How on-time were Fedex, UPS and Postal Service?
Deliveries were around 90%, says Shipmatrix
During the holidays, Fedex’s and UPS’ on-time delivery rates didn’t falter from the year before despite handling unprecedented package volumes, new data shows.
The two delivery giants and the U.S. Postal Service posted on-time delivery percentages in the 90s for four weeklong periods from Nov. 22 to Dec. 26, save for one difficult week for the Postal Service, according to data from Shipmatrix.
These delivery giants, along with Amazon Logistics and smaller regional carriers, delivered a record 3 billion parcels throughout the peak holiday shipping season, the shipping data firm said in a news release Tuesday.
Online orders delivered to homes have surged during the COVID-19 pandemic in place of brickand-mortar retail traffic, which made the alwaysbusy peak holiday shipping season even busier in 2020.
Package volumes were especially elevated during the “Cyber Five” period between Thanksgiving and online shopping holiday Cyber Monday. ShipMatrix President Satish Jindel said in a statement that Fedex and UPS were still able to deliver a higher percentage of packages on time compared to 2019.
“It is noteworthy that in spite the demand ex
ceeding capacity by millions of parcels per day, the Cyber Five peak period performance was as follows: 95.1% for Fedex, 96.7% for UPS and 93.2% for USPS,” he said. “It compares favorably with 2019 peak period performance for Fedex at 94.6% and UPS at 96.6% but a drop from 93.9% for the Postal Service.”
Shipmatrix says its data tracking delays “is based on millions of actual parcels shipped from over 100,000 shipping locations across the country.”
On-time performance improved for all three carriers from Dec. 20-26 — Fedex and UPS posted a 96.5% and a 97.6%, respectively — but more than 2 million parcels were still not delivered by Christmas Day, per Shipmatrix.
“Fedex experienced an unprecedented peak season due to the exponential growth of e-commerce, underscored by the COVID-19 pandemic,” Fedex said in a statement. “We are extremely proud of the extraordinary efforts of our nearly 600,000 team members who worked tirelessly to safely deliver the best possible service this holiday season in a challenging environment.”
Capacity crunch slows Postal Service
The surge in package volume has tightened the available space Fedex and UPS have in their networks for deliveries.
With limited capacity, both companies have the leverage to turn away customers that exceed their forecasted volume levels, John Haber, CEO of transportation spend consultancy Spend Management Experts, said previously.
This leads to more volume for the U.S. Postal Service.
From Dec. 6-12, it delivered 87.5% of parcels without a delay of one or more days compared to the year before, according to Shipmatrix. Shipmatrix said the Postal Service was handling additional parcels due to Fedex and UPS placing restrictions on high-volume customers.
The Postal Service declined to comment on the data, but it said it “delivered a record amount of packages this holiday season in the midst of the pandemic which significantly impacted our workforce availability.”
“Capacity challenges with airlifts and trucking for moving this historic volume of mail also led to temporary delays,” it said in a statement. “These challenges were felt by shippers across the board. We are accepting all volumes being presented to us, which adds to the challenge of the workload.”
Forecasts tested Fedex, UPS customers
In previous years, Fedex and UPS typically charged customers extra if they went above peak season volume forecasts, said Cathy Roberson, Logistics Trends and Insights founder.
But capacity was limited during the 2020 holiday season. The two carriers “really held their retail customers to the fire on those forecasts,” leading to instances of volume caps for those who went beyond their projections, she said.
“This year, how could one really forecast two months in advance?” Roberson said. “From a retailer’s perspective, I think that was really difficult to do in the first place.”
Larger retailers invested in data analytics and selling products “with fairly consistent demand” are in a better position than others to provide accurate volume forecasts, said Jie Zhang, professor of marketing and Harvey Sanders Fellow of Retail Management at the University of Maryland.
In a December earnings call, Chief
Marketing Officer Brie Carere said amid industry capacity constraints, Fedex has “worked with our customers to develop innovative solutions to meet their capacity needs this peak.”
She added that Fedex has a peak capacity strategy requiring its customers to distribute their volumes more equally throughout the week, with the incentive being to use capacity available during the less-busy weekends “or you lose the capacity.”
UPS said in a statement about the data that it has “delivered one of the best peak seasons ever for our customers” due to “close coordination between UPS and our customers, strong commitment and dedication from Upsers, and extensive preparation supported by technology and capacity alignment throughout our network.”
Prior to the peak season, Fedex executives noted the Memphis-based company had made several pre-pandemic investments at Fedex Ground to better handle the holiday shipping surge, such as year-round, seven-day delivery and increasing capacity at its facilities.
Max Garland covers Fedex, logistics and health care for The Commercial Appeal. Reach him at max.garland@commercialappeal.com or 901-529-2651 and on Twitter @Maxgarlandtypes.