Shipping Companies Expect Holiday Package Volume to Skyrocket
Delivery companies are preparing for a barrage of delivery requests by adding new jobs and warning customers of deadlines as retail holiday sales begin.
Holiday shopping sales are expected to skyrocket to more than $655 billion through December, forcing shipping companies to deliver more packages than ever before.
The increase in online sales — coupled with Thanksgiving and Black Friday falling earlier in the month — has created a demand for more reliable and expedited delivery practices. Shipping companies have warned customers to be aware of delivery deadlines, or their packages won’t make it to their destination in time for the holidays.
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More than 95% of the products bought online or via mobile in the United States are shipped by FedEx, UPS or the U.S. Postal Service. These three services combined will deliver more than a billion packages.
FedEx Corp. ranks No. 2 and UPS Inc. ranks No. 1 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
The increase in both shopping and delivery can be attributed to many factors, said Serdar Durmusoglu, associate professor of marketing at the University of Dayton. For one, Thanksgiving is earlier in the month — Nov. 24 — than it has been since 2012, when it landed on Nov. 22. It gives stores a few extra days of holiday shopping and shipping before Christmas.
“Retailers are a little more comfortable, I suspect,” Durmusoglu told the Dayton Daily News.
Black Friday sales have started as early as Nov. 1 this year, and late web shopping on Dec. 22 and 23 have increased up to 32%, according to FedEx. This has given shipping companies a steady flow of business that’s started earlier than years before.
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The demand for delivery means more jobs for several of these companies. UPS plans to employ more than 95,000 seasonal workers, including delivery drivers, loaders and package sorters.
“In addition to investing in temporary seasonal processing facilities, UPS is implementing new technology and automation systems to increase capacity, efficiency and flexibility within the operations,” said Kate Gutmann, senior vice president of UPS sales and solutions.
FedEx is adding more than 50,000 positions leading up to the peak season and has added 30 new aircraft since last year. The Postal Service also has hired 35,000 seasonal employees.
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UPS, the world’s largest package delivery company, has estimated it will deliver more than 700 million packages during the holiday season.
There is an estimated 10% increase in non-store sales this year. In 2015, about 151 million shoppers were in stores and online over the Thanksgiving and Black Friday weekend. Of those shoppers, about 41 million people said they shopped online on Thanksgiving Day, too.
That means even more shipping of products bought online. FedEx’s average daily volume of packages is expected to double to more than 25 million daily during the holiday season. The company normally ships about 12 million daily.
“Online and mobile commerce is simultaneously creating new opportunities and challenges for the retail industry, yet a constant remains: The holiday season is the most important time of the year for retailers,” Gutmann said. “We are committed to helping make this year’s peak season a success for our shippers in all industries.”
Because of the dramatic rise in package volume, companies are reminding customers to look up Postal Service, UPS and FedEx delivery deadlines. For standard parcel post shipments, packages should be sent by Dec. 15, and first-class mail should be send by Dec. 20.
