Parcel shipping: UPS expects peak volume on December 21
Jeff Berman, Group News Editor -- Logistics Management, 11/17/2009
ATLANTA-Following the lead of its biggest competitor, FedEx, UPS this week announced its holiday season projections for package volume.
The company said it expects December 21 to be its busiest day of the year, anticipating it will deliver approximately 22 million packages worldwide, which is 40 percent more than normal daily deliveries. The company did not make a similar prediction last year, due to economic conditions, but it typically has going back the last several years.
And for the entire holiday season from Thanksgiving to Christmas, UPS expects to deliver approximately 400 million packages, which it said is slightly up compared to the same timeframe for 2008. UPS added that it expects to hire about 50,000 seasonal workers to support this volume increase.
A recent Wall Street Journal report noted an expected growth in online retailing is likely to occur during the 2009 holiday season, which matches up with a Morgan Stanley report that indicates e-commerce will grow from a 4 percent market share today to 6 percent or more by 2012 and a Forrester Research report, which calls for an 8 percent increase in e-commerce activity during the holiday season.
UPS Spokeswoman Karen Cole told LM that UPS works with 21 of the 25 largest e-tailers in the world, and added that UPS is hearing "bullish" feedback from them regarding holiday season, more so than bricks and mortars companies.
"There are also things like comparison shopping online, coupons, and free shipping that attracts consumers to e-commerce," said Cole. "That is a potential driver for strong online sales this year, and we are prepared for that."
According to a parcel industry executive, UPS and FedEx take measured steps to determine what type of volume they expect for the holiday season. This planning, he said, begins in August by determining the appropriate number of staffing levels to handle the uptick in pick up and delivery volumes.
"Last year was an anomaly for UPS," said the executive, "as it was a volatile, changing market in freefall...and shippers were telling carriers they did not know what to expect in terms of volumes. That is not the case this year, as online business is growing and allowing UPS and FedEx to be more comfortable with their assessments this year."
Last week, FedEx announced that it expects to move more than 50 million packages through its global FedEx Express, FedEx Ground, and FedEx Freight networks, during the week of December 14, which it said is the company's busiest week of the year.
FedEx officials said that on December 14 the company expects to ship more than 13 million shipments, which would outpace the busiest day of 2008-December 15-which hit 12 million packages, roughly an eight percent difference. FedEx ships, on average, more than 7.5 million packages through its system on a daily basis.
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