were cut off with little
notice.
Deliveries poured into goTRG by the thousands in the days after
Thanksgiving. The company, owned by the Recon Group LLP, processes
returns for major retailers and then resells electronics, sporting
goods and other items through various websites, including
Walmart.com, eBay and Amazon.com.
Orders averaged 2,500 a day at four of its warehouses until
FedEx hit the brakes. The carrier on Dec. 2 told the company that
it would only pick up 200 orders a day until further notice.
"We were never told in advance" of shipping limits, said David
Malka, goTRG's chief sales officer. "We were told after the
fact."
The boxes piled up on the company's loading dock. At one
Kentucky warehouse, goTRG has stopped shipping with FedEx and is
considering relabeling some of thousands of packages waiting to be
shipped with other carriers.
A FedEx spokesman said the company had been working with
customers to understand the expected shipping volume but that, in
some cases, volume is significantly higher than projections. "We
know how important it is to our customers that their packages are
delivered on time, and we remain committed to work with them on
ways to leverage our network flexibility," the spokesman said.
Wally Nowinski, chief marketing officer for Collage.com Inc.,
which makes custom-printed products, said UPS twice in recent weeks
skipped pickups for its Mail Innovations service, a lower-cost
shipping option that uses the Postal Service for last-mile
deliveries. The skipped pickups left 50 pallets of items on its
loading dock and stretched delivery times for customers.
"We work really hard to keep the manufacturing part as tight as
possible so it's not something we did that makes the package take
longer," Mr. Nowinski said. "But we're the ones dealing with
disappointed customers."
The Postal Service acknowledged Monday that record high shipping
volumes, employee shortages due to the coronavirus and not enough
room on airplanes and trucks have led to some temporary delays, and
encouraged everyone to mail their packages early.
Write to Paul Ziobro at Paul.Ziobro@wsj.com and Sarah Nassauer
at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
December 15, 2020 05:44 ET (10:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
United Parcel Service (NYSE:UPS)
Graphique Historique de l'Action
De Août 2024 à Sept 2024
United Parcel Service (NYSE:UPS)
Graphique Historique de l'Action
De Sept 2023 à Sept 2024