UPS, Overwhelmed by Online Orders, Warns of Some Delivery Delays
December 05 2017 - 1:24PM
Dow Jones News
By Paul Ziobro
United Parcel Service Inc. said it is taking longer than
expected to deliver some packages because of an "unprecedented"
surge in online orders.
UPS is adding one or two days in transit time on an unspecified
number of deliveries following record sales around Cyber Monday,
spokesman Steve Gaut said Tuesday. "We have shifted more employees
and other resources to these markets to address this cyber week
surge and expect to have the issue resolved by midweek, this week,"
Mr. Gaut said.
The delays show that delivery networks such as UPS, which are
critical components of the e-commerce boom, are still struggling to
cope with the busiest shopping periods despite heavy investment to
build out and automate their operations and capacity.
The week after Thanksgiving is the start of the delivery crunch,
as carriers begin to process online orders placed during the
holiday weekend and millions more packages pour in, starting the
following Monday. Adobe estimated that Cyber Monday sales hit $6.6
billion this year, up more than 17% from 2016.
ShipMatrix, a software provider that analyzes shipping data,
said last week that 89.2% of parcels shipped through UPS Express
were delivered on the day they were promised. The worst on-time
service hit packages that UPS picked up on Monday and Tuesday of
last week.
By comparison, 99.4% of FedEx express packages arrived on by the
end of the day they were scheduled to arrive.
Mr. Gaut said UPS doesn't comment on the accuracy of third-party
data.
UPS, based in Atlanta, has notified workers at more than 100
package-delivery centers where demand is highest that it may raise
the number of hours drivers work to 70 hours over an eight-day
period, up from 60 over seven days. Union leadership, which
represents UPS drivers, has objected to the move in areas like
Boston, saying that the longer hours put package-delivery drivers
at risk and keep them away from their families during the
holidays.
In a letter to UPS Chief Executive David Abney, Teamsters
President James P. Hoffa said: "I fail to understand how the
Company neglected to take the steps necessary to ensure that it had
a sufficient number of trained workers available to meet the demand
generated by the digital economy." The Teamsters represent more
than 250,000 UPS workers and are currently engaged in contract
talks.
UPS said the change complies with federal requirements and that
workers are paid time-and-a-half for over eight hours a day.
UPS expects that the "vast majority" of the 750 million packages
that UPS ships between Thanksgiving and Christmas will be delivered
on time, Mr. Gaut said. During that period, the company estimates
that daily delivery volume will top 30 million packages on 17 of
the 21 days orders are delivered.
"UPS customers can be confident that UPS is taking the necessary
steps to ensure the network operates with its customary dependable
performance throughout the holiday season," he said.
UPS tried to smooth out the volume of orders it delivers this
season by adding new surcharges to packages delivered during the
busiest weeks, which prompted some retailers to offer slower
shipping times or use other carriers.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
December 05, 2017 13:09 ET (18:09 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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