The Christmas present rush was just too much to handle for the UPS (United Parcel Service) this year, according to Bloomberg. The company failed to deliver a slew of packages by Christmas, affecting Amazon.com Inc., the largest online retailer. As an apology for the holiday disappointment, Amazon offered unhappy customers $20 gift cards and refunds on shipping. Amazon said they fulfilled their holiday shipping requirements and is laying the blame on the UPS.
As the world’s largest delivery company, UPS was simply overwhelmed this year. There were too many air packages and not enough carriers before Christmas. They made no pick-ups or deliveries on Christmas Day, but are now back to their normal shipping schedule. Craig Johnson, president of Customer Growth Partners LLC stated, “You had a perfect storm of events from the consumer side, the retailer side and the shipping side. At the last minute this year, a number of retailers extended their cutoff date to get there by the twenty-fourth. Normally those kinds of schedules are all kind of prepared or coordinated with the carriers.” He also blames the sudden incapacity on the “mediocre” holiday shopping season this year.
UPS possess a fleet of 101,000 famous brown trucks, vans, tractor trailers and even motorcycles in the United States, but this year they were simply caught off-guard by the numerous packages needed to be delivered by the holiday. Its rival, FedEx, maintains one-third less delivery resources than UPS, but they do have more jets on their side. Both companies expected a great number in their holiday shipping with UPS carrying out 125 million shipments and FedEx in charge of only 85 million packages. To make the holiday deadline UPS hired extra part-time workers and borrowed an extra twenty-three planes, but FedEX appeared to deliver ninety-nine percent of its ground packages by the Christmas deadline.
As a result, FedEX shares rose 0.5 percent to $142.65 while UPS shares decreased by 0.1 percent to $104.41. Amazon shares also decreased by 0.2 percent to $398.48. Kohl’s, Toys “R” Us Inc. and Wal-Mart were also affected by the failure of on-time delivery, but have failed to comment on the situation.
Image Credit: Bloomberg