Logistics business: UPS takes a pass on predicting 'Peak Day' volumes for Holiday Shipping season
Jeff Berman, Group News Editor -- Logistics Management, 11/17/2008
Editor’s note: This story originally appeared on November 17 and has been updated with additional reporting.
ATLANTA—In yet another sign that the economic slowdown is hindering the flow of commerce at a time of year when consumers are typically gearing up for holiday gift purchases, media reports indicated yesterday that UPS will not forecast its peak day for holiday shipping this year.
But in a statement issued today, UPS said it expects Thursday, December 18 to be its busiest day of the year, with Monday, December 22 projected to be its busiest day for handling air packages. Unlike past years, the company did not provide specific volume projections for these days.
In a Bloomberg report published yesterday, UPS spokesman Norman Black said the main reason the company would initially not predict peak volume days is that current economic conditions make a prediction too difficult this year.
Making a prediction for its peak holiday shipping day has typically been an annual tradition for UPS. Last year, it predicted that Wednesday, December 19 would be its “Peak Day,” delivering 250 packages per second through its global air and ground network with more than 22 million packages, with Friday December 21, 2007 also being predicted as its heaviest day for air express packages at 5.6 million air packages, which is two and a half times its typical daily air volume.
A Dow Jones report stated that in 2007 UPS said it would add 60,000 additional staffers to handle extra holiday-season business, but the company is not releasing figures this year on how much additional staff it may need in what “many retailers expect to be one of the weakest holiday-sales seasons [in] 20 years.”
UPS was scheduled to host a Peak Season Online News Conference on Tuesday, November 18 to discuss its holiday Peak Season plans, but it issued a media advisory today saying it has been cancelled. One of the topics that was to be covered included tips on how businesses and consumers can help ease holiday stress by providing packing and shipping tips, deadlines, and other information.
This news is reflective of the current economic malaise caused by a variety of factors, including the Wall Street crisis, the credit crunch, high gas prices earlier in the year, and retail sales down 2.8 percent in October and consumer spending figures also largely down.
“In normal times, UPS surveys its medium-sized and large customers that have Peak Seasons…for retail sales and direct-to-consumer shipments,” said Doug Caldwell, executive vice president of ParcelPool, a small parcel consultancy and services provider. “Most of the shippers and retailers they went to had reasonably accurate projections, in terms of how many catalogs they sent out and what the response rates were. But this year I don’t think anybody knows what kind of business they will be doing during the Holiday Season this year. Retailers may have some sort of idea, but it is too hard to predict what the environment will be like.”
This theme was accentuated by BestBuy’s announcement last week to cut its sales forecast, due to “rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," noted Best Buy Vice Chairman and CEO Brad Anderson said in a statement. Similar forecasts have been echoed by myriad other retailers in various industries.
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