Holiday deliveries show continued forward progress

With the 2015 holiday season now officially history, it is time to take a look at how holiday deliveries went.

One thing that is abundantly clear is that home delivery activity, which continues to grow in terms of volume and demand, is never really out of season, given consumers’ ever-growing appetite and desire for goods to be delivered to their doorsteps….now.

In the interest of full disclosure, I order plenty of things online, especially during the holiday season, but I am pretty patient as I endeavor to place my online orders by December 15 at the latest to ensure that I am receiving what I ordered in advance of December 25. But not all people share that strategy to be sure and that is often where trouble and angst arrives among both consumers and express delivery providers.

The thing is, though, that the tension appears to be subsiding somewhat, especially when one compares what happened in 2013 to this past holiday season of 2015, which just concluded.

Taking a quick look back at the 2013 holiday season, it is fair to say there were various factors in play that impacted deliveries. And the missed deliveries and package delays from the 2013 holiday season resulted in the parcel duopoly of UPS and FedEx as well as the United States Postal Service (USPS) caught in the cross-fire, with these unprecedented events happening for various reasons, including: fewer shopping and delivery days due to the calendar, the winter weather, and marketing promotions and retailers offering too close to Christmas delivery promises pushing the limits of a stressed and challenged system.

But sill the majority of packages got where they needed to go, but the late and missed ones were in the spotlight, with shippers––retailers and e-tailers–– placing blame on both UPS and FedEx, coupled with these shippers overcommitting on delivery times outside of what was actually promised by the carriers.

A year later in 2014, the carriers learned from the previous year and like a good football team read and reacted to the situation to not get burned again.

One way they improved things was by hiring more seasonal staffers, with FedEx adding more than 50,000 staffers in 2014 and 55,000 in 2015, and UPS adding 90,000 in 2014 and around the same in 2015. Along with upping staffing levels, both companies were stringent in staying in constant communication with shippers in regards to their service expectations and actual order forecasts.

While these are wise decisions to make, the fact remains that it is becoming increasingly difficult for both parcel carriers to predict and plan for the year-end volume increase,” according to Rob Martinez, president & CEO, Shipware LLC, a San Diego-based parcel consultancy
 
“Not only does unpredictable weather make year-end planning difficult for the parcel carriers but a sharp increase in online shopping adds to the complexity for the carriers to properly predict and prepare for peak season,” he said. “Online shopping, for the first time outpaced brick-and-mortar sales on Black Friday this year.  Marketing tactics such as last minute online specials used by many eRetailers challenge the parcel carriers to have their assets properly allocated as to ensure that the spike in orders can be fulfilled; or picked up and inducted in to their delivery network.”

Even with these annual challenges, Shipware data points to 2015 being a strong year for holiday deliveries for both UPS and FedEx.

Adjusted on-time delivery performance, which adjusts for the carriers’ exclusions for weather and other service exceptions beyond their control, has inched up for each company from 2013 to 2015. During that period, UPS’s has risen from 90.65% to 95.50% to 96.10%. And for FedEx it has gone from 88.70% to 93.28% to 94.56%.

These numbers speak volumes as to the efforts the companies put into learning lessons from the past and it shows.

Hempstead Consulting President Jerry Hempstead told me 2015 holiday shipping was the smoothest it has ever been, with several things coming into play.

“There is the manipulation of the promised delivery dates for some of the services offered, where the carrier moved up by a day, the date upon which one must tender to insure delivery by Christmas,” he said. “If you go back to root causes in prior years, in particular Christmas of 2013, the issue was ice and snow and below freezing weather. Bad weather hampers the transit of line hauls to, from and between hubs, by both air and ground. Shippers also need to understand that the service guarantees are suspended during peak, so don’t expect big refunds for service failures during what may be the busiest time of your year. This years story, in my opinion, is not service, but volumes that were far in excess of the forecasts most e-tailers provided to the carriers, and therefore where any blame should reside.”

When it comes to e-commerce deliveries during the holiday season, it is clear things are continuing to both evolve and improve. And best practices continue to expand and be implemented over time, with forward progress being made each year, with the e-commerce supply chain and related deliveries continuing to develop and improve in order for all of us desktop, tablet and smartphone shoppers to be able to get our holiday gifts delivered on time.