UPS releases holiday season delivery forecast

On UPS’s third quarter earnings call last week, the Atlanta-based transportation and logistics bellwether said that it expects December shipments to be up 11 percent annually.

Today the company offered up more specifics regarding its holiday delivery outlook.

The 11 percent forecasted shipment increase represents anticipated volume of more than 585 million December packages, with Monday, December 22 pegged as its peak delivery day, as the company expects to deliver more than 34 million packages that day. What’s more, UPS expects to see six days in December top last year’s peak shipment day delivery record of 31 million packages, and taking that a step further, on a typical day, UPS said it delivers about 17 million packages. December 17 is expected to be the company’s busiest tracking day with more than 117 million tracking requests.

“Major retailers have chosen UPS to deliver strong e-commerce growth during 2014, as consumer acceptance for online purchases continues to grow steadily,” said Alan Gershenhorn, UPS executive vice president and chief commercial officer, in a statement. “The holiday season is a major retail sales opportunity for our customers, and we have worked closely with many of our shippers to plan delivery volumes. Our objective is to ensure that all of our year-round business and retail shippers can take maximum advantage of expanded UPS capacity during this important period.”

The company noted that there are two more operational days during the 2014 holiday delivery period, with added from the calendar and the second, Black Friday November 28, having been added as a full operating day.

Gershenhorn said UPS expects the combination of additional operating days and expanded capacity to help “smooth out” expected record volumes, adding that the company has close to 50 additional sorting shifts throughout the U.S. in its hubs and delivery centers to provide the increased processing capacity and flexibility to handle more packages.”

In terms of extra staffing for the holidays, UPS said in September that it plans to hire between 90,000-to-95,000 seasonal employees, which tops last year’s 85,000. UPS said that these seasonal hires are brought on to support “the anticipated holiday surge” for package deliveries commencing in October and running through January.

These seasonal staffers will be crucial for UPS to handle its expected increase in package deliveries, with the company prepping to aid retail shippers be fully equipped to meet their customers’ needs during the holiday season. Positions they will occupy include package sorters, loaders, delivery helpers, and drivers.

As previously reported, UPS said earlier this year plans to up the ante for 2014 operating expense for capacity and peak-related projects to $175 million, with some of this capital allocated for things like expanded operations on the day after Thanksgiving, accelerated deployment of route optimization software (ORION), IT development, additional hub sorts and temporary capacity.

“One frequent topic of discussion has been our preparation for peak season. We’ve had meaningful conversations with customers about our plans,” said UPS CEO David Abney. “These discussions provide the foundation for a joint commitment of forecast volume enabling UPS to better manage how large accounts impact our network. We have made changes to UPS technology that will improve communication with customers. Solutions have been implemented to provide better information on package location and shipment status, ultimately benefitting customers and UPS.”

This forward-looking approach is both smart and needed, given how many supply chain networks, not just UPS’s, dealt with myriad delays and service disruptions during Peak Season in 2013, and are not determined to go down that road again in 2014. And while there were delays and some people did not get their items in time for the holidays, industry estimates suggest it was a relatively modest amount of volume that got lost in the shuffle.