Online shoppers are going to be even busier this year as they
take to the web to buy holiday gifts, FedEx Corp. predicted
Wednesday.
And that means more packages to deliver. The company expects
another record holiday season, with a nearly 9% increase to 290
million packages shipped between Black Friday and Christmas Eve.
FedEx said it has invested billions of dollars to expand over the
past few years to meet the demand.
The company's busiest day will be Dec. 15, when the company
expects to ship 22.6 million packages. That is more than double an
average day for the company of more than 10 million packages.
Last year, delivery companies faced a tough winter, combined
with an unexpected last-minute surge in online orders.
An estimated 2 million express packages failed to make it on
time last Christmas Eve, according to data from Shipmatrix Inc.
About 630,000 of those were shipped by FedEx, the shipping tracking
software developer estimates.
"There were some late surges based on retailer and e-tailer
promotions that caused some surges beyond what we expected going
in," says Patrick Fitzgerald, senior vice president of marketing
and communications for FedEx. Even with the weather problems, "We
were largely able to meet that demand."
The company also turned away some package volume that exceeded
projections from retailers last year, something that helped it
avoid the worst of the shipping delays. It could do so again this
year, the company has said.
But FedEx is confident it has invested enough in its network for
a smooth holiday season and to meet its customers' demands. Over
the past five years, FedEx Ground has invested about $2.5 billion
in expanding capacity through about 250 major projects. FedEx
Ground is investing 90% of its $1.2 billion in total capital
spending this year to expand capacity. FedEx is hiring 50,000
seasonal workers, an increase of 25%. The company already runs
seven-day operations during peak times, including on Black
Friday.
It has also spent on technology, including a new reporting
system for FedEx Express dubbed Radar, which allows the company to
have more visibility into shipments that are coming in.
Each Monday during this year's holiday period will surpass 20
million packages--the same as last year, when the company saw a
record of more than 22 million packages shipped Dec. 16. Last year
FedEx predicted Cyber Monday would be its busiest day, but changing
shipping patterns moved it later in the holiday season, Mr.
Fitzgerald said.
Holiday shipping trends are evolving, he said. "But the overall
expectation and the increases that we see .. we're very confident
of what's coming," he adds.
Rival United Parcel Service Inc. hasn't yet reported how many
packages it expects to ship over the holiday season, but the
delivery giant has said it is spending about $500 million to
prepare for the holiday season and hiring about 90,000 seasonal
workers.
Write to Laura Stevens at laura.stevens@wsj.com
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